Killing The Host

by Micheal Hudson

Michael Hudson has become the indispensible deconstructer of contemporary economics. I almost wrote 'of our contemporary economy', but since that economy it is no longer 'ours', but rather the province of private banks whose chicanery remains beyond most citizen's conceiving, I must alter my words. This is the story Mr. Hudson unfolds in his book. 

The working metaphor of our economy is parasitism. Parasites trick hosts by disabling their defenses, gaining their foothold by convincing the host that no attack in underway. To do this successfully the parasite must ultimately control the host's brain. Similarly---the rentier economy of banks and high finance pretends to be benign and even necessary, even as it swallows more and more of the real economy. Does this sound familiar or frightening? If your answer is no, then it may be that your own brain has already been altered. This point deserves reflection, because some parasites do permanently alter the biology of their hosts. Hudson's analogy may thus have an even greater salience that he might prefer, one which might mean that it is now impossible to recover our former society. 

No one can read this book and reflect on the lessons it offers without being impessed by the authors' scholarship, his careful marshaling of the evidence and his well-reasoned conclusions. This much has come to be expected from Mr. Hudson. Yet there is a great deal more.

In a famous letter written during his retirement Thomas Jefferson put it more or less Mr. Hudson does: " Banking establishments are more dangerous than standing armies; and the principle of spending money to be paid by futurity under the name of funding is but swindling futurity on a large scale. The issuing power should be taken from the banks and restored to the people to whom it properly belongs." 

So it appears that the author's concerns are neither unique nor unusual, rather they represent a historic norm. This is important because the fight Mr. Hudson outlines has been going on for generations. One generation fights one battle, but the next generation often has to fight the same battle over again. This irony goes by the name "American exceptionalism". Naturally is not exceptional, but merely repetitious. The present generation have their own term for the phenomenon. They rightly call it: "dumbing-down."

Not so long ago one used to hear the term "money-kook" to describe those who distrusted banks. That term has fallen out of favor, but the idea that anyone who questions "our" monetary system was for a long time the archetype of the American eccentric. Not after 2008. Those who prefer to 'earn' their 'wealth' by creating a debt rather than a product still have the upper hand, but that hand is weakening. The open discussion of public banking at cost indicates that the old libel of eccentricity has finally lost face.

The following quote is not from Karl Marx but from Adam Smith:

"The labour and time of the poor in civilized countries is sacrificed to the maintenance of the rich in ease and luxury. The landlord is maintained in idleness by the labor of his tenents. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for he use of his money. But every savage has the full enjoyment of the fruits of his labors; there are no landlords, no usurers, no tax-gatherers." 

Alas, this state of affairs, where every savage owns the full fruits of his labors has still not yet arrived! How shall we again obtain it?

It is the old question. The question of democracy. Only a little democracy! And if but if a little, then why not a lot? If only a little, then why not ALL?

Hudson writes: "Banking was on its way to becoming public up to World War I. If this trend had continued much of the world today might have credit-cards, deposit banking services and loans provided at cost or at subsidized rates instead of today's fees and penalties. Public banking would be less likely to extend credit for asset-stripping and the asset-price inflation that characterizes today's financial system. But bankers and financiers have successfully instituted a de-regulatory economic philosophy and have seized control of governments to use its money-creating power to subsidize high-finance, while leaving creditors free to stifle the economy's real growth with debt-deflation." 

Debt deflation is not deflated currency. What is meant by debt deflation is loss of home, loss of job, loss of money, but above all loss of place, loss of good order in the world.

Debt-deflation is Ma and Pa Joad trying to make Californy: desperation, destitution: final and black despair. 

It is Tom Joad disappearing down the railroad-tracks in the wan dawn; and Grandpaw staring, uncomprehending, at the receding road.

It is one's life one is losing, consciously, deliberately, without cause

It is a blank meaninglessness. It is what cannot be cured by laws, by homeless shelters, or even by money. 

But in the end it is not about money, or the lack of money, it is about the thing that remains soulless and hard in some men.

One can call it dignity, or right of place, temporal but permanent, concrete but spiritual, personal but collective: inviolable, nevertheless, even in death

The economists may plead and the politicians argue and the scholars write their books; but it is this right of place that we must finally honor, else all we may do is vain.

Will Morgan

November 24, 2015