Although I've valued Hudson's insights about finance capitalism and posted many of his articles, I've always experienced some discomfort when reading his posts. This morning I'd like to begin to explore where that discomfort lies not only with this particular lengthy article, but with his whole perspective. Thus my critique of his ideological position is a bit tentative and not yet fully formed.
It dawned on me this morning that Hudson is really like so many middle-class critics of neoliberalism in which finance plays a major role: they see the obvious dysfunction for societies as a whole of this advanced form of capitalism and want to return to industrial capitalism in which their class played such an important role. The middle-class see their roles in monopoly and neoliberal capitalism as diminishing; and they are not only concerned about their own future, but especially that of their children's future in this advanced stage.
I believe that Hudson's view of capitalism distorts a number of insights contributed by various social critics and ideologists who wrote about capitalism during its several hundred years of existence. This is necessary because he must separate out this current "bad" form of advanced capitalism--finance, monopoly, and neoliberal capitalism--from the "good" stage of industrial capitalism.
For example, his take on Marx's labor theory of value.
...there’s often a misinterpretation of the context in which the labor theory of value was formulated and refined. The reason why Marx and the other classical economists – William Petty, Smith, Mill and the others – talked about the labor theory of value was to isolate that part of price that wasn’t value. Their purpose was to define economic rent as something that was not value. It was extraneous to production, and was a free lunch – the element of price that is charged to consumers and others that has no basis in labor, no basis in real cost, but is purely a monopoly price or return to privilege. ....I think this is a gross misinterpretation of Marx's concept. To me, it's really very simple: anything of value in any economy can only be created by labor through physical and/or mental work. Labor does this by using their brains and/or muscles to transform materials or ideas into products that people want.
The aim of the labor theory of value was to divide the economy between excessive price gouging and labor.
Thus the early English and Dutch capitalist settlers on the American continent realized the vast potential for riches in this undeveloped continent, and saw only "savages" and the need of labor standing in their way of vast wealth accumulation. With their superior weapons they rapidly eliminated opposition by Native Americans who refused to be enslaved, but they still needed huge amounts of labor. Because they could not get enough of this supply from Europe, they used violence to enslave and import Africans to furnish this labor. These early capitalists provided both mental labor and capital (stored labor value) to transform the natural resources of the continent into products. It didn't matter how much wealth (stored labor value) these early capitalists brought over from Europe, they had to have labor to create more value.
Many early capitalist ideologists mixed up these different contributions: capital and mental labor to justify the capitalist "property right" to take as much as he wanted above what was necessary to maintain his labor force whether owned (slaves) or rented (wages, salaried).
Eventually they engaged in "price gouging" through the inevitable increasing concentration of "ownership" of sections of the economy. But that has nothing to do with Marx's labor theory of value. Over time these old entrepreneurial capitalists evolved into pure capitalists by supplying only capital through investments, forming banks, etc, where speculation about obtaining profits became their sole contribution. Now in this neoliberal stage of capitalism we see international industrial corporations and banks diminishing the power of national governments, whether fake democratic or autocratic, and increasing the power of international capitalists.
We are also witnessing the sophisticated development of information technologies and automation which is diminishing the need for the middle class (managers, teachers, highly skilled technicians, other professionals) which is what people like Hudson are concerned about.
