[Peace-discuss] Michael Hudson on heterodox economists

[David Green]

Michael Hudson: “Heterodox” is a recent term coined mainly by the University of Missouri at Kansas City where I’m a professor along with Randall Wray and Stephanie Kelton and other members of the Modern Monetary Theory (MMT) school of thought. The term simply means not mainstream. We’re basically classical economists. We do what classical economics used to do, which is to distinguish between earned and unearned income. and between productive versus unproductive labor. And we see that banks create credit – which governments could create just as easily, along more socially and economically productive lines. We see budget deficits as providing the economy with money to fuel growth. That’s why Stephanie calls us “Deficit Owls” instead of the Republican and Clintonite Deficit Hawks who prefer commercial banks to provide the credit that the economy needs.We look at how the economy, goods and services and labor, exists within the context of wealth and assets and debt. And this is how people looked at the economy before there was anti-classical reaction in the 1890’s. We look at how land ownership, banks and credit shape the framework within which the economy operates – at interest.So we’re classical economists. Hyman Minsky was the main modern monetary theorist. Heterodox meant that he got his ideas largely from Marx. You can say classical political economy reached its logical conclusion with Marx. Capital was the last great work of classical economics, and showed where its logic was leading. Marx showed that capitalism itself was revolutionary. Capitalism was a continually self-transforming system. And so we’re looking at how the economy changes, not how it might settle at equilibrium without political change. It evolves, in what Marx called the laws of motion. So we’re putting the political back into what used to be political economy – before the “political” was stripped out a century ago and it moved toward today’s more tunnel-visioned “economics.”
How Bankers Became the Top Exploiters of the Economy
  
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How Bankers Became the Top Exploiters of the Economy
 The trick is to get other people in debt. How do you do that? You make them think that they can gain. They’re wi...  |   |

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