Michael Hudson (economist)

His father, Nathaniel Carlos Hudson (1908–2003), received an MBA from the University of Minnesota in 1929, the year the Great Depression struck.

His father joined the trade union struggle, became an active Trotskyist trade unionist, editor of the Northwest Organizer and The Industrial Organizer, and wrote articles for other trade union publications.

When Hudson was three years old, his father was arrested on Smith Act violation grounds, an act aimed at suppressing Trotskyists in the United States.

He had been one of the leaders of the Minneapolis general strikes from 1934 to 1936.

Hudson received his primary and secondary education in a private school at the University of Chicago Laboratory Schools.

After his graduation, he entered the University of Chicago with two majors: Germanic philology and history.

Michael Hudson (born March 14, 1939) 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.

Hudson was born on March 14, 1939, in Minneapolis.

Hudson is a fifth-generation American as on his maternal line he has Ojibwe blood.

Hudson graduated from the University of Chicago (BA, 1959) and New York University (MA, 1965, PhD, 1968) and worked as a balance of payments economist in Chase Manhattan Bank (1964–68).

In 1959, Hudson graduated from the University of Chicago with a bachelor's degree.

After graduation, he worked as an assistant to Jeremy Kaplan at the Free Press in Chicago.

He managed to obtain the rights to the English language editions of the works of György Lukács as well as the rights to the archives and works of Leon Trotsky after the death of Trotsky's widow, Natalia Sedova.

Hudson found work at the publishing house neither interesting nor profitable.

Hudson, who had studied music from his childhood, moved to New York in 1960 in hopes of becoming a pupil of the conductor Dimitris Mitropoulos, but these plans were not to be realized.

His best friend growing up was Gavin MacFadyen, later a documentary film maker, founder in London of the Centre for Investigative Journalism and director of WikiLeaks.

MacFadyen had introduced Hudson to Terence McCarthy who was an Irish communist and was the translator of Marx’s Theories of Surplus Value.

McCarthy became his mentor.

He discovered that the United States deficit was evident only in the military sphere: "My charts revealed that the U.S. payments deficit was entirely military in character throughout the 1960s. The private sector—foreign trade and investment—was exactly in balance, year after year, and "foreign aid" actually produced a dollar surplus (as it was required to do under U.S. law)."

In 1961, Hudson enrolled in the Economics Department of New York University.

His master's thesis was devoted to the development philosophy of the World Bank and special attention was paid to credit policy in the agricultural sector.

Many years later, Hudson recognized: "The topics that most interested me ... were not taught at New York University where I took my graduate economics degrees. In fact, they are not taught in any university departments: the dynamics of debt, and how the pattern of bank lending inflates land prices, or national income accounting and the rising share absorbed by rent extraction in the Finance, Insurance and Real Estate (FIRE) sector. There was only one way to learn how to analyze these topics: to work for banks."

In 1964, Hudson, who had just received his master's degree in economics, joined Chase Manhattan Bank's economics research department as a balance of payments specialist.

His task was to identify the payment capacity of Argentina, Brazil, and Chile.

Based on export earnings and other international payment data, Hudson had to determine the income the bank could derive from the debt that these countries had accumulated.

He recalled that, "I soon found that the Latin American countries I analyzed were fully 'loaned up'. There were no more hard currency inflows available to extract as interest on new loans or bond issues. In fact, there was capital flight."

Among other tasks that Hudson performed at Chase Manhattan was an analysis of the balance of payments of the US oil industry and the tracking of "dirty" money that ended up in Swiss banks.

According to Hudson, this work gave him invaluable experience in understanding how banks and the financial sector work as well as understanding how bank accounting and real life correlate.

Hudson left his job at the bank to complete his doctoral dissertation.

It was successfully defended in 1968 and in 1975 it was published under the title Economics and Technology in 19th Century American Thought: The Neglected American Economists.

In 1968, Hudson joined the accounting firm Arthur Andersen, for whom he expanded his analysis of payment flows for all areas of US production.

He was assistant professor of economics at the New School for Social Research (1969–72) and worked for various governmental and non-governmental organizations as an economic consultant (1980s–1990s).

Hudson has devoted his career to the study of debt, both domestic debt (loans, mortgages, interest payments), and external debt.

In his works, he consistently advocates the idea that loans and exponentially growing debts that outstrip profits from the real economy are disastrous for both the government and the people of the borrowing state as they wash money (payments to usurers and rentiers) from turnover, not leaving them funds to buy goods and services, thus leading to debt deflation.

Hudson notes that the existing economic theory, the Chicago School in particular, serves rentiers and financiers and has developed a special language designed to reinforce the impression that there is no alternative to the status quo.

In a false theory, the parasitic encumbrances of a real economy, instead of being deducted in accounting, add up as an addition to the gross domestic product and are presented as productive.

Hudson sees consumer protection, state support of infrastructure projects, and taxation of rentier sectors of the economy rather than workers, as a continuation of the line of classical economists today.

In an April 2006 article in Harper's, just before the Great Recession of 2007-08, Hudson predicted a crash of US housing prices.

His thesis was devoted to US economic and technological thought in the 19th century.