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This is an eleven thousand word interview with a Marxist.

sheeeep86 6y ago
This is the best summary of the article. There are very few actual numbers in this, just a lot of generalizations about what happens in the US based on reading the news from afar.
- sudosysgen 6y ago
  Michael Hudson is PhD in Economics and a professor of economics that worked at Chase as a research economist. His conclusions aren't based on "reading the news from afar".
  - missedthecue 6y ago
    Kurt Wise is a PhD in paleontology from Harvard and is a young earth creationist. Having a PhD does not make you correct. And the guy above is right that there's very little data in the article. A lot of musings and general observations.
    - sudosysgen 6y ago
      That's why I didn't just mention his degree, I mentioned that he's currently employed as a professor and that he worked at high level in the private sector in this field. There's not really much more you could ask for. I'm not sure Kurt Wise could find a job as a paleontology professor and as a forensic paleontologist in a very impactful position. There is not that much data, of course. This is an article meant for laymen in economics, and is mostly focused on explaining the reasons why things are as they are. If you want quantitative analysis you can certainly find quite a bit that agrees with him.
Tarsul 6y ago
Doesn't mean it's wrong, though. I found the part enlightening about America not being able to compete with China in manufacturing (if they wanted to) because health care, housing, education is so expensive in the US. Of course everything is more expensive in America than in China, that's crystal clear. However and nonetheless there's a reason why Germany still has a lot of industry and the US has not and the point that the US just puts its money where it generates the most money (not where it necessarily strenghens the local economy) resonates. It's really a shame how little the US politics influenced the economy in the right ways in the last 20-30 years. I'm talking infrastructure, affordable health care, minimum wages, TAXES etc.
sudosysgen 6y ago
Yes, and it's not wrong. In the US, 21% of GDP is from finance, which is materially non-productive, and this sector was growing at 6% pre-pandemic. The use of finance is, at least in theory, it's ability to provide growth to productive sectors. When you're seeing finance being one of the primary drivers of growth by itself, whereas productive sectors don't grow, this indicates that you're lagging behind in your capacity to actually produce value. To note, this isn't just an "interview with a Marxist". Michael Hudson has a PhD in economics and is a professor of economics at the Univeristy of Missouri. He's a classical economist, that happens to use some elements of Marxian economics too.
- DebtDeflation 6y ago
  >The use of finance is, at least in theory, it's ability to provide growth to productive sectors. The main distinction is between the primary market (which provides new funding to companies) and the secondary market (which trades existing securities). You need a certain amount of the latter to support the former by providing liquidity. But anything beyond the required amount starts creating what's known as deadweight losses in economics. Unfortunately, an increasing share of the overall financial sector is the secondary market (mainly proprietary trading operations).
  - sudosysgen 6y ago
    Unless I'm misremenbering, in theory the effects of the primary market should correlate with growth in production, right? I'm dusty so I might misremember.
- dragonwriter 6y ago
  > The use of finance is, at least in theory, it's ability to provide growth to productive sectors. No, like all other capitalist industries, the use of finance is increase the wealth of capital owners. > When you're seeing finance being one of the primary drivers of growth by itself, whereas productive sectors don't grow, this indicates that you're lagging behind in your capacity to actually produce value. No, because of its driving growth, it is producing value (not just for it's owners, which is it's narrow purpose, but for whoever is purchasing the service.) If a nation is seeing finance-driven growth, it's just a sign that that is where it's Ricardian comparative advantage lies in the system of trade. And if you look at international trade regimes, there's a pretty clear finance (and information/knowledge work more generally) - manufacturing - extractive heirarchy ranging from the core to the peripheries. Positive changes in relative position in the world economic order are associated very much with moving to the earlier part of that list.
jeffreyrogers 6y ago
I'm about as far as you can get from a Marxist (I posted the article) and I found it interesting.

This is the best summary of the article. There are very few actual numbers in this, just a lot of generalizations about what happens in the US based on reading the news from afar.

sudosysgen 6y ago
Michael Hudson is PhD in Economics and a professor of economics that worked at Chase as a research economist. His conclusions aren't based on "reading the news from afar".
- missedthecue 6y ago
  Kurt Wise is a PhD in paleontology from Harvard and is a young earth creationist. Having a PhD does not make you correct. And the guy above is right that there's very little data in the article. A lot of musings and general observations.
  - sudosysgen 6y ago
    That's why I didn't just mention his degree, I mentioned that he's currently employed as a professor and that he worked at high level in the private sector in this field. There's not really much more you could ask for. I'm not sure Kurt Wise could find a job as a paleontology professor and as a forensic paleontologist in a very impactful position. There is not that much data, of course. This is an article meant for laymen in economics, and is mostly focused on explaining the reasons why things are as they are. If you want quantitative analysis you can certainly find quite a bit that agrees with him.

Tarsul 6y ago

Doesn't mean it's wrong, though. I found the part enlightening about America not being able to compete with China in manufacturing (if they wanted to) because health care, housing, education is so expensive in the US. Of course everything is more expensive in America than in China, that's crystal clear. However and nonetheless there's a reason why Germany still has a lot of industry and the US has not and the point that the US just puts its money where it generates the most money (not where it necessarily strenghens the local economy) resonates. It's really a shame how little the US politics influenced the economy in the right ways in the last 20-30 years. I'm talking infrastructure, affordable health care, minimum wages, TAXES etc.

sudosysgen 6y ago

Yes, and it's not wrong. In the US, 21% of GDP is from finance, which is materially non-productive, and this sector was growing at 6% pre-pandemic. The use of finance is, at least in theory, it's ability to provide growth to productive sectors. When you're seeing finance being one of the primary drivers of growth by itself, whereas productive sectors don't grow, this indicates that you're lagging behind in your capacity to actually produce value. To note, this isn't just an "interview with a Marxist". Michael Hudson has a PhD in economics and is a professor of economics at the Univeristy of Missouri. He's a classical economist, that happens to use some elements of Marxian economics too.

DebtDeflation 6y ago
>The use of finance is, at least in theory, it's ability to provide growth to productive sectors. The main distinction is between the primary market (which provides new funding to companies) and the secondary market (which trades existing securities). You need a certain amount of the latter to support the former by providing liquidity. But anything beyond the required amount starts creating what's known as deadweight losses in economics. Unfortunately, an increasing share of the overall financial sector is the secondary market (mainly proprietary trading operations).
- sudosysgen 6y ago
  Unless I'm misremenbering, in theory the effects of the primary market should correlate with growth in production, right? I'm dusty so I might misremember.
dragonwriter 6y ago
> The use of finance is, at least in theory, it's ability to provide growth to productive sectors. No, like all other capitalist industries, the use of finance is increase the wealth of capital owners. > When you're seeing finance being one of the primary drivers of growth by itself, whereas productive sectors don't grow, this indicates that you're lagging behind in your capacity to actually produce value. No, because of its driving growth, it is producing value (not just for it's owners, which is it's narrow purpose, but for whoever is purchasing the service.) If a nation is seeing finance-driven growth, it's just a sign that that is where it's Ricardian comparative advantage lies in the system of trade. And if you look at international trade regimes, there's a pretty clear finance (and information/knowledge work more generally) - manufacturing - extractive heirarchy ranging from the core to the peripheries. Positive changes in relative position in the world economic order are associated very much with moving to the earlier part of that list.

jeffreyrogers 6y ago

I'm about as far as you can get from a Marxist (I posted the article) and I found it interesting.