Vested interests and economics theory

The views expressed on this web site are almost never voiced by mainstream economists, politicians and journalists, even those who purport to be radical. Were they to do so they would be quickly silenced. One result is that there is no effective challenge to the Neoliberal project, now in full flood in Britain and the US. This lack of effectiveness manifests both as a failure to argue against neoliberalism from a philosophical and theoretical perspective, and a failure to construct alternative policies.

We in the LVT movement have been part of the problem too. It has taken most of us a long time to understand the true role of the contemporary banking system and its relationship to land. Banking has evolved into a machine for the capture of land rent, under the guise of interest payments. The banks are in reality landowners for the duration of the loans they make. This sleight of hand has deceived a lot of us.

Attention is thereby removed from the source of the problem. Thus, the present economic crisis is described as a banking crisis, but what the banks have really been doing is acting as land speculators. Most of the comments and all of the proposals currently in circulation consequently fail to address the underlying state of affairs.

This speech, “Veblen’s Institutionalist Elaboration of Rent Theory”, by Michael Hudson, digs down into the issue and is worth studying. It was given at the Veblen, Capitalism and Possibilities for a Rational Economic Order Conference, Istanbul, Turkey, June 6th, 2012.