Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy

by Michael Hudson

In Killing the Host, economist Michael Hudson exposes how finance, insurance, and real estate (the FIRE sector) have seized control of the global economy at the expense of industrial capitalism and governments. The FIRE sector is responsible for today¹s extreme economic polarization (the 1% vs. the 99%) via favored tax status that inflates real estate prices while deflating the "real" economy of labor and production. Hudson shows in vivid detail how the Great 2008 Bailout saved the banks but not the economy, and plunged the U.S., Irish, Latvian and Greek economies into debt deflation and austerity. Killing the Host describes how the phenomenon of debt deflation imposes punishing austerity on the U.S. and European economies, siphoning wealth and income upward to the financial sector while impoverishing the middle class.

Genres: Economics, Nonfiction, Politics, Finance, History, Social Science, Theory

398 pages, Kindle Edition

First published December 31, 2013

About the author

Michael Hudson is an American economist, Professor of Economics at the University of Missouri–Kansas City and a researcher at the Levy Economics Institute at Bard College, former Wall Street analyst, political consultant, commentator and journalist. He is a contributor to The Hudson Report, a weekly economic and financial news podcast produced by Left Out.

Reviews

[The Conspiracy is Capitalism · Rating 4 out of 5]

It’s a crime not giving badass Hudson 5-stars…

--If you are going to choose *1* Hudson tome to dive into, you’ll be better off with The Bubble and Beyond, which:
1) summarizes “Killing the Host” in a couple chapters
2) summarizes the infamous Super Imperialism: The Origin and Fundamentals of U.S. World Dominance in a couple chapters
3) summarizes debt analysis in:
a) theory/practice (accounting/private debt and State theory/MMT)
b) modern/ancient histories (And Forgive Them Their Debts) which inspired David Graeber’s (RIP) masterpiece Debt: The First 5,000 Years.

--“Killing the Host” is to me Hudson’s most frustrating framework, where he contrasts the “revolutionary productivity” of Industrial Capitalism vs. the “parasitic neofeudalism” of Finance Capitalism. Hudson’s critique of Finance Capitalism is of course legendary, but you can get the best of this with just #3 listed above without #1’s framing (which romanticizes Industrial Capitalism/Classical liberal political economy, i.e. Smith/Ricardo/J.S. Mill, etc.).
…This framing neglects the severe contradictions within Industrial Capitalism, and these contradictions end up re-emerging if you then try to synthesize “Killing the Host” with Hudson’s other analyses:

1) Critiques of imperialism, where Hudson instantly flips a switch and critiques Classical Ricardian “comparative advantage” “free trade” as a convenient, imperialist myth.
-intro: The Divide: A Brief Guide to Global Inequality and its Solutions
-intro: Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
-advanced: Capital and Imperialism: Theory, History, and the Present
-advanced: Hudson's Trade, Development and Foreign Debt

2) Recognition that capitalist state spending is often driven by war spending, thus Hudson can only romanticize state protectionist industrialization (America's Protectionist Takeoff 1815-1914) for so long, until you reach the US Military Industrial Complex, Japanese Miracle reindustrialization from US genocidal war on Korea, South Korea rapid industrialization from US genocidal war on Vietnam, etc: Drums of War, Drums of Development: The Formation of a Pacific Ruling Class and Industrial Transformation in East and Southeast Asia, 1945-1980

3) Relating to (2) is Hudson’s deep analysis of geopolitics, which often outshines in explaining “Neoliberalism” than the abstract idea of a neofeudal rentier backlash to progressive Industrial Capitalism. This geopolitics (i.e. how US's post-WWII global plan of Bretton Woods was predicated on US industrial surplus recycling, how US lost this surplus from its excessive war spending in Korea/Vietnam, and how US flipped to a deficit empire by unleashing Wall Street to vacuum in the world’s surpluses thus unleashing Finance) is more accessibly detailed in Varoufakis’ The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy.
...Add Prashad's The Darker Nations: A People's History of the Third World on the challenge of Third World industrialization to balance Varoufakis/Hudson’s Western-centric accounts.

…finally, Hudson has no answers for:
4) Romanticization of industrial productionism in the age of ecological crises. If we want to be vulgar, we may even suggest that Hudson’s central claim of Finance Capitalism’s “fictitious” growth/value creation might be better for the environment than full-blown Industrial growth. Of course, this only makes a further mess (neglecting different forms of “growth”, debt-driven cancerous growth, etc.). Less is More: How Degrowth Will Save the World
…if we dig deeper, we find that Hudson adopts Classical labour theory of value where “value” is derived from labour and nature is excluded. Now, I’m wary of stirring a Marxologist debate (further complicated with Hudson’s unorthodox interpretations of Marx, esp. Marx’s crisis theory, i.e. rejecting TRPF: Tendency for the Rate of Profit to Fall), but one fundamental framing by David Harvey (A Companion to Marx's Capital) of Marx’s Capital: A Critique of Political Economy, Volume 1 that I find most compelling is that as a critique of Classical political economy, Marx was challenging the market economy (exchange-value dominating use-value) and how it interacts with the labour theory of value. Thus, the end goal for socialism/communism is to transcend the labour theory of value.
…regardless, not seriously incorporating nature (ex. “biophysical economics”/“thermoeconomics”) seems like a major miss in the applicability of economic theory to current real-world issues.

[Public Scott · Rating 5 out of 5]

Hudson really gets it. I respect Michael Hudson more than any other economist (looking at you Krugman) because of his willingness to completely contradict the prevailing orthodoxy.

The book's thesis that the FIRE sector is parasitic is easy to understand and I think well supported by the facts. One fact alone - that almost all growth since the 2008 financial crisis has gone to the One Percent - goes a long way toward proving Hudson's point.

This book probably isn't for a wide general audience - some basic understanding of economics is necessary to get the most out of Hudson's arguments. However, the language is not technical and anyone with an interest in the broad economic global trends is sure to gain from reading this book.

[Noel Aldebol · Rating 5 out of 5]

First a quote from the book to give you a good idea of what is presented --

Fictitious economic models as tactics of deception


"In place of classical political economy, today’s foundation myth is that all income and wealth is earned productively – as if there were no economic rent (unearned income) as a legacy of feudalism’s rentier privileges, and no inherited wealth or insider giveaways. Yet these have been the shaping forces of history. That is why they were the focal point of classical political economy – to free society from such privileges and bias.

A society’s analytic concepts determine the kind of reality it creates. That is why parasites start by taking control of their host’s brain. Neoliberal enzymes aim to sedate the industrial host into believing that the financial sector is part of the real economy, not external to it and extractive.

That is the first myth.
Modern national income and GDP accounting formats treat tollbooth systems and other rent seeking as “output.” Bankers claim to obtain their salaries and bonuses by “creating wealth” (adding to GDP). But they demand to be rescued by taxpayer bailouts (or new central bank money creation) when the bubble that they finance bursts, dispelling the economic fictions they have created. The “service” that bankers claim to provide – managing the economy’s money in ways that increase prosperity – turns out to be a neo-rentier economy based on unearned wealth and income."

____________________________________

You want to know several books worth of economics ? Read this book.
You want to know what is hardly talked about economics ? Read this book.
You want to know economic history which is the base of all economic knowledge ? Read this book.

You want know enough to instantly be able to feel what is fiction what is the truth or near the truth about economics ? Read this book.

You want to corroborate the rumor that what the elites tell you about economics is BS ? Read this book.

You think businesses are charging more because of wages they pay to the workers ?
Do you want to know what motivates businesses more to seek automation to drive costs lower and lower?
What is draining and reducing profits for our businesses ?

Want to know? Read this book.

Want to know so much that you feel like you have improved your value greatly ? Read this book.

Want to know why Michael Hudson is considered by many to be the best economist alive ? Read this book.

[Mark Hartzer · Rating 5 out of 5]

Imagine reading a non fiction book where you have to stop every 3-4 sentences to digest what you've just read and contemplate the concepts. This is not a textbook; but I got a much more intelligent analysis of economics than anything I've previously read from von Hayek to Krugman. It took me much longer than I expected to finish this book because even though I'm very familiar with the topics, he offered insights that I had not expected.

Paul Roberts, the former Assistant Secretary of the Treasury, of the Reagan administration said it better than I...

http://www.nakedcapitalism.com/2016/0...

Sample passages include: "Saddling students and homebuyers with debt has turned their hopes and ambition into a road to insolvency. People can choose which bank to borrow from, which home to buy with a 30 year working life mortgage, and which college to take out an education loan to attend. But whatever their choice, they are subjected to a financialized version of the the Company Store, a deregulated and predatory economy."
or
"Ancient mythology asked how King Midas could survive with nothing to eat but his gold. This threatens to be a metaphor for today's finance capitalism-a dream that one can live purely off money, without means of production and living labor."

2 quibbles:

1.) There is zero mention of reenacting Glass-Steagall. This is a much simpler action than most of the suggestions that Hudson has helping to fix our broken system; and
2.) Easy does it on the fixation on 'classical economics'. While I understand that Hudson is an Economist, and these issues are truly ancient in origin, most people really don't care about classical economics any more than whether Liszt is a classical composer or is post classical. It's just too academic.

But regardless of one's view of classical economics, this is an important book that is well worth taking the time to read and contemplate. I will read it again to dive a little deeper into the background into how rentier interests have been capturing our government and selling us into the debt slavery. A very powerful book.

[CasaJB · Rating 5 out of 5]

Further to my earlier review, add "cosmopolitan" to the list. There was man who fought the banks, fought cosmopolitanism, fought against the 1% for the 99%, fought to free his people from the depravity of debt. No mention of him in here in this otherwise quite informative, thought provoking book.

[Pedro L. Fragoso · Rating 5 out of 5]

Surely, the most important book published this year in any language (and one would hope, the most influential). A masterpiece of intelligent reasoning. One of the books of my life, whose reading most resonated with me.

(There is a leaning towards socialist values that I do not condone, and makes some arguments unnecessarily weaker, but all in all, these are indeed details that can be set aside; however, the socialist rhetoric herein should be the basis for the argument by the politically left in the countries crushed by public debt, as they are intelligently and compellingly presented.)

"The truth is that today’s debt overhead can’t be paid. Today’s political fight concerns just how they won’t be paid. If government debts to foreign creditors are paid by forced privatization selloffs, the former public domain and infrastructure will be turned into rent-extraction tollbooth opportunities and economies will be impoverished by rentier austerity."

"Under these conditions, more credit at lower interest rates has a different effect from what economics textbooks describe. Conventional wisdom throughout the 20th century described low interest rates as spurring new investment and employment by lowering the cost of borrowing, and hence supposedly the cost of new investment. But few bank loans or bonds are for this purpose. Instead, low interest rates provide easier credit for raiders to attack companies, or simply for mergers and acquisitions."

"This has shifted the stock market’s role as an alternative to debt, to buying out stockholders by borrowing."

"Adam Smith long ago remarked that profits often are highest in nations going fastest to ruin. There are many ways to create economic suicide on a national level. The major way throughout history has been by indebting the economy. Debt always expands to reach a point where it cannot be paid by large swaths of the economy. That is the point where austerity is imposed and ownership of wealth polarizes between the One Percent and the 99 Percent.
　Today is not the first time this has occurred in history. But it is the first time that running into debt has occurred deliberately, applauded as if most debtors can get rich by borrowing, not reduced to a condition of debt peonage."

I could easily just quote the whole book, it is that good.

[John Davie · Rating 4 out of 5]

Despite being written in that annoyingly repetitive US style Hudson provides a Copernican analysis of global economics. He retains the Marxist focus on class struggle but rather than emphasising the battle between Labor and Capital he stresses the re-emergence of a neo-fuedal finance aristocracy. This parasitic force is creating a rentier based 'toll booth economy' that sucks wealth from the productive economy of consumption and production, using the proceeds to debt trap the rest of the economy leading to a cycle of debt-deflation. Very interesting.

[Michael Hofschneider · Rating 5 out of 5]

One of the most important books I have read in my life. This book is eye-opening. It answers so many questions people ask about what is going wrong in our economy. It offers a historic perspective about the development of debt and how it threathens the economic well-being of us and future generations. Michael Hudson provides a brilliant and sharp analysis about the financial crisis that started not in 2008 but many years before. He offers measures how states and society can take back control from the financial sector.

[Derek Barnes · Rating 5 out of 5]

Classical economics should be making a comeback and Michael Hudson is leading the charge. A must-read, IMHO, on how predatory finance and debt threatens democracy. If the Big Short piqued your interest, you will love it.

[noblethumos · Rating 5 out of 5]

Michael Hudson’s Killing the Host (2015) is a forceful and heterodox critique of contemporary finance, arguing that modern economies are being systematically undermined by what he terms “financial parasitism.” Written by an economist long associated with institutional and post-Keynesian traditions, the book combines historical analysis, political economy, and polemical narrative to expose how debt, rent extraction, and financialization have come to dominate global economic systems. This review evaluates Hudson’s contributions within an academic context, examining the work’s historical interpretation, conceptual framework, and analytical strengths and weaknesses.


At the center of Killing the Host is the thesis that finance has shifted from a facilitator of productive investment to a rent-seeking sector that extracts value from the real economy. Hudson contends that this transition marks a reversion to pre-industrial economic structures—those characterized by debt peonage, usury, and concentrated creditor power. He argues that modern financial institutions recreate these dynamics through the growth of household debt, austerity policies, speculative bubbles, privatization, and the political influence of creditor interests. This framing situates the book within the broader heterodox critique of neoliberalism and financialization, echoing themes in the work of scholars such as Hyman Minsky, James Galbraith, and Thomas Piketty.


A distinctive strength of Hudson’s work is its long historical scope. He draws extensively on ancient Near Eastern debt practices, Biblical jubilees, and classical political economy to argue that successful civilizations periodically recognized the need for debt relief in order to prevent the concentration of wealth and the collapse of productive capacity. Hudson contrasts these historical precedents with modern neoliberal orthodoxy, which he claims systematically privileges creditors over debtors and treats debt as sacrosanct. This historical analysis, though sometimes unconventional, provides an important counterpoint to mainstream narratives that assume the inevitability and neutrality of modern financial institutions.


Hudson’s methodological approach reflects his background as both an economic historian and policy critic. He employs case studies of the U.S. housing bubble, European sovereign debt crises, IMF structural adjustment programs, and post-Soviet privatization to illustrate how financial interests impose austerity, strip public assets, and erode democratic governance. His argument—namely, that creditor-driven policy choices depress wages, reduce public services, and inhibit long-term growth—is broadly aligned with post-Keynesian and structuralist analyses of financial crises.


Despite these strengths, the book has limitations that academic audiences will note. One challenge is Hudson’s polemical tone. His framing of finance as inherently “parasitic,” while rhetorically powerful, can at times oversimplify the diversity of financial functions and institutions. The parasite–host metaphor provides a vivid conceptual anchor but risks reducing complex political-economic relationships to a binary moral framework. This contrasts with more granular analyses in academic literature that distinguish between productive and unproductive financial activities, examine the role of regulation, or explore institutional evolution.


A second limitation lies in the book’s evidentiary style. Hudson often marshals historical and contemporary examples effectively, yet his critiques are sometimes asserted more than demonstrated. The argument tends toward sweeping generalization, particularly in its depiction of neoliberal policymakers as uniformly aligned with creditor interests or in its portrayal of global financial institutions as monolithic actors. Scholars may also note the absence of formal modeling or quantitative analysis, which limits the book’s engagement with empirical debates about the macroeconomic effects of debt, inequality, and financialization.


Nevertheless, these critiques do not diminish the book’s intellectual significance. Killing the Host contributes meaningfully to ongoing debates about the structural flaws of modern capitalism, the political power of finance, and the social consequences of indebtedness. Hudson’s historical perspective enriches the discourse by challenging the assumption that current financial arrangements are permanent or optimal. His argument that economies periodically require debt write-downs or redistributive reforms to maintain long-term stability provides a provocative and analytically valuable counterpoint to conventional economic thinking.


Killing the Host is a bold and wide-ranging intervention in the study of financial capitalism. While its polemical style and broad generalizations distance it from orthodox academic economics, its conceptual insights and historical depth offer substantial value for scholars exploring the dynamics of financialization, creditor–debtor relations, and political economy. Hudson’s work serves as both a critique of the structural power of finance and a call to reconsider the institutional foundations of modern economies. For researchers engaged with the intersection of economics, history, and public policy, Killing the Host remains a compelling and challenging contribution to contemporary debates.

GPT

[Alexander · Rating 5 out of 5]

Thought this was brilliant and as with the other Hudson work I've read and loved (Superimperialism) it felt like it hit upon an elusive but prescient truth about the ailments of the Anglo model of capitalism. I particularly like how he avoids reducing the ills of capitalism simply to fiscal policy and acknowledges that it is far more systemic issues which have led us to these problems.

[Leonardo]

El trabajo de Graber está en buena medida basado en Hudson.

[DRugh · Rating 5 out of 5]

A solid no holds barred explanation of the financial sector oligarchy. I especially liked his analysis of the 2008 mortgage crisis.

[X Li · Rating 5 out of 5]

preface
now international bankers as parasites
the devel wins where he is able to convince the world that he

doesn't exist
1 mainstream eco focus on produc and consump, based on employment

of labor tangible means of produc and tech potential
2 most loans lent to real estate
3-4 asset price inflation to debt deflation
5 let burden off
6 interets compound
7 debts that can't be paid, won't be, but in two ways
8 bubble could be postponed
9 bankers oppose write down, leading to 2 ecos bankrupt
10 1 percent impose austerity
11 bank plan or govern-elect plan
12 untaxed be interested by bankers, classi value and price theo

said that rent tax doesn't increase prices

1 the financial sector's rise to power
Norman conquest of britain leads to who receive land rent, set

stage to fight of classical eco of land taxation reform
Today’s financial sector thus has taken over the role that the

landed aristocracy played in feudal Europe
finance as the mother of monopolies
public infrastructure to private monopoly rent
financializing industry to turn profits into interest and sto buy
debt leveraging
the financial takeover of government
financial oligarchy replaces democracy

2 the long fight to free economies from feudalism's rentier legacy
best way to free is qufen earned and unearned income
landlord charge and monopoly rent are called patents
the labor theory of value serves to isolate and measure eco rent
tax favoritism for rentiers and the decline of nations
the classical critique of eco rent
finance vs industry

3 the critique and defense of economic rent fro locke to mill
the physiocrats develop national income accounting
adam smith broadens physiocractic rent theory
ricardo throws the banking sector's support behind commerce and

industry
malthus's focus on how landlords invest their gains and spend on

consumption

4 the all devouring magic of compound interest
In a similar way, getting inducing landholders into debt was the

first step to pry away their subsistence lands, beaching

archaic communalistic land tenuresystems.
the exponential doubling and redoubling of debt
the rule of 72
The moral is that the economy’s ability to produce and earn

enough of a surplus to pay exponentially rising interest

charges is limited.
the magic of compound interest vs the eco's ability to pay
1 Neither money nor credit is a factor of production
2 if not pay by productive credit, then by predatory lending
3 aim of predatory lending is debt peonage
4 most financial claims on land rent, ownership demo on credit
5 a rising debt slows material investment eco growth
6 rate of interest not reflect rate of profit, phys produ and

abili to pay, in modern times the rate of interest has been

set mainly to stabilize the balance of payments and hence

exchange rates. Since 2008 it has been set low to re-

inflate asset prices and bank profits.
7 rule of 72
8 modern creditors not cancel debt by pretending mutual

benefits, only in the short run
9 not serve productive eco, but predatory lending
10 exponen grow of debt shrink market slow invest reduce pay

ability
11 rise bedt changes distribution of property ownership unless

public authorities intervene to cancel debt and reverse

expropriation
12 cancel debt was politically easiest when govern or public

institutions were major creditors, because they were cancel

debts owed to themselves, this is an arguement for MMT
financial vs industrial dynamics and 1 per vs 99 per
1815-1914 debt almost paid due to industrial capitalism develo
bennett was one of 1 know financial recycling of interest

receipts into new lend was the driving force of busi cycle
same critism after 2008 was made 100 years ago
compound interest viewed as way of making populations richer

rather than poorer

5 how the 1 per holds the 99 per in exponentially deepening debt
industrial capitalist allow parasites make profits without

porducing value was puzzling to marx
when fed created in 1913, liquidity was thought as only proble
the debt buildup from one financial cycle to the next
deterioration of loan quality to interest only loans and ponzi

lending
pirce gains for real estate taxed at much lower rate
what happens when the exponential buildup of debt ends
financialization at tht eco's expense
as debt grows steadily from one cycle to the next, economies

veer out of balance as revenue is diverted to pay bankers

and bondholders instead of to expand business
That is why they are taking their money and running to the

safety of government bonds

6 rentiers sponsor rent free national income statistics
tax higher income brackets direlect from preventing “unearned”

income from being obtained in the first place as the policy

aim of adam smith
jb clark denies that rentier income is unearned
institutionalist and sociological reformers retained rent theory
no unearned income-income proportioned to productivity
distinguish interest and eco rent from wages and profits
siphoning off the circular flow of production and consumer spend
say's law says production create its own demand
some eco use say law explain the impossibili of full employm,

but in reality, creditor lends money
value free monetary theory of prices
MV=PT doctrine
national income accounts exclude rent extraction and financial

drains
rent deflation
criminal income, smuggling, pollution cleanup costs, crime

prevention and financial bailouts dismissed as

externalities, leading to unheathy gdp
treating eco rent as earnings
eco textbooks by big eco person excludes many kinds of rent
depreciation and the rate of return
real estate over-depreciation
does the financial sector produce a product or a subtrabend from

gdp
Keynesian macroeconomics traces the circular flow among

sectors, wihtout analyzing intrinsic value or the classical

concern for “invested labour” or how revenue is obtained.

Instead, a seemingly empirical statistical picture pretends

that the FIRE sector plays a productive role in helping

economies grow and prosper.

7 the failed attempt to industrialize high finance
how debt service raises costs and prices
david ricardo arugue debt levels and payment of interest didnt
matter, which leads to neoliberal
saint simon and french industrial reform
ss depicts those as vestigial post fuedal overhead
travailleur rather than projectors
as aggregations of finance capital grew larger and more

closely linked to government, banking systems became prone

to such dealings
saint simon's influence on marx and other socialists
marx said usurer’s capital “does not confront the laborer
as industrial capital,” but “merely impoverishes this

mode of production, paralyzes the productive forces instead

of developing them.”
the emergence of german industrial banking
the ww1 debate over german vs anglo dutch banking
german long term socialist plan wins
veblen's analysis of financial distortions of industrial capitali
will financial pessimism trump industrial optimism
This reverses the direction in which classical political

economy seemed to be moving to propel governments out of

the feudal era by reforming the way society employs and

accumulates wealth.

8 the stock market as a predatory arena
underwrites cheating
apple's plague of activist shareholders known as corporate raider
financial vs industrial engineering
stock buyback stock buyback stock buyback
creating financial wealth by debt leverage instead of new

tangible investment
modigliani miller theorem deception
debt financed takeovers

9 from the stock market's origins to junk bonding
origins of modern banking and the stock market
first debt financing served as maritime insurance, across

history
finance investment in industrial production is rare
from royal war debts to stock market
making stock market gains from financial leverage and rent extrac
corporation created to replace shortterm partnerships for

voyages and other similar ventures
banks never in the foresight market
the junk bonding of usa industry replacing equity with high

interest debt
fast return as the only doctrine
pumpers and dumpers
finacial engineering fe fe
google's strategy to avoid the stock market's financial threats
the great disconnect that needs to be explained and reversed
logical end is to buy real estate mines and public untilities

that yield more than the going interest rate

10 finance vs industry two opposite sides of the balance sheet
business school doctrine as maximize stock price
conventional wisdom says low interest rate spur new investment

and employment by lower cost of borrow, in reality, it

provides easier credit for raider to attack companies or for

merger and acquisition
On an economy-wide level, asset-striping can be sustained mainly

by assetprice inflation
business school endorsement of financialization and debt leverage
meet the protestors
bleeding companies and the economy at large
money manager capitalism replaces industrial capitalism
the financial distortion of industrial capitalism
the reversion of 19th century socialism
central bank support for financial bubbles
the bubble eco vs classical industrial growth
inflate asset and company price, put interest charge on buyer,

thus made bubble eco high cost
overhead thought as wealth, thus public and media applaud
the financial disconnect from the industrial eco
before 1980, profit and investment are correlated

11 the bubble eco from asset price inflation to debt deflation
The financial sector’s greatest trick has been to convince the

99 Percent that “the economy” can be judged by how well it

benefits the One Percent
asset price inflation
10 dynamics led the eco to focus on asset price gains
10 dynamics led bubble eco to focus on asset price gains
Rising site value of land from prosperity, population growth

and public spending
The exponential growth of credit
Declining interest rates raise “capitalization rates”
Pension fund investment in the stock market and real estate
Tax favoritism for capital gains and inherited wealth
Lower amortization payments, culminating in interest-only

loans
Lower down payments
Low “teaser” interest rates, with charges exploding in three

years
A secondary market for non-bank mortgage buyers
Outright fraud, “liars’ loans” and toxic financial waste
How financial bubbles raise the break-even cost of labor
once 25% income to 43% income in era of 2000
together 2/3 income paid to fire sector
debt deflation
bernanke thought debt defla only redistr, but not lower consu,

just like the day of malsus
spending propensities differ between 1% and 99%
saving by paying down debt
post 2008 syndrome
the rentier sector's eco overhead

12 the bankers saw it coming but ecomists averted their eyes
learned ignorance and trained incapacity
questions that a relevant eco theory need to answer
orwellian rhetoric as preserv the system
the radical reversals since 1980 in interest rates, asset, wages
structural changes in global eco and politics since 1980s
deregulation leads to an explosion of fraud
the junk math behind junk eco: 1997 nobel prize
wall street insiders saw the crisis coming and sought to

profiteer from it
debt doesn't matter logic fail to recognize who/whom dimension

13 the bailout coup of 2008 saving wall street instead of the eco
how resolving 2008 crisis differed radically from past resolution
bailing out bondholders not the debtors
panicking congress pass tarp bailout with no conditions attached
obama mccain presidential debate sidesteps tarp bailout
preventing china from saving aig

14 the giveaways get more deeply politicized and corrupt
presi elect obama refuse to help over indebted homeowners
Revising TARP’s terms to give easier funding to Wall Street
the fed backs the treasury's bailout much more heavily
bailout as a substitute for financial reform

15 wall street's pretends to insure against the crash
london as global center for junk banking and fictitious insurance
the insurance industry's role in the fire sector
insurance is all about arbitraging probability curves, from

lifespans to accidents and other casualties
It was a case of innovators combining Joseph Schumpeter's

"creative destruction" with a race to the bottom
the illusion that insurance can cope with systemic collapse
The reality is that insuring against any economy’s overall

debt overhead is impossible in principle, because in the

end the debts cannot be paid.
bail out wall street not main street

16 bailing out of goldman via aig
the asymmetry in how aig was treated compared to goldman et al
covert maneuvering and influence peddling by wall street over fed

and treasury
geithner's web of deception
bonus kerfuffle distracts attention from where bailout money went

17 wall street takes control and blocks debt writedowns
assigning financial policy to geithner to block debt relief
obama's false promise to write down bad mortgages
what sophisticated real estate investors do when in negative equi
the path not taken debt revision for underwater homeowners
geithner turn home affordable mortgage program into fiasco
obama's smoothness in misleading voters
when we say he’s anti-business he just ends up doing more for

us
the road to debt peonage
Mortgage credit becomes predatory when it is not created with

safeguardsto keep loans within the reasonable ability of

homebuyers to pay

18 from democracy to oligarchy
today's fi

[Luuc Van · Rating 4 out of 5]

Great, just a bit repetitive

[Lisa Carver · Rating 4 out of 5]

Parasitic? Killing the Host? If the host that Hudson is discussing is humanity it has been infected with finance, insurance, and real estate for centuries and it seems to have flourished during it's period of infection. In fact, the places most infected seemed to thrive relative to the places that remain relatively free from this infection. It really makes me wonder if maybe he hasn't misdiagnosed a critical symbiotic partner as disease the way a body might develop an auto-immune disorder.

What will happen when we kill off these financial microbes? We will empower a vast government bureaucracy to determine what ideas are worthy of funding? What products and services the people need? Who gets to live, work, and do business in which locations? Which loans get written off and which get forced out of business?

Surely this is reactionary. A recipe for a return to a society where a ruler could pass out estates to vassals in exchange for fealty. And in turn those vassals could determine the quality of lives of the serfs below them. Determine which parcels of land or which state owned businesses they could claim as their own theifdoms? Who is bailed out. Who is treated by medicine. Who is given retirement.

It isn't that I have no shared concerns with Hudson. Inequality, climate change, racial and gender equality are huge issues that society needs to tackle aggressively. But central control is hardly a fool-proof or novel solution. I'm sure there is a role for government in problem solving. But I can't see how the government taking over banking, insurance, and real estate so that all the assets of the country could be handed out by corrupt bureaucracies isn't less a solution and more an exchange of one kind of misery for another.

I don't feel like Hudson addresses the empowerment of the bureaucracy at all. To him it seems perfectly clear that those motivated by profit are going to be less effective than those appointed by elected officials or tyrants. I think it's important to note that Lord Acton's quote says that "power corrupts" not that profits corrupt. The fact that the bureaucrats won't be motivated by profit doesn't alter the fact that they are likely to become corrupted by power. And unlike a business that individuals can exercise some protest control over, the bureaucrat is far more likely to be a monopolist, and a monopolist with the recourse to violence.

Hudson is radical. He makes you think about how things are and ask if they should be changed. I recommend the book, but not without a great deal of skepticism for the ideology he's backing.

[Yngve Skogstad · Rating 4 out of 5]

Michael Hudson is a treasure. Every time I read one of his writings or listen to him talk on podcasts or Youtube, I'm left completely immersed in thoughts. I mean, the first few hundred pages of this book took me over a week to get through, owing to the fact that for nearly every paragraph I had to stop and actually think through the implications of what he was saying. This makes for an enormously rewarding reading experience, even though it means the other stuff you’d planned on reading begins piling up…

In this book Hudson takes on the mantle from the classical (political) economists, and delivers an analysis of financialization that I have yet to see anywhere else. The central thesis is argued in an empirical and characteristically no-nonsense fashion, and fills a void in my (and I suspect many other Marxist-influenced leftists') understanding of the modern capitalist economy. One thing I take with me from reading this is that the class divide between creditor and debtor can no longer be treated as an aside, seeing as it has today maybe grown more pronounced than the divide between worker and capitalist, at least in the “most developed” states. Our current economy is a Ponzi scheme, and debts that cannot be paid will not be paid. The question is whether citizens and states alike must all become debt peons before this is accepted as fact.

I have some criticisms of this work, but none that amount to a refutation of the main thesis. I would say Hudson, like many of the economists associated with MMT, unfortunately succumbs to “growthism”, the idea that economic growth in itself is a good thing. I’m also not fully convinced by his portrayal of FIRE-sector state capture as the driving force behind financialization. Lastly, he gets a tad repetitive at times, but that I’m personally a fan of, so thumbs up from me.

[werm · Rating 4 out of 5]

"...today's foundation myth is that all income and wealth is earned productively - as if there were no economic rent (unearned income) as a legacy of feudalism's rentier privileges, and no inherited wealth or insider giveaways. yet these have been the shaping forces of history. that is why they were the focal point of classical political economy - to free society from such privileges and bias."

v good, kinda repetitive and has some weird editing mishaps. overall great analysis tho. starts by redefining classical economics to counter neoliberal misrepresentations of what a "free market" was originally supposed to be. once you think you're in too deep and might never emerge from the morass of economic jargon you're then treated to an absolutely infuriating account of the 2008 crisis - the build-up, the fallout, the bad actors, the corruption and bullshit.

read the footnotes cos mr hudson can be positively savage when he wants to

[Idfaciamus · Rating 4 out of 5]

A very interesting explanation of the role of debt in our economic system. Hudson gives a clear picture of how the financialization of our economy is wrecking it, as if anyone needed a reminder after the collapse of the housing bubble. He also tells us how, like Matt Taibbi and Michael Lewis, how the process works, and it's being played out all over the world in Europe as well as the developing world. It's results can be devastating: Greece, Latvia, and Ireland lost ten per cent of their population due to economic refugees, especially young people, leaving the country. Hudson reinforces what others have told us, that there are two systems of justice - nobody went to jail after the crash - and two economies: one for the one per cent and the other for the rest of us.

[Gabriel · Rating 4 out of 5]

This book is honestly not that well written (although the version I got from the library may have been slightly outdated) but it is fascinating. You won't find ideas like this in a standard economics book. A good editor could make this book into a masterpiece.

[Luís Garcia · Rating 5 out of 5]

A masterpiece with basically all one needs to know and understand about what the author assertively calls "financial neo-feudalism".

(Read in Bang Nam Chuet, Thailand)

[Dave Heberer · Rating 4 out of 5]

Methodically goes through how profit being squeezed through financing is not leaving anything for growing the economy. A thoroughly depressing read.

[Anthony · Rating 5 out of 5]

This is where the real evil of the world is hiding.

[Tech Nossomy · Rating 3 out of 5]

An anthology of some recent financial crises and how misunderstandings on the functioning of economies lead to both booms and busts, with the latter almost always detrimental to tax-paying citizens. The book however suffers from quite a few shortcomings, one of the most glaring ones the absence of data or graphs, if only to summarise or even substantiate the points made.

Then some arbitrarily picked examples:
Regulations that would have helped to avert crises, but are not mentioned by name: EMIR, Dodd-Frank, Volcker.

The anecdote of Calgacus is taken out of context and the excerpt of his speech is apocryphal.

"In nature, parasites tend kill hosts that are dying, using their substance as food for the intruder’s own progeny."
This is an oversimplification and therefore not a useful analogy of a rentier economy. In an economy, concepts such as restructuring and mezzanine capital could be called parasitic, but these are not the same agents as the author refers to.

"Consumer spending has not risen since 2008."
This is untrue: even per capita it has risen steadily up until 2020.

"Debt deflation leads to defaults and foreclosures, while bondholders and banks get bailed out at government expense."
This is not true either, at least not in general. Bondholders suffer when the government or regulator decides on a bail-in, such as happened in Cyprus 2013.

“activist” asset stripping: the word activist is in quotes to satirise the point that the investor in question is not pursuing the goal of the enterprise, but his/her own interests, as if the former does not exist by default.

"The financial sector’s aim is not to minimize the cost of roads, electric power, transportation, water or education, but to maximize what can be charged as monopoly rent. Since 1980 the privatization of this infrastructure has been greatly accelerated."
The first sentence is a strange way of putting it, since lowest cost is poorly defined, and is certainly not true when taking into account the tendering process underlying such projects and mandatory in most developed countries. The second sentence does not explain how this came about: the vested mercantilist interests engineered this at the promise of more prosperity for the workers, but what the conditions were for this to happen is not detailed.

The book is full of hyperboles and lofty claims, and are also repeated throughout. One such claim is: "Austerity leads to default."
Not only is there an absence of a definition of default for sovereign nations, it is not even true in general. Some economists from unorthodox schools claim that Latvia was actually a prime example of austerity leading to economic growth, so there is at least a dichotomy, and one that the author does not mention.

On several occasions the author describes his study of tax-evasion schemes and other nefarious, government-condoned activities, but fails to describe the mechanics. It would have helped to understand not just whether, but also how these wealth-extractive activities rely on accounting tricks, bending policy, legislative coercion, political bribery, watering down regulations etc.
The author even cites the banker's marketing ploy:
"The trick in this ideological war is to convince debtors to imagine that general prosperity depends on paying bankers and making bondholders rich — a veritable Stockholm Syndrome in which debtors identify with their financial captors."
Sure, agreed, but then how exactly does this work? It is at face value a fairly general statement. Is it misleading advertising, is it lax FCC rules regarding airtime, is it simply poor consumer protection at the point of sale?

One of the chapters deals with the Irish banking crisis, paying much attention to how bankers were bailed out, instead of the depositors. However, at the time the book was published it was not known that 3 senior bankers from Anglo Irish Bank were convicted. Other litigation suits and investigations are ongoing against both the company and their directors.
More generally, not mentioning the deterrent of personal prosecution as a powerful tool against corruption is quite an omission.

The main premise of the book is that debt write-downs ought to be enacted to root out monopolist behaviour and allow capital to flow to enterprise that produce real output and for markets to function properly to the benefit of the population. The main shortcoming is that this premise is not sufficiently detailed, other than stating that "many such policies were suggested in the wake of the 2008 crisis".

[Brett · Rating 3 out of 5]

The Author gets all in one place with diligent research on what has been going on in the World of finance between 2008 and 2015; this achievement, I feel must have been at some personal cost to the author with a descent into the murky and tangled underworld of corruption, brushing the deadly tentacles of Goldman Sacs, the IMF, the ECB and EC; how can one emerge sane and rational after such a journey into the depths of Hades? welcome to the modern World of high finance. The result is to educate the reader and demonstrate that the larger part of the World's finance sector today exists simply for its own interests much like an exclusive club; and that like a parasite it is sucking the fat out of the real economy impoverishing those who work and toil for an honest living.

There are, however, a some reasons to criticize the author's approach:

1. There are a lot of typos and typesetting errors; (a new proof read edition could correct this?)
2. At time the text becomes a bit of a rant against all the 'neoliberal rentiers' with the Wall Street section getting a bit repetitive; and
3. The 'solution' of inflationary economics (as I understand it) is one that previous socialist governments have tried and failed with.

By the closing parts the black coffee is flowing, it's past midnight, the revolution is brewing and the text must be got to print before the work is banned, a comma here, full stop there, colliding words, who cares...the author is getting up speed, about to reach escape velocity, to leave the orbit of reason, headed for the Venezuelan finance ministry at terminal velocity, print some more money but give it to the people not the neoliberal rentiers....

OK, the above is a bit unfair, but the author makes no bones about being a socialist and whilst talking about loan accounts having a credit (saver) and debit (debtor) side, which he explains well he does not appear to use the word 'balance' in the sense of looking at things from another point of view, for example he notes that a lot of the creditors of the Greek banks were Greek pension funds but only expresses concerns that the others were foreign banks.

The aspects of the book that I thought best were the historical context given to the banking, fiscal and monetary systems we have inherited, the close up detail of the US bank bailouts, the debt crises in Argentina, Latvia, Ireland and Greece and the well researched foot notes, likewise, the way in which asset striping, share buy-backs and 'nepotism' occurs across the financial ministries and investment banks with 'descent from heaven' appointees guarding their former master's interests have all contributed to the stranglehold that big fiance has on the real economy.

"To set the stage for this discussion, it is necessary to explain that what is at work is an Orwellian strategy of rhetorical deception to represent finance and other rentier sectors as being part of the economy, not external to it. This is precisely the strategy that parasites in nature use to deceive their hosts that they are not free riders but part of the host's own body, deserving careful protection."

"If banking really provides services equal in value to the outsized wealth it has created for the One Percent, why does it need to be bailed out"...

"the devil wins at the point he is able to convince the world that he doesn't exist."

This is an expose and in my opinion worth the effort of reading. It will make evident to those who have yet to grasp it that the present monetary system is inherently unfair and is destroying the middle classes and a just society and starting to nibble away at the rule of law itself with access to justice now largely based on how much capital one has. The current monetary system and the failure of national governments to reign it in is indeed threatening democracy and a merit based society to its core. What I do not agree with so much is the author's views as to the solution. As the 1% might wish he appears to have gone to the opposite extreme; what his account lacks is balance. Such radical treatment as he proposes might also kill the patient.

[Voyt · Rating 5 out of 5]

Exceptional rant on omnipresent debt (credit bubble) created by global central banksism...
POSTED AT AMAZON 2016
....wow, albeit very depressing.
Hudson goes through different stages of capitalist economies, reviews the past starting right after the ww2, arrives at XX century neoliberal banking policies (great moderation, great indebtedness, great polarization), eventually examines still persisting (and perhaps even deepening) 2008 crisis of great austerity.
It is not easy read, requires some effort to understand and deal with banking terminology. But it teaches a lot. Why all G20 are deep in miasma of debt deflated economy? Hudson is very specific and does not mince words answering to this question. He blames 'money-manager' capitalism/'stockbroker' economics for it. Corporate riders, shareholders activists, bondholders are protected, while middle class and less fortunate taxpayers being financially 'executed'.
Hudson's vocabulary includes:
-financial short-termism
-bubble economy
-'trickle down' rationalization of junk economy
-predatory lending
-industrial vs. finance capitalism
-debt/equity ratio !!
-junk bonds
-debt leveraging...and many others.
To him 'finance is not the economy' - neoliberal financialization is not how to create a viable true 'industrial' economy (as per Adam Smith or Irving Fisher).
Perhaps this book may be the good follow up to 2007 notable bestseller "The Shock Doctrine-The Rise of Disaster Capitalism" by Noami Klein - a critical analysis of the history of neoliberal economics. It is important to notice, that Michael Hudson is not against capitalism. He is frustrated by decades of "laissez faire" form of it. Highly recommended.

[George Haun · Rating 5 out of 5]

This is great book with insights that can change the way you think about the way the world is run today. Hudson makes the argument that we are entering an era of neo-feudalism on a world scale because the modern oligarchs have mostly gained control of governments, major banks, and monetary systems allowing the 1% to own or extract rent from an ever increasing amount of the world's wealth producing assets. He also goes on to explain the tactics used to keep the attention of the rest of society off of the 1% which is feeding on it like parasites, driving it deeper into debt serfdom. My take is that squabbles between major political parties are mostly sideshows since they are already controlled by factions of the 1% anyway. If the general population understood the real issue causing its stress and focused its political energy on fixing the root problem, then a meaningful revolution for the masses could be affected.

Where I take issue with Hudson is on the solution. He lays out an agenda which many would consider socialist. His argument for this is that government has to be strong enough to take on the oligarchs. I don't understand why government has to be large and complex to be strong. I think that increasing complexity in government just offers more opportunities for corruption to set in. Secondly, I remain convinced that socialism is a path that easily leads to totalitarianism as argued by F. A. Hayek in "The Road to Serfdom". Hudson bashes "The Road to Serfdom" in his book, appearing to miss Hayek's point that government's role is to set rules/regulate to head off excesses of capitalism, but not to plan the economy. In the end, the choice of either socialism or free market capitalism as a solution requires active oversight by the people to prevent excesses.

Before any solution can be implemented, broader society has to understand the problem. This book is an excellent place for anyone to start on that.

[John smith · Rating 5 out of 5]

Finally finished this one. 👍🏻💯 The most elucidating writing about economics I have ever read. Hudson does a great job explaining the differences between industrial capitalism and financial capitalism and how conflating the two has lead to dangerous consequences. Hudson demonstrates how the financial sector has come to act as a parasite on the industrial capitalist system, lowering wages and shrinking markets leading to debt deflation & austerity. One of his main arguments is that the financial sector does not invest in production, but rather through predatory lending practices has indebted workers and industry by inflating the prices of assets from the real estate and insurance sectors of the economy. He does an incredible job revealing the assumptions of contemporary dominant economic thought and the way the retreat from what he says was classical economic thought’s focus on liberating markets from monopoly power has lead today’s current massive concentration of economic/political power. READ THIS BOOK!

[Roger · Rating 4 out of 5]

Hudson is at his best when he is writing anecdotal, aphoristic summaries of his larger ideas, and Killing the Host is full of this writing. It's a 400ish page overview of how the financial capitalist framework is parasitic to human productivity and welfare, focusing mostly on the dual-issue of debt deflation and asset-price inflation on both domestic (US) and international (Eurasia) economies.

Mr Hudson could benefit from a better editor/publisher for his books. This edition was rife with spelling, grammar, and punctuation errors, in addition to some formatting mistakes and overall poor organization.

Hudson is a brilliant mind talking about the most important issues underlying our world economy and all that it affects (everything). His writing is equally brilliant, but only intermittently—he sometimes goes off on tangents or falls victim to poor organization.

I would recommend anyone this book—despite my apprehensions about its form—purely because its content is so supremely important. Hudson's occasionally genius aphorisms are a nice bonus too.

[David · Rating 5 out of 5]

If the problem of the economy can be boiled down to just one thing it will be compound interest. The aim of the book is to show how compound interest has turned the financial sector into a parasite (and not a symbiotic parasite), siphoning off the wealth from the real economy. This is because financial claims inevitably expand faster than the ability of the economy to produce actual goods and services. The effect is that the vast majority of the population now work for those who are able to weaponize this compound interest - (Finance, Insurance, and Real Estate).

The book is well-argued and well-written and the solutions suggested are reasonable (even though I won't hold my breath that it would ever be implemented).


HIGHLY RECOMMENDED if you wish to move beyond simply analyzing the financial and economic systems through the lens of this or that proposed regulations.