‘J is for Junk Economics’: Michael Hudson on TRNN (1/5)
Michael Hudson, author of the newly released ‘J is for Junk Economics,’ says the media and academia use well-crafted euphemisms to conceal how the economy really works
SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.
“J is for Junk Economics: A Guide to Reality in the Age of Greed and Deception” by Michael Hudson, that’s the topic of our discussion today. Michael’s joining us in our studio in Baltimore. Thanks for joining us, Michael.
MICHAEL HUDSON: It’s really good to be back down here.
SHARMINI PERIES: Michael Hudson is a distinguished research professor of economics at the University of Missouri, Kansas City. He’s the author of many books including, “Bubble and Beyond” and “Finance, Capitalism and Its Discontents”, “Killing the Host: How Financial Parasites and Debt Destroy the Global Economy,” and most recently, of course, “Junk Economics”.
Michael, so your book reminds me of Raymond Williams’ key words, “It was an incredible contribution to cultural criticism, a criticism of society and cultural studies as a discipline.” And I think it is going to make a phenomenal contribution to the field of economics, your book, and it would be a reference for people to go back, especially students to go back, and look at your version of the definition of these terms and looking at economics from that critical prism. So, my first question to you is really about this book. Why did you write it?
MICHAEL HUDSON: Well, I originally wrote it as an appendix to a book to have been called, “The Fictitious Economy,” and the book was written before the 2008 crisis. And my point was that the way the economy is described in the press and the way that it’s described in University courses has very little to do with how the economy really works. And in a way, the press reports and the journalistic reports of the economy are… use a terminology that is very well crafted euphemisms to conceal how the economy works.
So, instead of giving key words to explain what’s positive and how to understand the economy, which I do do, I also discuss all of the misleading vocabulary, the Orwellian double-think that is used by the media and by the bank lobbyists and the corporate lobbyists to confuse people and make them think that poverty is wealth and to make them act against their own interests by drawing a kind of picture of the economy as if it’s a parallel universe.
And this is parallel universe language they use and if you can make people use a vocabulary and concepts that make it appear as if when the 1% gets richer, the whole economy is getting richer, or when GDP goes up, everybody is improving, then the people, the 95% who did not improve their position from 2008 to 2016 somehow will suffer from the Stockholm syndrome. They’ll think, “Gee, it must be my fault. If the whole economy is growing, why am I so worse off? It must be my fault. If only we can give more money to the top 5% or the 1%, it’ll all trickle down. We’ve got to cut taxes and help them so they can give me a job because as Trump and other people said, ‘Well, I never met a poor person who gave me a job.’”
But the problem is, I’ve met a lot of rich people and instead of giving people jobs when they buy a company, they usually get money to fire people, downsize and outsource. So, the problem is you’re not going to get rich people giving you jobs either. But if people can somehow think in their mind there’s an association with… between wealth at the top and more employment, and you have to somehow cut the taxes on the wealthy, because it’ll all trickle down, then they have an upside down view of how the economy works.
Well, I’d had an appendix to the book and that sort of took on a life of its own. Everyone said look, you’ve got to have this discussion, because if you have a vocabulary that actually describes how the world and the economy works, then people can go, just one word lead to another and you build up a more realistic picture of the economy. So, I not only discuss words and vocabulary, I discuss some of the key individuals and the key economists who’ve made contributions that don’t appear in the academic curriculum at all.
There’s a reason that the history of economic thought is not taught anymore in the universities. If people really read what Adam Smith wrote and John Stewart Mill wrote, they’d see that Adam Smith criticized the landlords. Said, you’ve got to tax away. It’s a free lunch. Mill said rent is what landlords make in their sleep, without working. Adam Smith said, whenever businessmen get together they’re going to conspire as to how to get money from the public at large and how to do a deal and mislead people.
This is not exactly the kind of free enterprise that people who talk about Adam Smith as if he were a tax cutter, an Austrian economist or a Neoliberal want to hear. So, it’s really a book about reality economics and I’ve found to discuss reality economics I’m not going to give them the language or the methodology that they use. That everything is an equilibrium and if you think of the economy as always being an equilibrium somehow you think that if you’re poor, or you can’t pay your debt, or you have problems sending your kids to school, that’s part of nature. And there isn’t an alternative. And that was what Margaret Thatcher said, “There is no alternative.” But this book is all about of course there’s an alternative. But to make an alternative, you need an alternative way of looking at the world. And to do that you, as George Orwell said, you need a different vocabulary.
SHARMINI PERIES: And speaking of vocabulary and of course, euphemistic economic concepts, and that’s what’s so unique about this book, because it’s not just the words, like in Raymond Williams’ but it’s also about the theory and the concepts that we are tackling, and you also talked about businessmen and how they use these terminologies in order to mislead us. So, here we have a businessman in office, as President of the United States, who is proposing all kinds of economic reforms supposedly in our favor, in terms of workers. And you know, the big infrastructure projects that he is proposing that’s supposed to elevate and lift people out of poverty and give them jobs and so on. What is the mythology there?
MICHAEL HUDSON: Well, you just used the word reform and when I grew up for a century before, reform meant you unionize labor. You protect consumers. You regulate the economy so that there’s less fraud in consumers. But reform today is used by the International Monetary Fund in Greece. They’re insisting Greece to reforms. What’s the reform? You lower wages by 10 or 20%. You cut back the pensions by about 50%. You stop paying pensions. You stop social spending. So, what you’ve had is an inversion of the vocabulary. Reform now means the opposite of what it meant early in the century. It’s no longer Social Democratic. It’s right wing, anti-labor, pro-financial reform to basically cutback social spending and leave everything in a privatized way to the wealthy, to the corporate sector.
So, reform is the very first word that I’d use that you have to realize how the meaning has changed as it’s used in the press. Basically, what the right wing has done in this country is take all the vocabulary that was developed by the left wing and by the labor movement and by the socialist economists for a century and they’ve appropriated it and hijacked it and turned it into meaning the opposite. So, there are 400 words that I deal with and many of these words show how the meaning has been turned upside down to get people to have an upside down view of how the economy works.
SHARMINI PERIES: Alright, there’s so much more to unpack here, but we’re going to do this in short segments for social media and other people that are watching our conversations. And this is a series of conversations we’re going to have about your book and the misleading concepts in it. So, Michael, let’s continue in segment two.
MICHAEL HUDSON: Fine.
SHARMINI PERIES: And thank you for joining us here on The Real News Network with Michael Hudson.