by ERIC DRAITSER
ERIC DRAITSER: Hello and welcome to CounterPunch Radio. My name is Eric Draitser, thanks so much for tuning in, and coming back to the show. First-time listeners finding the show, welcome aboard. Thank you so much, we really appreciate your support. If you want to support CounterPunch, the best way to do that is to get a subscription to CounterPunch Plus, that way you get access to all of our exclusive content. Remember folks, this is basically the print magazine, now online. We have discontinued the print magazine and taken even more content, but it behind a little paywall just like everybody else is doing these days and it’s there for you. CounterPunch is unlike any other space on the left online. You have competing ideas, competing perspectives, all of which are welcome on Counterpunch, and providing that platform is something we have been doing for nearly 30 years. If you appreciate that, get that CP+ subscription and also, consider getting some books from Counterpunch, including from the wonderful author that I have with me today, whose brand-new book is available from CounterPunch we are going to talk about it. He is the incomparable Michael Hudson. He is back with us. I just realized in talking with him before we started recording that it has been like seven years since he was on this show, so long overdue appearance. Michael Hudson is the president of the Institute for the Study of Long-Term Economic Trends. He is an economist and an author. You probably all already know him, but the book probably most famously Super Imperialism: The Economic Strategy of American Empire, that is a classic, one that has shaped a lot of our thinking. And of course, the most recent book, published by CounterPunch, Destiny of Civilization: Finance Capitalism, Industrial Capitalism, or Socialism. Available from Counterpunch. Michael Hudson, welcome back.
MICHAEL HUDSON: Well, it’s good to be here, Eric.
DRAITSER: Thank you so much for giving me some time, and for this really important book, because it provides the kind of long-term perspective that I think we really need to understand everything that has happened economically in, I guess, the modern period. So, let’s begin by talking about that. The book began as a series of lectures around recent lectures around US globalization, the role of China and its development, but it kind of expanded from there talking about finance capitalism versus industrial capitalism. I guess we could start there and have you explain this juxtaposition. What are the differences? How do we understand these two ideas?
HUDSON: Well, most textbooks talk about industrial capitalism as if the function of banks is to make loans to factories to build plants and equipment and hire more labor to produce goods and keep the economy going, and that’s what everybody expected banks to do in the late 19th century. They expected banks to stop just lending to governments and being predatory and somehow become part of the industrial economy. And that was happening in Germany until World War One, but after World War Two you had the rentiers fight back. You had banks merge with real estate. The fight of classical economics and of industrial capitalism was to get rid of the landlord class, to get rid of everything that increased the cost of living to workers, so that they could pay workers less, not to lower workers living standards, because they know that if you’re going to hire labor, and you want high productivity labor, it has to be well-fed, well- educated, well-dressed, and have good housing. But the industrial class certainly in America and in Germany wanted government to pick up as many of these costs as possible. They wanted government to pay for education and that’s what you had in the United States. In England they wanted government to pay for health care, and it was a conservative Prime Minister Benjamin Disraeli that said “…health is everything, that’s what we really have to do”. So you had public health, you had public pensions in Germany under Bismarck to help build up the industrial working class. And the objective was to make every industrial economy into a low-cost economy by getting rid of the rentiers, getting rid of the landlords. You don’t need a class just collecting income without contributing to production. You don’t need a banking class, you don’t need monopolists.
Well, everybody thought in the late 19th century that industrial capitalism was evolving naturally into socialism, and there were many different kinds of socialism: there was Christian socialism, anarchist socialism, Marxian socialism, Co-op socialism, but one form or another, everybody thought that the government was going to pick up natural monopolies and basic needs. All of that changed after World War One and really changed after 1980 with Margaret Thatcher and Ronald Reagan. And by that time the financial class had merged with the real estate class and as land landlords were phased out, because of taxes and the whole political shift: democracy, you had private owner-occupied housing. But if you’re an individual how are you going to get a house? You have to go to a bank. So, while industrial capitalism had gotten rid of the landlord class, capitalism still had economic rent, but instead of being paid to the landlord class, it is now paid to the banks in the form of interest.
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