in the time remaining, to help us understand how the man-made system of capitalism will lead to the extinction of our human species, and so many others.
We’ve lived so long under the spell of hierarchy—from god-kings to feudal lords to party bosses—that only recently have we awakened to see not only that “regular” citizens have the capacity for self-governance, but that without their engagement our huge global crises cannot be addressed. The changes needed for human society simply to survive, let alone thrive, are so profound that the only way we will move toward them is if we ourselves, regular citizens, feel meaningful ownership of solutions through direct engagement. Our problems are too big, interrelated, and pervasive to yield to directives from on high.
—Frances Moore Lappé, excerpt from Time for Progressives to Grow Up
Wednesday, September 12, 2012
Incorporating the Rentier Sectors into a Financial Model
Hudson together with another economics professor tries to explain how debts issued by the financial sector is taking over economies. Although I can't follow all of what they are explaining, it appears to me to be essentially the same argument that Hudson has been expressing for several years.
As with past articles Hudson, and now Bezemer, refer to an earlier period in capitalism where the banking sector was very conservative and preferred to invest in already productive, and safer, assets rather than in development projects. Such financial capitalists were roundly criticized by industrial capitalists for this because money was desperately needed to develop resources which were widely becoming available in the New World and increasingly exploitable due to advances in technology. This constant reference to earlier conservative financiers suggests that the solution to the present economic destabilization is, once again, more investment in productive enterprises rather than existing assets; and that this remedy would save the economy. An unstated implication is that it would also save the capitalist system. Apparently, the liberal professors also think that "there is no alternative".
As Mark Twain expressed it, "History doesn't repeat itself, but it does rhyme." They don't bother to explain the two financial practices in their historical circumstances. Yes, the two periods have some parallels, but the circumstances are radically different. We are now facing a number of limits that adversely impact more productive growth: peak energy and resources and climatic destabilization due to fossil fuel based production. Bankers are not stupid. They know this and that is precisely why they are buying up assets...and, due to their key role in the ruling class of the One Percent, they are lowering taxes on capital gains and strengthening their military and police forces. They, as hard core capitalists, are merely pursuing their own interests which under the dogma of capitalism is supposed to benefit society in general.