Paulie cribs from me again
Krugman discovers rentier interests—finally. Only my version is better.
Me, in Wall Street, 1996:
[B]ehind the abstraction known as “the markets” lurks a set of institutions designed to maximize the wealth and power of the most privileged group of people in the world, the creditor–rentier class of the First World and their junior partners in the Third.
Paul Krugman, today:
I was originally going to end this post by saying something about stupidity, but that’s not right: the people at the BIS aren’t stupid. What’s going on here is something different and worse: we’re seeing the desire for conventional respectability outweighing the lessons of history; we’re seeing vague prejudice (prejudice that just so happens to serve the interests of rentiers) trumping analysis.
And from his own link, to something from earlier this month:
Still, thinking of what’s happening as the rule of rentiers, who are getting their interests served at the expense of the real economy, helps make sense of the situation.
Why wait 15 years for Paulie to catch up, eh?
LBO News from Doug Henwood 
Mr. Henwood, why this attack on Krugman? He may be behind the ball, but at least he’s one of the few prominent voices to even bring the rentier issue up at all. Isn’t that better than nothing, and aren’t there far more repugnant voices, including on the “official left,” worth attacking?
That really was a great book, Doug.
Paulie? After reading the (fairly) recent piece about him in New York magazine, I have to doubt his wife even gets away with calling him that.
Self-promotion, James Call. Why else?
For anyone who hasn’t read it, Doug’s book has the best capsule history of the Federal Reserve.
Ha ha ha… fair enough. Agreed with the above commenters that Wall St. is a must-read.
the creditor–rentier class of the First World ///// That sounds like finance capital.
Those on the left who write about the economy will seldom, if ever, be respected by mainstream economists. And it will be a rare thing if they are ever cited. But the worst thing a leftist can do is what Samuel Bowles and Herbert Gintis did when they wrote a ridiculous letter to Bill Clinton urging him to “do the right thing.” Sort of like the “official leftists” who were foolish enough to believe the “hope” nonsense of Obama.
Krugman’s grasp of political power and its connection to economic power is very limited. And he knows nothing at all about race and many other pertinent issues. But look at his background. There is little in it to suggest that he would grasp the analysis of Karl Marx. Krugman seems almost childishly naive sometimes. Not, I suppose, when he takes his big checks to the bank.
Replace the word ‘rentiers’ with ‘the powerful’ and you’ve just described how things have worked for all of human history. To say that either Doug or Krugman has ‘discovered’ this is disingenous, this is a basic observation of human behaviour tarted up in economic language.
Power takes different forms, and isn’t always unchallenged. Now, holding big gobs of financial instruments are the mechanisms of power. It hasn’t always been this way. And sometimes, you know, you can challenge the powerful.
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The power of finance capital has always been the hallmark of advanced capitalism. It’s what differentiates the Spanish empire, and its obsession with the plunder of gold and religious zealotry, with the British, who were more interested in setting up HSBC in mid 19th century Hong Kong.
Centers of finance capital can change, as they are related to the expropriation of production. Yes the very elite may still live in Hillsborough, CA, but more and more junior associates will be working in Singapore, a place unrecognizable from 30 years ago (as is Shanghai).