We Are Rome -- Part Deux?

For more than three decades, Michael Hudson has been writing about the financialization of western capitalist economies and indeed of the global economy. His latest is The Bubble and Beyond. The concepts are difficult and complex and so his books and articles are necessarily dense and challenging. But the essence of his argument is that the wealthy western economies no longer grow wealth by making and selling things but by inflating assets at home and stripping assets abroad through financial manipulation.

Though he doesn't put it this way, we have become what economic anthropologists call a tribute economy -- an economy, like ancient Rome's, based on conquest, thuggery and forcible extraction. What he does recognize is that rather than Roman  Legions we now send private financial institutions, non-state actors such as the IMF and inter-governmental aid agencies, such as, in our case, CIDA. It is only when things fuck up that we send the Marines (and JTF2).

As John Perkins described in a much more colloquial way in  Confessions of an Economic Hitman, foreign loans are not a means of assistance but of conquest. But this is true domestically as well. The historic run up in real estate prices has not been captured by the middle class, for the most part, but by the banks who hold mortgages on these inflated assets.

Financial capitalism is a zero sum game wherein the goal is to transfer wealth or tribute from the conquered to the conqueror. It produces nothing and contributes little of its vast booty to the public good. And because it is parasitic, it is ultimately unsustainable. You may get blood out of that stone, but only so much. So whether it is Bain Capital using largely borrowed money to raid vulnerable manufacturers and strip them of pensions and labour costs, all the while charging hefty fees for this service or the IMF or similar institutions bearing dubious gifts wrapped in attached strings, these parasites will eventually bleed their hosts, us, dry.