Michael Hudson (economist)

Hudson was born on March 14, 1939.[3] According to his self-published autobiography, he was born in Minneapolis to parents who had both worked with Leon Trotsky in Mexico. When Hudson was three years old, his father was arrested on Smith Act violation grounds.[4]

Hudson received his primary and secondary education in a private school at the University of Chicago Laboratory Schools. After his graduation, he entered the University of Chicago with two majors: Germanic philology and history. In 1959, Hudson graduated from the University of Chicago with a bachelor's degree. After graduation, he worked as an assistant in a publishing house.

In 1961, Hudson enrolled in the Economics Department of New York University. His master's thesis was devoted to the development philosophy of the World Bank and special attention was paid to credit policy in the agricultural sector.

In 1964, Hudson, who had just received his master's degree in economics, joined Chase Manhattan Bank's economics research department as a balance of payments specialist. His task was to identify the payment capacity of Argentina, Brazil, and Chile. Based on export earnings and other international payment data, Hudson had to determine the income the bank could derive from the debt that these countries had accumulated. He recalled that, "I soon found that the Latin American countries I analyzed were fully 'loaned up'. There were no more hard currency inflows available to extract as interest on new loans or bond issues. In fact, there was capital flight." Among other tasks that Hudson performed at Chase Manhattan was an analysis of the balance of payments of the US oil industry and the tracking of "dirty" money that ended up in Swiss banks.

Hudson left his job at the bank to complete his doctoral dissertation. His thesis was devoted to US economic and technological thought in the 19th century. It was successfully defended in 1968 and in 1975 it was published under the title Economics and Technology in 19th Century American Thought: The Neglected American Economists.

In 1968, Hudson joined the accounting firm Arthur Andersen, for whom he expanded his analysis of payment flows for all areas of US production. He discovered that the United States deficit was evident only in the military sphere. However, the accounting system used in the US after the war mixed the balance of individuals and state payments flow into a single balance which concealed the budget deficit. Hudson proposed dividing US balance of payments figures into governmental and private sectors.

In 1968, Hudson published a 100-page brochure titled A financial payments-flow analysis of U.S. international transactions, 1960–1968 in which he pointed out the flaws in the accounting system and the need to distinguish between state deficits and private payments. After the appearance of the brochure, Hudson was invited to speak to the graduate economics faculty of The New School in 1969. Hudson was offered a job teaching international trade and finance immediately after his lecture. According to Hudson, he was surprised to find that the university program virtually ignored the issues of debt, financial flows, money laundering and the like. The emphasis that Hudson placed on these subjects in his lectures aroused criticism from Economics Department chairman Robert Heilbroner, who noted that his faculty did not focus on these issues.

In 1972, Hudson published his first major book, Super Imperialism. In it, he showed how Nixon's abandonment of the gold standard created a situation wherein United States Department of the Treasury bonds became the sole basis for global reserves. It left foreign governments with no choice but to finance the US budget deficit and hence its military expenditures. After publication of the book, Hudson left the institute and moved to the Hudson Institute headed by Herman Kahn. In 1979, he became an advisor to the United Nations Institute for Training and Research (UNITAR). He wrote reports for the Canadian Ministry of Defense and also acted as a consultant to the Canadian government. His second big book, titled Global Fracture: The New International Economic Order was published in 1977. In it, Hudson argued that the military superiority of the United States led to the division of the world along financial lines.

After a meeting in Mexico, he left his job at UNITAR and began to study the historical roots of debt. In 1984, Hudson joined Harvard's archaeology faculty at the Peabody Museum as a research fellow in Babylonian economics. A decade later, he was a founding member of ISCANEE (International Scholars Conference on Ancient Near Eastern Economies), an international group of Assyriologists and archaeologists who analyzed the economic origins of civilization. This group has become the successor to Karl Polanyi's anthropological and historical group of a half-century ago.

In the mid-1990s, Hudson became a professor of economics at the University of Missouri–Kansas City and a fellow at the Levy Economics Institute at Bard College. As of 2020, Hudson is the director of the Institute for the Study of Long-Term economic Trends (ISLET) and the Distinguished Research Professor of Economics at the University of Missouri–Kansas City.[5] He contributes a weekly "Hudson Report" to the Left Out podcast.[1]

Hudson devoted his first works to the problem of the gold and foreign exchange reserves and the US foreign economic debt, a subject his mentor Terence McCarthy had previously dealt with in detail. In his first article titled "Sieve of Gold", Hudson analyzed the negative economic consequences of the Vietnam War.

In A Financial Payments-Flow Analysis of U.S. International Transactions, 1960–1968, Hudson showed US export statistics erroneously included a class of goods whose transfer abroad did not involve payment at any time, from residents of one nation to those of another; and, which are for this reason not really international transactions at all. In his monograph, Hudson made an attempt to divide the United States balance of payments into government and private sectors.

In 1972, Hudson published Super Imperialism, which traced the history of the formation of American imperialism after the end of World War I. In Hudson's interpretation, super-imperialism is a stage of imperialism in which the state does not realize the interests of any group other than itself. It is itself wholly and entirely aimed at colonializing other states, making them into client states by dollar diplomacy. Continuing the position outlined in A Financial Payments-Flow Analysis of U.S. International Transactions, 1960–1968, Hudson stressed the aid systems, World Bank and IMF formed after the end of World War II.

At the end of the 1980s, Hudson diverged from the field of modern economics to explore the foundations of modern western financial practices and concepts in ancient Mesopotamia. Under the aegis of the Institute for the Study of Long-Term economic Trends, which he organized, Hudson convened a series of five conferences between 1994 and 2004 gathering leading scholars in the pertinent disciplines to investigate this topic, assemble relevant contemporary scholarship and publish it in a series of volumes. The five conferences focused on Privatization in the Ancient Near East and Classical World; Urbanization and Land Ownership; Debt and Economic Renewal in the Ancient Near East; Creating Economic Order: Record-Keeping, Standardization, and the Development of Accounting; and Labor In The Ancient World. In their investigation of the origins of debt and usury they found the first and by far the earliest major creditors were the temples and palaces of Bronze Age Mesopotamia, not private individuals acting on their own. The rate of interest in each region was not based on productivity. It was set purely for simplicity of calculation in the local system of fractional arithmetic, i.e., 1/60th per month in Mesopotamia and later 1/10th per year for Greece and 1/12th for Rome. Money originated in book-keeping, not metals or barter or coinage. Ideas about land ownership, mortgages, rents, and wages originated in this context and were determined by it.

From the beginning of 2000s, Hudson has paid special attention to the issues of inflating fictitious capital.

Hudson stresses world success of neoliberal Dollar Diplomacy and financialization is closely connected with its educational support in all big universities.

Hudson identifies himself as a Marxist economist, but his interpretation of Karl Marx is different from most other Marxists. Whilst other Marxists emphasize the contradiction of wage labor and capital as the core issue of today's capitalist world, Hudson rejects this idea. He believes the core issue of today's failing economies is parasitic forms of finance changing "free market" from its original 1800s definition as "free from non-productive rents;" and, re-defining "free market" to mean the lowering of all regulation and taxation to permit asset stripping both domestically and foreign.

Hudson sides with those who understand Marx as wishing to eliminate all forms of feudalistic rent seeking. If encouraged, these can only lead to a new feudalism and economic serfdom for the 99%. The original meaning of a free market as discussed by classical political economists was a market free from all forms of rent. The gist of classical political economy was to distinguish earned-productive from unearned-non-productive economic activity.

Michael Hudson is heavily influenced by Henry George and a strong supporter of the Georgist reform of taxing 100% of the rental value of land.[6] In A Philosophy for a Fair Society[7] he claims that Marxism has failed, welfare capitalism is crippled and suggests Georgist policy as necessary for rebuilding the community.

At the same time, Hudson is a strong critic of the Georgist movement, historically blaming Henry George for not cooperating with socialists and thereby ultimately failing to implement his crucial policy change.[8] He considers the American Georgist movement too libertarian, right-wing and unambitious.[9] He has frequently collaborated with georgists such as Fred Harrison and Kris Feder, and was part of a group that attempted to convince the Russian Duma in 1996 of adopting Georgist policy.[10] He is frequently featured in Georgist media.[11]