Dr. Michael Hudson needs to be torn apart

[Karl Marx AK47]

Hardly a Marxist, Dr. Michael Hudson has been allying himself closer these days with Max Keiser who defends the likes of Alex Jones. While Max Keiser holds dreams about gold they both speak the same language of preserving the capitalist system by eliminating the ills of fictive capital. Max Keiser, like Alex Jones throws in occasional anti-communist propaganda. Michael Hudson appears to try the same at around 28:00 into this interview on KPFA Guns and Butter where he tries to slam everybody, including Monthly Review.

http://kpfa.org/archive/id/61891

[Die Neue Zeit]

Give me a break!

Michael Hudson was a Marxist and is now a classical economist, yet he understands what things like "free markets" and "rent" originally meant much more than many leftists around here do!

And yes, I listened to that last week.

[S.Artesian]

Give me a break!

Michael Hudson was a Marxist and is now a classical economist, yet he understands what things like "free markets" and "rent" originally meant much more than many leftists around here do!

And yes, I listened to that last week.

Hudson was never a Marxist. Never. Not when he was in graduate school, not as a young academic. Never. How do I know this? I know the people who knew him in grad school and as a young academic.

How much of what he claims to understand is superior to what leftists on revleft claim to know is immaterial. His explanations for the past and current condtion of capitalist reproduction are wrong-headed. He seems to me to be constantly auditioning for the part of the chairman of a "shadow" council of economic advisors.

[Die Neue Zeit]

There's such a thing as a political Marxist vs. an "academic Marxist." As for you "knowing" the people who knew him in his youth, please elaborate extensively on your personalized attack.

[S.Artesian]

I have no idea what you're talking about, and obviously, neither do you. Hudson has never presented himself as a Marxist. He may be "left," more left or less left, but he hasn't ever claimed he's a Marxists. As to the people I know who knew him in grad school/academic days... they are people who knew him in those days and I certainly have no intention of giving you their names.

Besides, I made no attack on Hudson. I could criticise his book Super Imperialism but I haven't done that... yet, much less attack him. His book detaches completely trade, and financial policy of the US government from the relations of capital and labor.

His arguments about the current crisis, where supposedly the "unproductive" "parasitic" US survives by trading worthless pieces of paper for real value produce by China is not only inaccurate, but downright ignorant, given the fact that the US is still largest provider of global industrial output [not exports, output], and that 80% of China's electronic and tech exports are actually the products of foreign direct investment enterprises.

[Die Neue Zeit]

He did admit to it in a previous Internet radio interview. This was where he boasted of having actually read Capital, having quotations of Marx handy to contrast his views from those of the Monthly Review (the latter's financial capitalism being an "inevitable" outcome) and to educate those with that book in handy but never having actually read it.

You can criticize Super Imperialism (which I haven't read) all you want, but I'm more focused on his classical political economy (http://www.revleft.com/vb/classical-economic-rent-t103272/index.html) (regardless of flaws here and here): his insights into the linguistic fight over "free markets," into his application of economic rent as a classical concept into the broadcast spectrum, into debt in Sumerian history, etc.

[S.Artesian]

He did admit to it in a previous Internet radio interview. This was where he boasts of having actually read Capital, having quotations of Marx handy to contrast his views from those of the Monthly Review (the latter's financial capitalism being an "inevitable" outcome) and to educate those with that book in handy but never having actually read it.

You can criticize Super Imperialism all you want, but I'm more focused on his classical political economy: his insights into the linguistic fight over "free markets," into his application of economic rent as a classical concept into the broadcast spectrum, into debt in Sumerian history, etc.


WTF? Perhaps you haven't been paying attention, but reading Capital does not make one a Marxist, despite what various school boards in Texas might think.

Oh, and he uses quotes from Marx? Well then it's surely a done deal. I prefer to base my assessment on what the person has written, and his main work that he has written, for which he is known is Super Imperialism. You think that's a Marxist work? Have you read it?

You're focused on his work on classical political economy? Oh, that's precious-- then it's settled he must be a Marxist if he writes about classical political economy, economic rent in the broadcast spectrum and debt in Sumerian history.

What a superficial bastard I am to think that a Marxist would expose the immanent critique of current capitalism, of current political economy; would analyze the reproduction of capital and the relations of capital and labor.

I believe currently Dr. Hudson is an economic advisor to Kucinich [I think] and other "left" Democrats-- all 3 of them. Probably making plans to introduce legislation to bring back the gold standard. ... I know, I know, the man's got to make a living, and after all didn't Engels' manage a factory? Yeah yeah yeah.... that's just me and my incurable narrow-mindedness.

Let me know when you have something to say about this world, the world we are actually living in.

[Die Neue Zeit]

Marx's Capital was a Critique of Political Economy - that is, a critique of classical political economy, which is quite distinct from something like neoclassical shit.

[S.Artesian]

Marx's Capital was a Critique of Political Economy - that is, a critique of classical political economy, which is quite distinct from something like neoclassical shit.


No shit? Really? Who would have thunk? Classical political economy? He guess what? Marx's work is the critique of capitalism and the explication of its, capitalism's, immanent tendencies for its own negation.

Apparently you missed that part. As does Hudson.

Not to put too fine a point on it.

[Karl Marx AK47]

Give me a break!

Michael Hudson was a Marxist and is now a classical economist, yet he understands what things like "free markets" and "rent" originally meant much more than many leftists around here do!

And yes, I listened to that last week.

He wasn't a Marxist, he was an economic hit man. The very devil himself and he admits to it. An economic Dalai Lama embraced by some on the left, baptized by his revisionism. Like the Kentucky Fried Fool, he's got the original recipe and you're the only soul here marketing a bucket-full because it has revolution written on the side? S.Artesian is on point pay attention. Economics is a language only used by capitalists to keep everything and everyone else outside of the discussion on how best to carve up the world. Marx used their own language against them, to show us the contradictions, not to celebrate it's "revolutionary transformation" like the David Harvey and Allen Woods cheerleaders would also do, or leave it up to capitalists to move us in the direction of socialism (that shit ain't gonna ever happen) with a sanitized and softer version of "rent" or "free-markets". Marx's' ambition was to write a lot more than those three volumes of Capital. Left unfinished, his critique showed us how defective their language really is and motivates us with the inspiration to do something about it to change it. When Marxists speak outside the rigidity of economics this is where the Michael Hudson's brains breakdown and fail to appreciate the true meaning of the left. Marxists are not economists nor can they be divided up into political and academic camps because the bonfires are made by the same hands trying to confuse the issue. Michael Hudson's decision to attack Socialist's, Marxist's and the Monthly Review are his own demise.

[Die Neue Zeit]

No shit? Really? Who would have thunk? Classical political economy? He guess what? Marx's work is the critique of capitalism and the explication of its, capitalism's, immanent tendencies for its own negation.

Apparently you missed that part. As does Hudson.

Not to put too fine a point on it.

You've got the wrong target here. Hudson's revival of classical thinking is an attack on rentier-friendly neoclassical shit. Likewise, the neo-Ricardians and the "post-Keynesians" also focus their economics attacks on that same neo-classical shit.

However, for political reasons I don't agree with Hudson on, say, having higher consumption taxes as part of replacing all income taxation (primarily with taxes on ground rent, broadcast rent, etc. which are useful for replacing all of lower-income taxation, though).


Michael Hudson's decision to attack Socialist's, Marxist's and the Monthly Review are his own demise.

Hudson attacked the non-reading of Capital and the Identity Politics of the New Left. I don't see anything wrong with that assessment.

[S.Artesian]

You've got the wrong target here. Hudson's revival of classical thinking is an attack on rentier-friendly neoclassical shit. Likewise, the neo-Ricardians and the "post-Keynesians" also focus their economics attacks on that same neo-classical shit.

However, for political reasons I don't agree with Hudson on, say, having higher consumption taxes as part of replacing all income taxation (primarily with taxes on ground rent, broadcast rent, etc. which are useful for replacing all of lower-income taxation, though).


The target I have is the guy who thinks he has a chance as Secretary of the Treasury if only Kucinich gets elected president.

He's selling his particular "expertise," just like any other investment advisor/scam artist.

[Die Neue Zeit]

You and I are in agreement that he's got the wrong politics (I could go on a tirade against the "Democratic" "Party" longer than you could, as noted by the two pairs of quotation marks and not one ;) ), but I'm focused on his economic analysis and at least some of his solutions. [By mentioning banks and the broadcast spectrum, he's gone beyond typical Georgism.]

[BAM]

the guy who thinks he has a chance as Secretary of the Treasury if only Kucinich gets elected president.

is that so he can re-implement the gold standard (like he calls for at the end of that book)? I'd like to see that one ... anyway, I hope he isn't holding his breath for little Dennis to be sworn in any time soon ...

[S.Artesian]

is that so he can re-implement the gold standard (like he calls for at the end of that book)? I'd like to see that one ... anyway, I hope he isn't holding his breath for little Dennis to be sworn in any time soon ...

I think so. That, and so he can get a government pension...

[BAM]

I think so. That, and so he can get a government pension...

one of those "gold-plated" public sector pensions ...? :lol:

[S.Artesian]

You and I are in agreement that he's got the wrong politics (I could go on a tirade against the "Democratic" "Party" longer than you could, as noted by the two pairs of quotation marks and not one ;) ), but I'm focused on his economic analysis and at least some of his solutions. [By mentioning banks and the broadcast spectrum, he's gone beyond typical Georgism.]


My only essential point in the discussion is that Hudson never presented himself as a Marxist. He may quote Marx now, especially Marx is so much more in fashion these days. He may take the MR crowd to task. Nothing wrong with that, as long as you take them to task for their misrepresentation, and jettisoning, of Marx.

But Hudson's not even an academic Marxist.

[S.Artesian]

By the way, DNZ, did you listen to the broadcast? Where he claims that Europe is being run by the European Central Bank- arguing it, Europe, is being run that way against the wills of the individual national governments?

What crap. The EU is spinning apart, and the austerity measures being undertaken have pretty much ignored the ECB, and in fact the ECB proved itself incapable of "disciplining" the fiscal policy of any particular government. It was only the threat of the complete collapse of the euro, the inability of the European banks to operate in the commercial paper markets that brought the Germans on the right into agreement on the bailout of Greece-- and even that bypasses the ECB, turning to the IMF for ultimate approval of restructuring plans necessary for any assistance.

His remarks are just so full of shit... he actually claims that the only force arguing for a political union in Europe are the fascists-- when it is the fascists in France, and in Greece, who are the most nationalist, and will whip up anti EU, and IMF sentiment. in order to divert the radical opposition to capitalism.

Hudson goes on to argue that the interests dominating the ECB are "feudal" or "neo-feudal" or "post feudal feudal" interests. What a bunch of crap. It's the same old, same old false distinction between "good" "productive" capital, and "evil" "speculative" "money-lending" capital.

How anybody can listen to his guy for ten minutes without puking is beyond my comprehension.

[Lenina Rosenweg]

Interesting thread. I'm not super knowledgable about Hudson. I have read Super Imperialism and I listened to the Bonnie Faulkner interview with him. I was thinking about starting a MH thread myself. I'm not sure what his politics are-I thought of him as being a "soft Marxist", maybe more of a left Keynsian. He's now an advisor to an opposition party in Latvia.

In the G &B interview Hudson slammed the US left (including his father) for not having read Capital and orienting more towards identity politics. His criticism of the MR crowd may be accurate but not of the rest of the Marxist left.

In an email exchange a few years ago Loren Goldner recommend that I read Super Imperialism, which I did. Hudson seems to be one of the best economic writers on Counterpunch.

Hudson's remarks about Europe returning to feudalism are unMarxist, but there does seem to be a retreat from the Enlightment.

[Die Neue Zeit]

By the way, DNZ, did you listen to the broadcast? Where he claims that Europe is being run by the European Central Bank- arguing it, Europe, is being run that way against the wills of the individual national governments?

What crap. The EU is spinning apart, and the austerity measures being undertaken have pretty much ignored the ECB, and in fact the ECB proved itself incapable of "disciplining" the fiscal policy of any particular government. It was only the threat of the complete collapse of the euro, the inability of the European banks to operate in the commercial paper markets that brought the Germans on the right into agreement on the bailout of Greece-- and even that bypasses the ECB, turning to the IMF for ultimate approval of restructuring plans necessary for any assistance.

Yes I did, and I disagree with him here. An effective ECB would have a monopoly over the entire European financial system. The ECB is in fact an extension of German central banking.


Hudson goes on to argue that the interests dominating the ECB are "feudal" or "neo-feudal" or "post feudal feudal" interests. What a bunch of crap. It's the same old, same old false distinction between "good" "productive" capital, and "evil" "speculative" "money-lending" capital.

That's what you get from classical political economy, though. :confused: The central point is that the "evil" "speculative" "money-lending" capital is more tied to rent than it is to profit, if one recalls Marx's Trinity Formula in Volume III (wages, rent, and profit). There, though, Marx misclassified interest as part of "profit." (http://www.marxists.org/archive/marx/works/1894-c3/ch48.htm) [And these days, commercial real estate companies make "profits," too. :glare: ]

[S.Artesian]

Yes I did, and I disagree with him here. An effective ECB would have a monopoly over the entire European financial system. The ECB is in fact an extension of German central banking.



That's what you get from classical political economy, though. :confused: The central point is that the "evil" "speculative" "money-lending" capital is more tied to rent than it is to profit, if one recalls Marx's Trinity Formula in Volume III (wages, rent, and profit). There, though, Marx misclassified interest as part of "profit." (http://www.marxists.org/archive/marx/works/1894-c3/ch48.htm) [And these days, commercial real estate companies make "profits," too. :glare: ]

That's what you get from a mis-understanding of Marx's analysis; and rent is the weakest part of his analysis. Actually, IMO, the only weak part of Marx's analysis.

[S.Artesian]

Interesting thread. I'm not super knowledgable about Hudson. I have read Super Imperialism and I listened to the Bonnie Faulkner interview with him. I was thinking about starting a MH thread myself. I'm not sure what his politics are-I thought of him as being a "soft Marxist", maybe more of a left Keynsian. He's now an advisor to an opposition party in Latvia.

In the G &B interview Hudson slammed the US left (including his father) for not having read Capital and orienting more towards identity politics. His criticism of the MR crowd may be accurate but not of the rest of the Marxist left.

In an email exchange a few years ago Loren Goldner recommend that I read Super Imperialism, which I did. Hudson seems to be one of the best economic writers on Counterpunch.

Hudson's remarks about Europe returning to feudalism are unMarxist, but there does seem to be a retreat from the Enlightment.

Yeah, as close friends as Loren and I are, we argue about Hudson, whom I can't stand, and whom he thinks is "OK" for a 'non-Marxist.' I'm still trying to figure out what that means. I mean there are certainly US [and other]economists who are "OK" even though they're not Marxists, for the historical data and concepts they provide [Henry George, D.A. Wells for his work on the "long deflation" 1873-1898], but Hudson has a political agenda and his analysis misses truly key issues.

[BAM]

That's what you get from classical political economy, though. :confused: The central point is that the "evil" "speculative" "money-lending" capital is more tied to rent than it is to profit, if one recalls Marx's Trinity Formula in Volume III (wages, rent, and profit). There, though, Marx misclassified interest as part of "profit." (http://www.marxists.org/archive/marx/works/1894-c3/ch48.htm) [And these days, commercial real estate companies make "profits," too. :glare: ]

The trinity formula is vulgar economy's tripartite distinction. Earlier on in Vol III, interest is treated separately from profit. A new distinction is made between profit and profit of enterprise, which is profits minus interest payments. Thus interest is a division of surplus value between industrial and financial capitalists. It is the "reward" to financial capitalists for the greater efficiency of capital provided by the credit system, which turns hoards of accumulated capital into productive capital, and thus leads to the increased mass of surplus value generated in production.

As for commercial real estate, the profits there will come from the stream of revenue provided by rents, which will come out of the profits of businesses which occupy those properties.

[Die Neue Zeit]

That's what you get from a mis-understanding of Marx's analysis; and rent is the weakest part of his analysis. Actually, IMO, the only weak part of Marx's analysis.

How exactly am I misunderstanding his weakness here?

If I charge 7% for a loan, I haven't done anything managerial for my debtor (even electing part of the board), I haven't invested any capital equipment proper, and I'm supposed to get my regular payments rain or shine (long positions a.k.a. typical owners and capital gains speculators don't get regular dividend payments).

The debtor's landlords (most likely commercial real estate cos.) haven't done anything managerial for their debtor, haven't invested any capital equipment proper, and are supposed to get regular payments rain or shine.

In other words, interest is clearly, clearly more akin to rent than it is to "profit."


The trinity formula is vulgar economy's tripartite distinction.

That's why I don't agree with the trinity formula at all, even if it's supposed to be tied to the "factors of production" in mainstream economics - land, labour, and capital. In other texts, Marx sort of equates the broader concept of rent with surplus value pocketed by the various elites.

There are five income streams: wages due to wage labour, charges from self-employed labour, classical rent (including ground rent and finance charges), profits plowed into dividends, and gains made from speculation ("fictitious capital" and all).


A new distinction is made between profit and profit of enterprise, which is profits minus interest payments.

Here's some educative trivia for you: a more contemporary and more accurate measure these days is called EBITDA (earnings before interest, taxes, depreciation, and amortization).

[S.Artesian]

How exactly am I misunderstanding his weakness here?

If I charge 7% for a loan, I haven't done anything managerial for my debtor (even electing part of the board), I haven't invested any capital equipment proper, and I'm supposed to get my regular payments rain or shine (long positions a.k.a. typical owners and capital gains speculators don't get regular dividend payments).

The debtor's landlords (most likely commercial real estate cos.) haven't done anything managerial for their debtor, haven't invested any capital equipment proper, and are supposed to get regular payments rain or shine.

In other words, interest is clearly, clearly more akin to rent than it is to "profit."



Rent is the equalization of profit rates, of profitability, by another name.

The misunderstanding comes in drawing the "political" conclusion from this equalization process, from this rationing of the socially realized surplus, that somehow there is a "split" a substantive conflict between "finance" "speculative" capital and industrial capital, with the various adjectives of bad vs good, unproductive vs productive-- a misconception you reproduce in your little exposition.

Rent, interest, etc. are mechanisms of capital as a whole, of the totality of accumulation and reproduction. Arguing as Hudson does that there is an "evil" "unproductive" "rentier" class "strangling" the wholesome, productive, industrial capitalists is not the "socialism of fools," but rather the capitalism of fools as it assumes that capitalism engages in production of something other than, and for reasons other than value.

[BAM]

That's why I don't agree with the trinity formula at all, even if it's supposed to be tied to the "factors of production" in mainstream economics - land, labour, and capital. In other texts, Marx sort of equates the broader concept of rent with surplus value pocketed by the various elites.

Well, I don't think it's a question of simply disagreeing with it, but rather how an investigation of its untruth reveals the truth. According to the fetishistic conception of vulgar economy, capital and land are themselves productive of profit, interest and rent. But what Marx reveals is that both profit (including profit of enterprise, and merchant's and commercial profits), interest and rent are all divisions of surplus value. In other words, they are all claims on the unpaid labour of the working class.

Interest is the claim on surplus value from financial capitalists as their reward for increasing the efficiency of capital. Merchants and retailers get their share of surplus value from purchasing goods from industrial capitalists below their prices of production and selling them on at an increased price. This again makes it more efficient for the manufacturer who, although he gets a lower rate of profit, he is able to transfer the risk of sale and increase his turnover and thus the mass of profit.

Rent is again a portion of the unpaid labour which goes to the landlord through the use of his land. If the capitalist owned his own land all profits would accrue to him and he would not see a difference between the profit and rent components. Of course, Marx is writing about agricultural land, but one can to apply it to mines, commercial properties, etc. The thing to remember is that ground-rent is a subsidiary of surplus value and is thus limited by the total social mass of unpaid labour.


There are five income streams: wages due to wage labour, charges from self-employed labour, classical rent (including ground rent and finance charges), profits plowed into dividends, and gains made from speculation ("fictitious capital" and all).

I am not sure where you have got that from. In any case, you might as well stick to wages-profits-rent. It's simpler. You have confused different categorisations above. Finance and rent should not be put together, for example.


Here's some educative trivia for you: a more contemporary and more accurate measure these days is called EBITDA (earnings before interest, taxes, depreciation, and amortization).

Ha, I didn't know whether to mention that or not. I used to work for finance magazines so am used to all that jargon, but I also know that some people reading this might be unfamiliar.

Actually, taxation is also a share of surplus value, this time accruing to the state. I don't know of much that deals with it.

[BAM]

I missed this:
How exactly am I misunderstanding his weakness here?

If I charge 7% for a loan, I haven't done anything managerial for my debtor (even electing part of the board), I haven't invested any capital equipment proper, and I'm supposed to get my regular payments rain or shine (long positions a.k.a. typical owners and capital gains speculators don't get regular dividend payments).

The debtor's landlords (most likely commercial real estate cos.) haven't done anything managerial for their debtor, haven't invested any capital equipment proper, and are supposed to get regular payments rain or shine.

In other words, interest is clearly, clearly more akin to rent than it is to "profit."

No, there are important reasons not to lump (or why Marx did not lump) rent and interest together. Capitalists and landowners are two different classes. The Trinity Formula not only expresses vulgar economy's conception of the factor of production, it is also expressive of the three great classes: capitalists, landowners and workers.

It is no coincidence that Marx brings in his analysis of class after the Trinity Formula. I posted this extract from one of his letters yesterday that is worth repeating:


At last we have arrived at the forms of manifestation which serve as the starting point in the vulgar conception: rent, coming from the land; profit (interest), from capital; wages, from labour. But from our standpoint things now look different. The apparent movement is explained. Furthermore, A. Smith’s nonsense, which has become the main pillar of all political economy hitherto, the contention that the price of the commodity consists of those three revenues, i.e. only of variable capital (wages) and surplus value (rent, profit (interest)), is overthrown. The entire movement in this apparent form. Finally, since those 3 items (wages, rent, profit (interest)) constitute the sources of income of the 3 classes of landowners, capitalists and wage labourers, we have the class struggle, as the conclusion in which the movement and disintegration of the whole shit resolves itself.

Emphasis added

In your conception, we would have industrial capitalists - financial capitalists/landowners - workers. In other words, industrial and financial capitalists would form a separate class from each other, which is exactly the reactionary attitude S.Artesian rightly criticises (and accuses Michael Hudson of).

Not only that, but financial and industrial are actually related in a deep way. Think of GM or GE, massive industrialists and financiers.* Also the rate of profit and the rate of interest are related in a very important way: the rate of interest can never, for very long at least, exceed the rate of profit. Otherwise, industrial capitalists would simply become financial capitalists and undermine the source of production of new value.

And of course, it is completely wrong, as I have written, to say that financial capital contributes nothing. The credit system leads to the concentration and greater efficiency of capital and thus benefits accumulation.

*ETA: In recent years, it was common for industrial capitalists not to re-invest profits back into production, but to invest on the stock markets in the (collectively self-defeating) hopes of a greater return in an environment of a generally declining rate of profit.

[S.Artesian]

I missed this:

No, there are important reasons not to lump (or why Marx did not lump) rent and interest together. Capitalists and landowners are two different classes. The Trinity Formula not only expresses vulgar economy's conception of the factor of production, it is also expressive of the three great classes: capitalists, landowners and workers.

It is no coincidence that Marx brings in his analysis of class after the Trinity Formula. I posted this extract from one of his letters yesterday that is worth repeating:



In your conception, we would have industrial capitalists - financial capitalists/landowners - workers. In other words, industrial and financial capitalists would form a separate class from each other, which is exactly the reactionary attitude S.Artesian rightly criticises (and accuses Michael Hudson of).

Not only that, but financial and industrial are actually related in a deep way. Think of GM or GE, massive industrialists and financiers.* Also the rate of profit and the rate of interest are related in a very important way: the rate of interest can never, for very long at least, exceed the rate of profit. Otherwise, industrial capitalists would simply become financial capitalists and undermine the source of production of new value.

And of course, it is completely wrong, as I have written, to say that financial capital contributes nothing. The credit system leads to the concentration and greater efficiency of capital and thus benefits accumulation.

*ETA: In recent years, it was common for industrial capitalists not to re-invest profits back into production, but to invest on the stock markets in the (collectively self-defeating) hopes of a greater return in an environment of a generally declining rate of profit.


Couldn't have said it better myself.

One addition-- regarding the dedication of profits and cash flow to stock buybacks as collectively self-defeating. There's another aspect to this.

These stock buybacks are the way our well known and unloved bourgeoisie reward themselves. Our bourgeoisie, financial/industrial, are an asset-stripping, asset liquidating bourgeoisie. The buybacks, option awards, private equity LBO's measure the conflict, the contradiction between private property, and social production where production has so undermined the profitability of private property, of capital, that the bourgeoisie find in personal, individual property the index to class power. Fear and greed, comrades, those are the alpha and the omega of bourgeoisie.

This too stands as evidence in opposition to Hudson's, and others, specious distinction between "unproductive" and "productive" capitalists, and his absurd conflation of finance capital with a "rentier" class. I guess some think Hudson's tipping his hat to Lenin in this, but Lenin had it wrong too.

[BAM]

These stock buybacks are the way our well known and unloved bourgeoisie reward themselves. Our bourgeoisie, financial/industrial, are an asset-stripping, asset liquidating bourgeoisie. The buybacks, option awards, private equity LBO's measure the conflict, the contradiction between private property, and social production where production has so undermined the profitability of private property, of capital, that the bourgeoisie find in personal, individual property the index to class power. Fear and greed, comrades, those are the alpha and the omega of bourgeoisie.

Indeed. With the rise of private equity (TPG, Carlyle, KKR ...) we can see the two arms of the capitalist class - financial and industrial - in clear cahoots with each other. The Barbarians are at the gates ...

[S.Artesian]

Indeed. With the rise of private equity (TPG, Carlyle, KKR ...) we can see the two arms of the capitalist class - financial and industrial - in clear cahoots with each other. The Barbarians are at the gates ...


The Barbarians are the gate-keepers...

[Die Neue Zeit]

Rent is the equalization of profit rates, of profitability, by another name.

The misunderstanding comes in drawing the "political" conclusion from this equalization process, from this rationing of the socially realized surplus, that somehow there is a "split" a substantive conflict between "finance" "speculative" capital and industrial capital, with the various adjectives of bad vs good, unproductive vs productive-- a misconception you reproduce in your little exposition.

I think you're a bit off here. Rent is clearly not the equalization of profit rates, since commercial landlords charge different rent rates, and since petit landlords with non-principal residences for income-making don't derive profits at all.


Rent, interest, etc. are mechanisms of capital as a whole, of the totality of accumulation and reproduction. Arguing as Hudson does that there is an "evil" "unproductive" "rentier" class "strangling" the wholesome, productive, industrial capitalists is not the "socialism of fools," but rather the capitalism of fools as it assumes that capitalism engages in production of something other than, and for reasons other than value.

I'm not saying there's an "evil" capital and a "good" capital. Otherwise, I'd be extolling the moral "virtues" of the small business owner (yeah, who pays workers lower wages than bigger companies :rolleyes: ).


But what Marx reveals is that both profit (including profit of enterprise, and merchant's and commercial profits), interest and rent are all divisions of surplus value. In other words, they are all claims on the unpaid labour of the working class.

Surplus value is a bigger concept than you think, and has AT LEAST these forms:

1) Capital replacement
2) Capital expansion
3) "Social wage" (including to retirees, to the disabled, etc.)
4) Wasted goods due to overproduction
5) Classical rent, dividends from industrial profits, speculative gains, etc.

[Also to consider is the surplus appropriated by unproductive labour, ranging from self-employed labour in the style of Joe the Plumber to most of the military-industrial complex. Here's "Labour Aristocracy" for you.]


Interest is the claim on surplus value from financial capitalists as their reward for increasing the efficiency of capital.

No it isn't. It is the claim on surplus value from financial capitalists period. No "reward for increasing the efficiency of capital" is present, otherwise we wouldn't have consumer credit or loan sharks, not to mention bank fees.


I am not sure where you have got that from. In any case, you might as well stick to wages-profits-rent. It's simpler. You have confused different categorisations above. Finance and rent should not be put together, for example.

What Hudson has argued is precisely that finance and ground rent be put together under a broader rent category. Again, think about it when considering consumer credit, loan sharks, and bank fees.


Ha, I didn't know whether to mention that or not. I used to work for finance magazines so am used to all that jargon, but I also know that some people reading this might be unfamiliar.

Maybe we can discuss your finance knowledge in private. ;)


Capitalists and landowners are two different classes.

Not in the modern world. The capitalist function can be bourgeois or petit-bourgeois. The landowning function can also be bourgeois or petit-bourgeois. My five income streams do not necessarily correlate to class, and this is intentional. One of the reasons for this is the productive/unproductive labour divide, which does define class. Another reason is that the newest addition to the bourgeoisie proper are fund managers working for corporations that provide financial asset management, despite the fact that most of their income is "wage labour."


In your conception, we would have industrial capitalists - financial capitalists/landowners - workers. In other words, industrial and financial capitalists would form a separate class from each other, which is exactly the reactionary attitude S.Artesian rightly criticises (and accuses Michael Hudson of).

My conception of class is this:

http://www.revleft.com/vb/simplification-class-relationsi-t73419/index.html?p=1100321

[S.Artesian]

We need to stay a bit on topic here:

1. Hudson is not now, nor as he ever presented himself as a Marxist.

2. His "master work," Super Imperialism, is not a Marxist analysis. Doesn't mean it doesn't have valuable historical information, but Hudson aims at more than "good history." He has a political agenda, which is why he is Kucinich's economic advisor.

3. Hudson makes a vulgar conflation of finance capital and "neo-feudalism," arguing that the "rentier" interests as institutionalized the ECB are actually some sort of neo-landowners, manipulating the economy of Europe against the wishes of the individual nations, and contrary to the interests of governments, and "productive."

4. If DNZ disagrees with 1-3, let's see the evidence where Hudson says "I'm a Marxist;" show us the Marxism in Super Imperialism; show us how the ECB is actually operating against the interests of the bourgeoisie-- not against the interests of social production, but against the interests of bourgeois private property, of the bourgeoisie's class rule.

As for capitalists and landowners-- yes, landowners in this modern world can operate as capitalists, as can any form of appropriation-- Marx makes that point in vol 2 of Capital. The hacendados of Mexico, Ecuador, Bolivia, Venezuela, acted as capitalists in their relations to the world market; however in their relations to the expanded reproduction of capital, to accumulation of capital they did not act as capitalists. Kind of why Latin America is characterized as "underdeveloped," no? And because they do operate, in one regard as capitalists, rent operates in a similar manner to equalize profit rates.

In landowning, and in rent, we are not talking about landlords of residences; we are talking about commercial landowning, with production entering the circuits of capital through the world market.

[Die Neue Zeit]

He explicitly said that he grew up in a Trotskyist family.

[S.Artesian]

He explicitly said that he grew up in a Trotskyist family.

WTF? You're kidding me, right? He grew up in a Trotskyist family? That's your evidence? I didn't ask if his parents or siblings were Marxist. I asked for evidence that he is-- currently--a Marxist, or ever "presented" himself as Marxist.

Next you're going to tell me that he's actually read a book or two by Marx.

[BAM]

DNZ:

You are, in a lot of what you write, simply changing old definitions for new ones (and not very good ones at that, unfortunately) and treating this as if you are presenting a new argument.


Surplus value is a bigger concept than you think, and has AT LEAST these forms:

1) Capital replacement
2) Capital expansion
3) "Social wage" (including to retirees, to the disabled, etc.)
4) Wasted goods due to overproduction
5) Classical rent, dividends from industrial profits, speculative gains, etc.

This is a confused mess. 1) & 2) are just profits re-invested. 3) is that portion of surplus value appropriated by the state and redistributed (that is worth investigating further as there is very little on the in Marx's analysis). 4) is not a source of surplus value, simply becuase commodities left unsold do not realise surplus value at all. 5) is a further mish-mash. Profits are one portion of surplus value. Gains from speculation simply are transfers of money between market participants. Rent exists in a category of its own, for reaosns I will elaborate on again below.


[Also to consider is the surplus appropriated by unproductive labour, ranging from self-employed labour in the style of Joe the Plumber to most of the military-industrial complex. Here's "Labour Aristocracy" for you.]

Labour produces surplus value. It does not appropriate it. Someone who is self-employed, in so far as s/he is selling a service or good on the market acts as his/her own capitalist, except that it does not seem that way in a day-to-day sense.

Military accumulation is an accumulation of use-values, usually by the state. In so far as production of weapons is production for profit it would be productive of surplus value (though granted the purchase of these items would generally involve the appropriation of surplus value by the state). But I fail to see what it has to do with anything.


No it isn't. It is the claim on surplus value from financial capitalists period. No "reward for increasing the efficiency of capital" is present, otherwise we wouldn't have consumer credit or loan sharks, not to mention bank fees.

Now you bring in consumer credit and loan sharks to bolster your argument. But again that fails because, in this context, the interest would be a claim not on surplus value (which is appropriated by the capitalist) but on the wage of the worker. Unless you think, that is, that the worker has appropriated surplus value in the wage, but this is by definition impossible.


What Hudson has argued is precisely that finance and ground rent be put together under a broader rent category. Again, think about it when considering consumer credit, loan sharks, and bank fees.

Again, no. Rent is charged because a portion or force of nature has been monopolised. Last time I checked capital was not a feature or force of nature.


[Differential ground rent] invariably arises from the difference between the individual production price of a particular capital having command over the monopolised natural force, on the one hand, and the general production price of the total capital invested in the sphere of production concerned, on the other.

Emphasis added.


This surplus-profit would also exist if landed property did not exist; for instance, if the land on which the waterfall [ie, a more productive natural feature - BAM] is situated were used by the manufacturer as unclaimed land. Hence landed property does not create the portion of value which is transformed into surplus-profit, but merely enables the landowner ... to coax this surplus-profit out of the pocket of the manufacturer and into his own. It is not the cause of the creation of such surplus-profit, but is the cause of its transformation into the form of ground-rent, and therefore of the appropriation of this portion of the profit, or commodity-price, by the owner of the land ...

http://www.marxists.org/archive/marx/works/1894-c3/ch38.htm


Maybe we can discuss your finance knowledge in private. ;)

Yeah, feel free.


Not in the modern world. The capitalist function can be bourgeois or petit-bourgeois. The landowning function can also be bourgeois or petit-bourgeois. My five income streams do not necessarily correlate to class, and this is intentional. One of the reasons for this is the productive/unproductive labour divide, which does define class. Another reason is that the newest addition to the bourgeoisie proper are fund managers working for corporations that provide financial asset management, despite the fact that most of their income is "wage labour."

Again, you have just changed around definitions, but the ones we already had were actually already pretty good. Capitalists buy labour power, raw materials and means of production to make commodities for sale on the market. These can be big or small capitalists. Landowners own land. Actually, as far as Britain goes (I am not sure about other countries in this context) the landowning class is still a distinct class. Over 70% of the land is owned by less than 1% of the population. Most of the population lives on just 8% of the land. This class of landowners finds its substantial income from the land. For the capitalist farmer who owns his own land, as I wrote yesterday, the rent he would receive as a landowner just appears as one big undifferentiated profit. Simple.

Your five income streams made no sense. Interest and rent do not belong together. Rent arises from the monopolisation of a natural force. It contributes no capital to increase the mass of profit, but is simply a way for the owner of the land, whose greater natural productivity enables the capitalist to generate a surplus profit, to pocket some of that surplus value.

Productive/unproductive labour does not define class. A worker who does not produce surplus value is still a worker. Marx's point is not about the individual worker, but how the entire class of capitalists exploits the entire class of workers.

[Die Neue Zeit]

4) is not a source of surplus value, simply becuase commodities left unsold do not realise surplus value at all

OK, so maybe here I confused surplus value with surplus labour. However, externalized costs because of overproduction - aren't they indeed surplus value?


Labour produces surplus value. It does not appropriate it. Someone who is self-employed, in so far as s/he is selling a service or good on the market acts as his/her own capitalist, except that it does not seem that way in a day-to-day sense.

The point made in Marx's work is that not all labour produces surplus value. That's why he made this distinction.


Now you bring in consumer credit and loan sharks to bolster your argument. But again that fails because, in this context, the interest would be a claim not on surplus value (which is appropriated by the capitalist) but on the wage of the worker. Unless you think, that is, that the worker has appropriated surplus value in the wage, but this is by definition impossible.

I think you've got a bit of an error here yourself.

According to the trinity formula, interest is one form on surplus value. Yet in the real world, interest comes from surplus value and from the wage of the worker, this despite accounting standards on segment reporting (in this case, revenues from retail banking and commercial banking, plus revenues from investment banking).


Again, no. Rent is charged because a portion or force of nature has been monopolised. Last time I checked capital was not a feature or force of nature.

Neither is a trust (extended monopoly).


Emphasis added.

As I said in the Economics thread on rent, Marx's theory of rent is weaker than theories of rent based directly classical political economy (not neoclassical economics, of course). The same goes for rent in the neo-Ricardian and post-Keynesian schools.

[S.Artesian]

I think you're a bit off here. Rent is clearly not the equalization of profit rates, since commercial landlords charge different rent rates, and since petit landlords with non-principal residences for income-making don't derive profits at all.

Really? a critical point Marx makes in his discussion of rent is how in fact the surplus profit of the low-cost agricultural producer is transferred to the landowner through ground rent, thus allowing the high-cost producer to "set the market" and maintain a profitability equivalent to the low-cost producer.

Says Marx "The price of production of the worse soil is always the one regulating the market price."

First, let's establish what rent is: For Marx "that form in which property in land is realized economically-- that is produces value..." Rent may include interest on capital invested in land, but rent is not interest and should not be confused with interest.

The basis for this rent is, for Marx, a "monopoly."

Landed property is based on the monopoly by certain persons over definite portions of the of globe as exclusive spheres of their private will to the exclusion of others.

Now, no such monopoly exists in the reproduction of capital, in the extension or expansion of finance capital. Interest is clearly distinct from rent.

It is convenient, and oh-so-attractive, to identify the self-rewarding of the bourgeoisie with the conspicuous consumption of feudal barons, hacendados, plantation lords. And it is equally attractive to identify and denounce the restrictions, the "limitations" on "unfettered" industrial growth that finance capital supposedly imposes with its demands for interest, short-term returns, asset liquidation etc.

But this, again, is the "free capitalism of fools." The conspicuous consumption and self-rewarding of the finance capitalists, like interest, and credit, and "off-balance" vehicles, are simply mechanisms and representations of distribution of, in the present case, declining profits.

The "restriction" of "unfettered" industrial growth is not the result of finance, or interest, but of the conflict between the accumulation of capital and the profitability of that accumulation.

Hudson never once discusses profitability of production, if I remember correctly, in his Super-Imperialism.

[Rowan Berkeley]

I thought you might like to know that I have posted a brief attempt at a refutation of Hudson on my blog, but as a newcomer to your forum I cannot insert a live link. The item is at niqnaq.wordpress.com/2011/06/04/hudson-and-his-professorial-friends-demonstrate-their-usual-ignorance-regarding-leftism/#comment-21150. Add the http and the :// to make a link out of it. Right at the beginning of the item, I have given links to two posts where I attempt to expound the theory of the falling rate of profit as I understand it, to contrast with Hudson's systematic misdirections, which I then attempt to expose.