“FINANCE IS NOT THE ECONOMY”

 

 

 

 

 

 

 

 

World Economic Review (Volume 1 Number 1, 2012) the journal of the World Economics Association has a brilliant paper by Michael Hudson and Dirk Bezemer which is a “must read” for those wanting to understand the deep flaw in the distributional system.

The paper Incorporating the Rentier Sector into a Financial Model calls the FIRE sector (finance, insurance and real estate) to account for fattening itself on the teat of society’s surplus whilst labour and capital have been made to starve.

As neo-classical economists wring their hands in complicity and ignorance, Hudson and Bezemer’s account surgically exposes why world economies are plummeting into another economic depression: “finance is not the economy”.