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  • hi uh i'm nikan david's wife um and this is  an event in corner in the owner of the first  

  • anniversary of david graber's passing and in the  spirit of his rejection of academic arrogance  

  • and our urgent need to get out of the  crisis we are in we set up the art project  

  • fight club welcome to the first one of the series  today we're talking about what is that the next  

  • one will be about the nature of money david was  probably the most famous anthropologist of our  

  • times and the best-selling offer even still he had  a food in his computer called nightmare in which  

  • he dumped all bills bureaucratic papers invoices  and papers of his academic achievements he regards  

  • the idea of isolated individual as a myth  what interested david much more was a dialogue  

  • he believed that it is only in dialogue in the  class of opinions where answers are formed and how  

  • human consciousness is born we humans according to  david are the product of our social relationship  

  • that's why it was so important for him  to be involved in a situation in which  

  • people think and act collectively and david  grabber foundation will follow the same path  

  • so we have several projects lined up from  collective education of his archive to publishing  

  • the anthology of the fight club starting from the  first debate between david greber and peter thiel  

  • as fight club official cheerleader i urge our  fighters to be emotional provocative and bold  

  • because the questions that we'll discuss concern  us all if enough of us will change the way we  

  • think about what deb mean then the social design  of our society will change i'll change along with  

  • this so this is just that as david described  what a revolution is a change of common sense  

  • and the collective imagination and david argued  that the main achievement of the paris commune  

  • despite a defeat had been the transformation  of the common sense about how we live together  

  • so most of what we consider ordinary in our  cities public transportation street lights  

  • public schools the eight hours work days and even  the not yet achieved equal pay for women and men  

  • originated in the paris commune and it  was then considered to be a social madness  

  • so the same can be said said about occupy those  10 anniversary we celebrate it now just as we  

  • celebrate david's life occupy didn't take over any  territory he didn't have leaders and government  

  • but it did change the public discourse it's become  important to talk about equality poverty and that  

  • so after after occupy we'll look at the world  differently speaking on death the position of  

  • our fighters today are radically different  we want to i want to express my immense  

  • gratitude to thomas piketty who replied to  my email although we didn't know each other  

  • and agreed to participate in this debate i also  want to thank michael hudson who came up with them  

  • many of the ideas that david graber built upon  in his book 5000 years of death and i really hope  

  • that this debate can radically change the way we  think about the world and what else could be more  

  • exciting so i passed to liam who uh thank  you for agree to moderate his discussion  

  • well it's my great pleasure and it's wonderful  to welcome everyone from all over the world uh we  

  • share some commonalities in our human experience  and one of them is that we tend to come into the  

  • world most of us sort of under-capitalized for the  experience so in a sense most of us are united in  

  • debt and that's why it's especially exciting to  have two such brilliant thinkers help us unpack  

  • this difficult subject from the suitcase where we  like to push it way into the back of the closet  

  • today i'm very delighted to welcome my friend  michael hudson he is a distinguished professor  

  • of economics at the university of missouri kansas  city he's also a researcher at the levy institute  

  • at bard he's a former wall street analyst and  a frequent commenter on economic matters and  

  • historical matters he's written extensively about  debt and as you just heard from nika his work was  

  • a great inspiration for david graber he can  also tell you more about the ancient sumerians  

  • than you ever dreamed of knowing so hopefully  we get to hear a little bit about that today  

  • uh welcome professor hudson and welcome also to  tomati he is the um professor at the e-h-e-s-s  

  • and the paris school of economics and he's also  the co-director of the world inequality lab  

  • uh you know him for going viral with his books  telling us why most of us don't have any money  

  • of course there was his smash hit capitalism in  the 21st century and more recently which you must  

  • get if you haven't read it capitalism and ideology  uh welcome to you professor pikati and we'll start  

  • out having each of you tell us uh your thoughts  about debt your position on the topic and you'll  

  • have about five minutes each and uh i think we'll  start with you professor hudson i thought we're  

  • going to let tom go first otherwise it's going  to be fine all the things i agree with that he  

  • wrote and let him say what nobody wrote that's  fine with me thomas would you like to go first  

  • uh yeah whatever is it's fine i mean so okay  let me say a few words first let me you know  

  • thank you for organizing this and and you know  i was very you know when i received nika's email  

  • you know i felt you know where you know  i felt very emotional because you know i  

  • remember very well the discussion we had with  david grubber back in 2013 in paris which was  

  • right after my book capital in the 21st century  was first published in french it was not yet  

  • available in english so david has not read it but  i had read this book and on that um the first ten  

  • thousand years and and um and and this was you  know this was for me this was really a very um  

  • you know powerful reading and this made me think  a lot maybe this was not so visible in capital  

  • in the 21st century because i had written it  actually before i i could read david's book but  

  • but you know to me this was this was really  a major and this is a major contribution  

  • so what about that let me simply say that you know  there will be in the future there will be again  

  • other debt constellation massive debt consolation  so you know there are long cycles about that which  

  • which of course david uh talks about when we go  back to ancient history or to sumerian times and  

  • as michael has has been has been working on and  so you have this long-run cycle but you also have  

  • you know a short more short-run history of of that  consolation a more medium-run history if you want  

  • and i think it's very important to to remember in  particular that you know after uh you know there  

  • are two modern episodes which i find particularly  striking in terms of getting that back to zero  

  • or at least you know concerning a big part of  that the french revolution of course is a very  

  • important example so you know this was a time  when the basically the political system did not  

  • manage to make pay those who should have paid  for the public spending which was the nobility  

  • so there was a fight flight toward that because  people who should have paid the tax managed on  

  • how to escape and the solution was the french  revolutions and the fiscal privileges of the  

  • aristocracy the conservation of that through  partisan inflation partly through taxation  

  • and that's sort of one modern episode the other  modern episode which i want to to refer to is of  

  • course uh after world war ii uh you know after  you know in 1945 1950 most rich economies had  

  • public debt which were enormous you know even even  bigger than than today and they made the choices  

  • you know the political choice through you know  very conflictual social movement political fights  

  • in the end the choice was made collectively not  to replace his debt so this happens in various  

  • ways you know inflation in some cases but  but some countries like germany in particular  

  • which is viewed today as as very conservative in  terms of economic doctrine and ideology and which  

  • in many ways is very conservative we'll  see after the election in a few days but  

  • you know it's still going to be quite conservative  probably in any case but in fact after world war  

  • ii developed applied the solution to to  get rid of the debt of the past through  

  • a monetary reform and through progressive taxation  of very high wealth holders in order to in effect  

  • compensate the lower wealth holders for the uh for  the monetary reform and the the loss of links that  

  • was implied by military reform so that in the  end i mean this is not job this was certainly  

  • not a perfect system but as compared to all other  ways of getting rid of past that you know this was  

  • certainly one of the one of the most equitable  or at least or the least unequitable way to  

  • to address the problem and you know i think we  will have we will have other episodes like this  

  • in the future so nobody knows the form it will  take you know the kind of political mobilization  

  • you know occupier was was was an important episode  there will be other you know there are other you  

  • know social movement tax revolt you know if you  think of the yellow vest movement in france a  

  • couple of years ago which was a major tax level  to get rid of a very what i think was a very uh  

  • an equal project to raise the carbon tax basically  on the poorest group in society and and there will  

  • be you know to address uh climate uh challenges  but also you know all sorts of social and  

  • developmental uh challenges uh we will we you know  societies will have to to to to find ways of of  

  • getting rid of their debt right now we have this  illusion that you know we can just take it on the  

  • central bank offer and and forget about it but you  know i think it will be more conflictual and more  

  • less peaceful than this because it's  always a matter in the end of redefining  

  • a power relation between different social groups  so it cannot be completely peaceful it involves a  

  • conflicting social interest it involves different  groups of people with different agenda and you  

  • know in many ways we have we are in a situation  which is not i think completely different from  

  • the one at the time of the french revolution which  is at the you know those who those who should pay  

  • have somehow managed to design a legal system  and a political system so that they can escape  

  • taxation and and at the same time middle class and  lower class people are you know fed up of paying  

  • the bill for them and so and so the solution is  more and more debt but you know at some point  

  • there will have to be something else will have to  happen and i think it will be roughly the same it  

  • will have to be roughly the same solution as it  was you know 200 years ago which is the end of  

  • fiscal privileges of a small group in the  population that has that has managed to  

  • escape taxation for for for too long so  that's okay that's a sort of initial uh  

  • initial perspective and and that but you know  of course i'm very interested to hear michael  

  • and continue the discussion thank you michael  it's uh floor is yours okay well i certainly  

  • appreciated uh the the book that you published  on the uh accumulation of uh wealth and how it's  

  • concentrated in the hands of the uh one percent  i think everybody knew intuitively that this was  

  • the case but uh economists being who they are  they don't really accept something until it's  

  • all there in statistics and uh you you did uh  just a wonderful job in tying together uh all of  

  • these statistics and uh showing how the degree to  which wealth is uh the one percent of concentrated  

  • wealth in every country and you also made i think  the most important point where you said what's  

  • caused this and you came up with the broad answer  that i agree with you said that financial returns  

  • exceed the overall rate of growth and if financial  returns exceed the overall rate of growth of  

  • course you're going to have the rich getting uh  richer uh and richer uh and i think the reason  

  • uh where we uh uh have a different approach is how  do you explain all of this well uh when your book  

  • came out a number of writers said well this is uh  uh the marks of the uh uh 20th century and uh uh  

  • you showed that there was an abrupt turning point  uh in 1980 and uh everything had been changed  

  • there and i think the one percent looked at your  statistics as a success story they said yep we're  

  • really uh doing better than everybody else and as  uh the head of goldman sachs said that's because  

  • we're so uh productive uh but i think the reason  your book was praised so much uh in the west is  

  • you didn't come up with a threatening political  solution uh and uh when they said this was the  

  • mark book is the marks for modern time that meant  don't read marx read this book and i suspect that  

  • after you put all of this enormous good work  into the uh statistics that you did on wealth  

  • and income i think the publisher probably said  well what are what are your solutions well you  

  • just came up with uh the solution that you uh said  in the book and that's to tax income and wealth  

  • uh this is not a threatening solution because  there's no way that you're going to tax wealth  

  • as long as you have offshore banking centers to  conceal wealth as long as you have what the oil  

  • industry put in place a hundred years ago the  flags of convenience pretending to make their  

  • uh income abroad the fact is uh the one percent  don't really make much income they're ideal if  

  • you're a billionaire you want to do what uh half  of american corporations do you don't make a penny  

  • of taxable income uh that that's uh the whole  problem so i want to go into what uh your  

  • book was not about uh i'm not criticizing  you for not writing a different book but  

  • it's what i write about and that is why what  is it that has created this uh uh disparity  

  • and why is it widened so much since 1980. well  the most obvious reason is uh interest rates  

  • reached a peak of 20 in uh 1980 and they've gone  down ever since well in the late 1970s uh my old  

  • boss's boss at chase manhattan paul volcker  said let's raise interest rates to very high  

  • because the 99 are getting too much income their  wages are going up let's uh raise interest to slow  

  • the economy and that will prevent wages from going  up and he did and that was a large uh reason why  

  • carter lost the the election to ronald reagan  interest rates then went down from 20 to almost 0  

  • today the result was the largest bond market boom  in history bonds went way up in price the economy  

  • was flooded with bank credit and most of this  credit uh apart from going into the bond market  

  • went into real estate and there is a uh symbiosis  between finance and real estate and also between  

  • finance and raw materials and also like oil and  gas and minerals uh extraction natural resource  

  • rent land rent and also monopoly rent and most of  the monopoly rent has come from the privatization  

  • that you had from ronald reagan margaret thatcher  and the whole neoliberalism uh if you look at how  

  • did this one percent get most of its wealth well  if you look at the forbes list of the billionaires  

  • in almost every country they got wealth in  the old-fashioned way from taking it from  

  • the public domain in other words privatization  you have the largest privatization and transfer  

  • of wealth from the public sector to uh the private  sector and specifically to the financial sector uh  

  • in in history uh sell-offs and all of a sudden  instead of uh infrastructure uh public health uh  

  • other uh basic needs being provided at subsidized  rates to the population you have uh privatized  

  • owners uh financed by the banks raising the rates  to whatever rate they can get without any market  

  • firing power uh in the united states the  government is not even allowed to bargain with  

  • the pharmaceutical companies for the drug prices  so there's been a huge monopolization a huge  

  • privatization a huge flooding of the economy with  credit and one person's credit is somebody else's  

  • uh debt so you you've described the one percent's  wealth in the form of uh savings but uh i focus  

  • on the other side of the balance sheet this one  percent finds its counterpart in the debts of the  

  • 99 so the one percent has got wealthy by indebting  the 99 uh for housing that is soared in price 20  

  • uh just in the last year in the united states uh  for medical care for uh utilities for education  

  • uh the economy is being forced increasingly  into debt and how how can one uh solve this  

  • taxation will not be enough the only way  that you can uh actually reverse this uh  

  • concentration of wealth is to begin wiping out uh  the debt if you leave the debt in place of the 99  

  • uh then uh you're going to leave the one percent  savings all in place uh and these savings are  

  • largely tax exempt uh so basically i think you  you uh left out the government's role in this  

  • wealth creation of the one percent so your  finance has indeed grown faster than economy  

  • absorbed real estate into the finance insurance  and real estate sector the fire sector finances  

  • absorb the oil industry the mining industry  and it's absorbed most of the government so the  

  • financial wealth has spilled over to become  essentially the economy's central planner  

  • it's not planned in washington or paris or london  it's planned in wall street the city of london  

  • and the paris ports the economy is being managed  financially and the object of financial management  

  • isn't really to make money it's capital gains  and again as your statistics point out capital  

  • gains are really what explains the increase  in wealth you don't get rich by saving the  

  • income rent is for paying interest income is for  paying interest you get rich off the government  

  • basically subsidizing an enormous increase in the  value of stocks the value of bonds by the central  

  • banks which have been privatized and uh the reason  that this is occurring is that uh the largest  

  • public utility of all money creation and banking  is left in private hands and private banking  

  • in the west is very different from what government  banking is in say china government banking would  

  • create credit for public uses for what the  economy needs to grow in the united states  

  • and throughout the west banks create credit  to slow the economy from growing they make  

  • loans only not to create new means of production  new factories and uh they create uh they make  

  • loans against property already in place mainly  real estate already in place 80 of bank loans  

  • in america and europe are for real estate uh they  make loans for corporate takeovers uh they make  

  • loans to buy other companies they don't make loans  to build new factories which is what a government  

  • creation money creation in say china china would  do so as long as you leave banking and credit in  

  • private hands you're going to have banks trading  their product debt and the more debt they create  

  • the more debt service that the borrowers the 99  have to pay the banks in order to obtain a house  

  • or an education or medical care or just to break  even and the more money they pay to the financial  

  • sector the less they have to pay for goods and  services so as the economy polarizes between the 1  

  • and the 99 the economy as a whole shrinks because  more and more of its income is spent not on  

  • production uh and consumption it's spent just on  bit service so my solution is you have to restore  

  • banking and credit in to public hands to prevent  the kind of lending that makes asset price  

  • inflation secondly uh you talked about taxing some  taxes are more important than others i don't think  

  • that as long as there are as long as the banks  and the financial sector write the tax codes  

  • as long as the government lawmakers are basically  employees of the financial sector who finances  

  • their political campaigns uh you're not going to  be able to tax them or to close down the fake uh  

  • transfer pricing that corporations use to  pretend not to make money so uh you have to tax  

  • the source of uh the money that pays interest  to the banks itself and that source is mainly