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Absent such a struggle, the jobs crisis in the U.S. and the world over
shall continue forth. The creative and productive potential of billions
worldwide left to languish in the reserve army.
Ben Schreiner is a freelance writer based in Wisconsin. He may be
reached at bnschreiner@gmail.com or via his website.
Economy:
Economists and the One-Percent: Reality Economics
By
Michael Hudson
“Whom the gods would destroy, they first make mad.” And if they
would destroy economies, they first create a wealthy class on top, and let
human nature do the rest. The acquisition of power soon leads to its abuse,
to economic and social hubris. By seeking to protect its gains, perpetuate
itself and make its wealth hereditary, the emergence of a power elite locks
in its position in ways that exclude and injure those below. The wealthy
indebt them, shift the tax burden onto the less powerful, and turn
government into an oligarchy.
It is an ancient tale. The Greeks got matters right in seeing how
power leads to hubris, bringing about its own downfall. Hubris is the
addiction to wealth and power, an arrogant over-reaching that involves
injury to others. By impoverishing economies it destroys the source of
profits, interest, capital gains, and even recovery of the original savings
and debt principal.
This abusive character of wealth and power is not what mainstream
economic models describe. That is why economic theory is broken. The
concept of diminishing marginal utility implies that the rich will become
more satiated as they become wealthier, and hence less addicted to power.
This idea of progressive satiation returns gets the direction of change
wrong, denying the basic thrust of the past ten thousand years of human
technology and civilization.
Today’s supply and demand approach treats the economy as a
“market” in a crudely abstract way, as quantities of goods (already