Scott
Verified User
Just finished reading the article that shares the name of this thread by Michael Hudson, I thought it was very good. It can be seen here:
www.geopoliticaleconomy.report
For those who'd like to know a bit more about the author before reading what he has to say, here's what's at the end of his article:
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Michael Hudson is president of the Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street financial analyst, and distinguished research professor of economics at the University of Missouri, Kansas City. He is the author of many books, including "Super Imperialism," "...And Forgive Them Their Debts," and "Killing the Host." You can follow his work at Michael-Hudson.com.
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Below I quote the introduction to the article, which focuses on the problem. Further in the article, there is a lot on how to resolve said problem...
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Industrial capitalism was revolutionary in its fight to free Europe’s economies and parliaments from the hereditary privileges and vested interests that survived from feudalism. To make their manufactures competitive in world markets, industrialists needed to end the land rent paid to Europe’s landed aristocracies, the economic rents extracted by trade monopolies, and interest paid to bankers who played no role in financing industry. These rentier incomes add to the economy’s price structure, raising the living wage and other business expenses, thus eating into profits.
The 20th century saw the classical aim of clearing away these economic rents rolled back in Europe, the United States, and other Western countries.
However, today, land and natural-resource rents in private hands are still rising and even receiving special tax advantages. Basic infrastructure and other natural monopolies are being privatized by the financial sector — which is largely responsible for carving up and de-industrializing economies on behalf of its real estate and monopoly customers, who pay out most of their rental income as interest to bankers and bondholders.
What has survived from the policies by which Europe’s industrial powers and the United States built up their own manufacturing is free trade. Britain implemented free trade after a 30-year fight on behalf of its industry against the landed aristocracy, aimed at ending the protectionist agricultural tariffs, the Corn Laws, which had been enacted in 1815 to prevent opening the home market to low-priced food imports, which would have reduced farming rents.
After repealing these laws in 1846 to lower the cost of living, Britain offered free-trade agreements to countries seeking access to its market in exchange for these countries not protecting their industry against British exports. The aim was to deter less industrialized countries from working up their own raw materials.
In such countries, Europe’s foreign investors sought to buy rent-yielding natural resources headed by mineral and land rights, and basic infrastructure headed by railroads and canals. This created a diametric contrast between rent-avoidance in the industrial nations and rent-seeking in their colonies and other host countries, while European bankers used debt leverage to gain fiscal control of former colonies who had won independence in the 19th and 20th centuries.
Under pressure to pay the foreign debts that were run up to finance their trade deficits, development attempts, and deepening debt dependency, debtor countries were obliged to relinquish fiscal control of their economies to bondholders, banks, and creditor-nation governments, which pressed them to privatize their basic infrastructure monopolies. The effect was to prevent them from using revenue from their natural endowments to develop a broad economic base for prosperous development.
Just as Britain, France, and Germany aimed to free their economies from feudalism’s legacy of the vested interests with rent extraction privileges, most of today’s Global Majority countries need to free themselves from the rent and debt overhead inherited from European colonialism and creditor control.
By the 1950s these countries were being called “less developed” or, even more patronizingly, “developing.” But the combination of foreign debt and free trade has blocked them from developing along the balanced public/private lines that Western Europe and the United States followed.
The tax policy and other legislation of these countries has been shaped by U.S. and European pressure to observe international trade and investment rules that perpetuate geopolitical domination by Western bankers and rent-extracting investors to control their national patrimony.
The euphemism “host economy” is appropriate for these countries, because the Western economic penetration of them resembles a biological parasite feeding off its host.
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Michael Hudson: How the Global Majority can free itself from US financial colonialism
Economist Michael Hudson describes how China created an alternative to the Western neoliberal order, and how the Global South can challenge the rent extraction of US-centered financial colonialism.
www.geopoliticaleconomy.report
For those who'd like to know a bit more about the author before reading what he has to say, here's what's at the end of his article:
**
Michael Hudson is president of the Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street financial analyst, and distinguished research professor of economics at the University of Missouri, Kansas City. He is the author of many books, including "Super Imperialism," "...And Forgive Them Their Debts," and "Killing the Host." You can follow his work at Michael-Hudson.com.
**
Below I quote the introduction to the article, which focuses on the problem. Further in the article, there is a lot on how to resolve said problem...
**
Economist Michael Hudson describes how China created an alternative to the Western neoliberal order, and how the Global South can challenge the rent extraction of US-centered financial colonialism.
Jul 17, 2025Industrial capitalism was revolutionary in its fight to free Europe’s economies and parliaments from the hereditary privileges and vested interests that survived from feudalism. To make their manufactures competitive in world markets, industrialists needed to end the land rent paid to Europe’s landed aristocracies, the economic rents extracted by trade monopolies, and interest paid to bankers who played no role in financing industry. These rentier incomes add to the economy’s price structure, raising the living wage and other business expenses, thus eating into profits.
The 20th century saw the classical aim of clearing away these economic rents rolled back in Europe, the United States, and other Western countries.
However, today, land and natural-resource rents in private hands are still rising and even receiving special tax advantages. Basic infrastructure and other natural monopolies are being privatized by the financial sector — which is largely responsible for carving up and de-industrializing economies on behalf of its real estate and monopoly customers, who pay out most of their rental income as interest to bankers and bondholders.
What has survived from the policies by which Europe’s industrial powers and the United States built up their own manufacturing is free trade. Britain implemented free trade after a 30-year fight on behalf of its industry against the landed aristocracy, aimed at ending the protectionist agricultural tariffs, the Corn Laws, which had been enacted in 1815 to prevent opening the home market to low-priced food imports, which would have reduced farming rents.
After repealing these laws in 1846 to lower the cost of living, Britain offered free-trade agreements to countries seeking access to its market in exchange for these countries not protecting their industry against British exports. The aim was to deter less industrialized countries from working up their own raw materials.
In such countries, Europe’s foreign investors sought to buy rent-yielding natural resources headed by mineral and land rights, and basic infrastructure headed by railroads and canals. This created a diametric contrast between rent-avoidance in the industrial nations and rent-seeking in their colonies and other host countries, while European bankers used debt leverage to gain fiscal control of former colonies who had won independence in the 19th and 20th centuries.
Under pressure to pay the foreign debts that were run up to finance their trade deficits, development attempts, and deepening debt dependency, debtor countries were obliged to relinquish fiscal control of their economies to bondholders, banks, and creditor-nation governments, which pressed them to privatize their basic infrastructure monopolies. The effect was to prevent them from using revenue from their natural endowments to develop a broad economic base for prosperous development.
Just as Britain, France, and Germany aimed to free their economies from feudalism’s legacy of the vested interests with rent extraction privileges, most of today’s Global Majority countries need to free themselves from the rent and debt overhead inherited from European colonialism and creditor control.
By the 1950s these countries were being called “less developed” or, even more patronizingly, “developing.” But the combination of foreign debt and free trade has blocked them from developing along the balanced public/private lines that Western Europe and the United States followed.
The tax policy and other legislation of these countries has been shaped by U.S. and European pressure to observe international trade and investment rules that perpetuate geopolitical domination by Western bankers and rent-extracting investors to control their national patrimony.
The euphemism “host economy” is appropriate for these countries, because the Western economic penetration of them resembles a biological parasite feeding off its host.
**
