Next we hear from Michael Hudson, also speaking at the MMT summit, who notes the difference between money as created by central banks and bank credit (also called 'money') as created by commercial banks. He characterizes the extreme privatization ongoing since 1971 as one of the most visible aspects of a broader economic parasitism. Owners of capital have, he suggests, numbed the brain of society at large to make it insensitive to the attacks by the rentier class. Unrecognized by too many, there is an ongoing 'financial war' by which the rentier class are seeking to exert complete control over the 99% - something the classical economists warned about.
Hudson highlights the extent to which the FIRE sector has assumed preeminence in the economy, unreported by economics as it is conventionally taught. Economics text books, he says, ignore the centrality of debt and money creation - and the power this gives to commercial banks to effectively loot the productive economy. Economic theory makes much of the prices of consumer goods, which he notes have remained fairly stable in US over the last 30 years, even as real estate, stock and bond prices have skyrocketed - reflecting a huge power shift away from the 99% to the 1%.
In our second hour, we resume reading Chapter 10 from David Graeber's Debt, The First 5000 Years. This week we consider developments in the apex of commerce in the Middle Ages, the Muslim world centered on the Indian Ocean. How was commerce different in the absence of government control? For one thing, he notes that Muslims thought of business as an outgrowth of mutual aid - rather than the more western notion of cutthroat competition.
Thanks to Bonnie Faulkner's Guns and Butter for the MMT conference audio.