Economist/Futurist Michael Hudson often points out that in the 19th century, America's industrial capitalists encouraged the government to build public infrastructure—roads, bridges, canals, railroads, and public education—to minimize costs and obtain benefits of efficiency. They also treated workers as assets and provided them such benefits as to insure productivity, such as housing, healthcare, and healthy food. Their motto was that "highly paid American workers can outcompete the pauperized workforce of Europe."
We know that capitalism lost its way when it became dominated by finance capitalism and in time, neoliberalism.
China did not have this problem because after the victory of the Red Army, Chinese finance capitalists grabbed all the loot they could carry and fled to Taiwan or to America's Chinatowns. Thus the PRC behaves much like earlier American industrial capitalists, but applied to the whole population. Chinese workers pay about 10% of their income for housing, enjoy free education from infancy to PhD, have access to healthcare, are able to easily travel all over the country on efficient highspeed rail and other forms of transportation. Thus, a Chinese worker who makes $8/hour lives better than an American worker at $32/hour.
In terms of democracy, China's form is vibrant and active, starting at the local level. It just doesn't look like the West's liberal democracy with its campaigns, election contributions, and facile debates.
This is not a mystery that can only exist in exotic China, but one that can be emulated everywhere, initially by getting rid of the parasites of financial capitalism (send them to Taiwan? Ukraine?), then practicing genuine democracy to sort out the future.
This is a fascinating take on this issue and there's a lot to your argument to consider and admire. Tedder130, you should write more often. Your voice deserves to be heard. I've just subscribed to your Substack.
I’m surprised that you think that this is even a viable solution to the current issues facing our economy. If you follow the debate I posted with him here, you can see that he is somewhat delusional in his romanticism of Marxist ideology. He offers little more than an emotional plea for wealth redistribution without ever acknowledging the systemic failures of communism. I encourage you to join in with your thoughts on this
As a conservative, I would argue that the passage presents an overly romantic and selective version of both American history and Chinese governance. Early U.S. industrialists certainly benefited from infrastructure, but they were not benevolent proto-social democrats; they supported public works because these projects expanded markets and profits, not because they viewed workers as state-supported “assets.”
The idea that capitalism “lost its way” once finance grew is also misleading from a conservative perspective. Finance is not a parasite but a necessary engine that allocates capital, fuels innovation, funds homeownership, and supports entrepreneurship. The real distortions, come from excessive government intervention, cronyism, and regulatory overreach—not from the existence of financial markets themselves.
The portrayal of China, meanwhile, would strikes me as dangerously one-sided. Claims that Chinese workers live better than Americans and that China practices a “vibrant” democracy ignore censorship, lack of political rights, unreliable state statistics, uneven access to education and healthcare, and the authoritarian structure of the Chinese Communist Party. China’s economic success stems mostly from its partial embrace of market principles, not from central planning.
Finally, the suggestion that societies should “get rid of” financial actors by sending them to Taiwan or Ukraine would be seen as illiberal and alarming, advocating collective punishment rather than rule of law. Taken together, I say the passage idealizes authoritarianism, oversimplifies capitalism, and promotes solutions inconsistent with economic freedom and democratic values.
To begin, I believe that neither the German nor American industrialists were benign socialists, they simply realized the importance of workers. The problem with 'finance capitalism' is that the owners lose touch with the source of their income. They just collect rent, interest, financial fees, and dividends. I call this kind of unearned income parasitic.
Your opinion of China is heavily influenced by Sinophobia, anti-communist, pro-capitalist logic and is not even close to reality. I know Chinese, have studied China's past and present, and have worked in China. You? Read some articles in American magazines, have you?
I am not concerned with the good or bad of capitalism, but I see no benefit from financialization as we now know it. I am sure at one time, money men were productive and important to civilization, but not in this day. I suppose you remember the French Revolution when the people got rid of their parasites with guillotines? In my naiveté, I actually believe that these financial parasites can be re-educated and become productive again, but it is true that China was not troubled by financial dominance because the financiers grabbed their loot and ran away.
Let me take a moment to refute your post point by point.
Your response rests on a set of assumptions that do not withstand scrutiny. First, you frame 19th-century American and German industrialists as pragmatically pro-worker, yet you ignore the profound exploitation that accompanied rapid industrialization—long hours, unsafe factories, child labor, and fierce resistance to unions. Recognizing that workers are “important” is not the same as treating them well, and invoking this history to justify a modern anti-finance narrative creates a misleading continuity. The claim that all income from rents, interest, or financial services is “parasitic” oversimplifies the complex and essential role that financial markets play in modern economies. Capital formation, risk management, insurance, credit access, and investment flows are the backbone of entrepreneurship and growth; dismissing these as mere extraction replicates the same reductionism you accuse others of.
Your defense of China also substitutes personal experience for systematic evidence, while attributing disagreement to “Sinophobia” rather than engaging with substantive critiques. Admiring aspects of China’s development model does not require denying the well-documented realities of censorship, political repression, economic opacity, and large regional inequalities. The idea that China avoided “financial dominance” simply because capitalists fled in 1949 ignores the fact that China’s modern prosperity has emerged only after it embraced market mechanisms, foreign investment, competitive export industries, and a quasi-capitalist ecosystem far removed from Mao-era economics. To present this transformation as proof of the irrelevance of finance misunderstands China’s own development story. Notably, the mass exodus of the financier class was attributed to the rise of communism, forced collectivism and ultimately, the extermination of millions of political enemies of the ruling powers.
Finally, your invocation of the French Revolution and the suggestion that “financial parasites” be re-educated or removed is not only historically misguided but troubling in its political implications. Democratic societies do not solve economic inefficiencies by targeting entire professions for punishment. Modern economies need prudent regulation, stronger labor protections, and fairer distribution of gains—but they do not need moral denunciations of entire sectors as enemies of the people. Reducing a complex economic system to a simple struggle between “productive workers” and “parasitic financiers” replaces analysis with ideology and overlooks the far more constructive question: how to balance markets, state power, and finance in ways that maximize freedom, innovation, and shared prosperity.
Your last paragraph makes eminent sense to me, and "how to balance markets, state power, and finance in ways that maximize freedom, innovation, and shared prosperity" is precisely my motive. You sound like a communist!
About the rest, first, neither you nor I was alive in the 19th century, and whether there was exploitation or not, the record stands that in America and in Germany, the state developed extensive public infrastructure that enabled prosperity. Second, Professor Hudson quotes an American of the time about prosperous American workers being superior to pauperized European labor. Furthermore, Karl Marx wrote of his belief that industrial capitalism would evolve into socialism in time (one view of WWI is that it was a struggle between industrial capitalism of Germany and financial capitalism of England. Finance won).
I don't believe that entrepreneurship, effort, ambition are parasitic. What is parasitic is a landlord collecting rent "in his sleep", a person who bought a patent collecting license fees, a corporate raider who plunders the company he bought, inheritance with its trust fund babies, the practicers of predatory interest (usury), and so on. At this point in time, the parasites of finance suck the life out of capitalist economies. If you cannot see the faults of financial capitalism, we have nothing to discuss.
Your concern for rich people is touching. However, there are kind ways to not have rich, parasitical people. The vast wealth of our time is a product of insufficient taxation on income, and the simple fix is to practice progressive taxation on incomes and financial rent. Coupled with a high inheritance tax and billionaires go away in a few generations, which I agree is kinder than chopping off their heads.
Finally, you opinion of China is based on malign propaganda. You don't have a clue about the Chinese economy or political system. The fact is that China holds the best hope for humanity, if the Americans don't blow up the world.
Your reply raises important historical and philosophical questions, but several of your claims rely on very broad generalizations that deserve more nuance. First, acknowledging that 19th-century infrastructure helped American and German industry does not contradict the fact—well documented by historians—that industrialization involved both progress and exploitation. Recognizing the darker side of that period is not to deny the achievements of infrastructure projects; it is simply to avoid drawing too tidy a lesson from a complex era. Likewise, citing a historical quote about “prosperous American workers” does not establish that early capitalism naturally tended toward worker-centered policy. Those high wages were the result of unique conditions—vast land, labor scarcity, immigration, and political battles—not evidence that capitalism inherently evolves toward benign outcomes.
Your distinction between “productive” and “parasitic” activities deserves more careful treatment as well. It is true that some forms of financial behavior—predatory lending, manipulative corporate takeovers, regulatory arbitrage—can be harmful. Yet it does not logically follow that all returns on capital, patents, rents, or financial services are parasitic. Financial markets exist because they enable investment, risk-sharing, credit access, innovation, and entrepreneurship at scales that would otherwise be impossible. Money does not appear “in someone’s sleep”; it flows because someone else needed capital, insurance, liquidity, or infrastructure. If the objective is to curb abusive practices, targeted regulation, antitrust enforcement, and better transparency are far more realistic solutions than labeling entire categories of economic activity as illegitimate.
Your policy proposals—progressive taxation, inheritance taxation, and greater limits on financial rents—are legitimate topics for democratic debate, but they should be justified on pragmatic grounds rather than framed as moral crusades against “parasites.” Societies function best when they avoid reducing complex economic ecosystems to a struggle between virtuous workers and villainous owners. In practice, productive economies contain a mix of labor, capital, and entrepreneurial risk-taking, and excess concentration of power can occur in either the private sector or the state. Maintaining balance—rather than abolishing one side—is precisely what keeps freedom and prosperity alive.
Finally, your insistence that differing views on China must come from “malign propaganda” is unfair. Reasonable people can criticize China’s political system based on well-documented evidence: constraints on press, lack of competitive elections, detention of dissenters, and tight Party control over courts and civil society. These facts can coexist with admiration for China’s success in poverty reduction, infrastructure growth, or manufacturing efficiency. To claim that China is “the best hope for humanity,” while dismissing all critique as ignorance, substitutes ideology for evidence. No nation—China, the U.S., or any other—should be placed beyond critical scrutiny.
In short, we can debate taxation, capitalism, financial reform, and China’s development without resorting to caricatures of opponents or sweeping moral judgments about entire classes of people. Constructive dialogue requires acknowledging complexity, not dividing the world into heroes and parasites.
Please! Do you think I am ignorant of the class war and labor exploitation? Next, you fall into the American economic heresy of claiming that all income is earned income. This is precisely the fault of the current tax system and the reason for such vast inequality we now have. Your opinion of capitalism is just that, an opinion crafted from years of propaganda. There are lots of ways that societies have formed capital accumulation and developed their societies in history, and the one we have now is the worst because of exploitation and alienation.
If you think for one minute that you possess an accurate vision of China and her economy, I will sell you a nice bridge in New York. There are a few activists and scholars in the US who do know, such as Michael Hudson and Carlos Martinez, both of whom are Marxists who have spent time in China. Any other perspective or opinion is tainted either by anti-communism or Sinophobia. If you read anything else, it will be wrong on its face because of the prejudices of the author.
We can start our dialog at any level, but you who want to deflect from basic defects, who are not willing to 'see things as they are' have little to bring to a discussion. In short, the base discussion involves the choice between socialism and barbarism—Rosa Luxembourg.
There's an under reported provision in the new Government bill, with the nickname "Hemp Ban", which puts a big question mark on the future of the $126B cannabis business. The ban doesn't take effect until Nov 2026. So, for the next 10 months the cannabis lobbyists can feather the nests of the lawmakers to get an amendment passed. Once again, congress members will get rich on the backs of those who rely on THC for medical conditions.
Thanks much for the news and stats. With that infomation it boggles my mind why people in Florida still support Trump? Or maybe they dont blame him for it? It was Bidens fault still? Or that Trump is one of them? (smile). Maybe those people on SNAP dont vote?? Maybe those are the ones who DID VOTE for the democrats. Or that being "woke" is more of a fear for Floridians than that everyone has enough food?
Economist/Futurist Michael Hudson often points out that in the 19th century, America's industrial capitalists encouraged the government to build public infrastructure—roads, bridges, canals, railroads, and public education—to minimize costs and obtain benefits of efficiency. They also treated workers as assets and provided them such benefits as to insure productivity, such as housing, healthcare, and healthy food. Their motto was that "highly paid American workers can outcompete the pauperized workforce of Europe."
We know that capitalism lost its way when it became dominated by finance capitalism and in time, neoliberalism.
China did not have this problem because after the victory of the Red Army, Chinese finance capitalists grabbed all the loot they could carry and fled to Taiwan or to America's Chinatowns. Thus the PRC behaves much like earlier American industrial capitalists, but applied to the whole population. Chinese workers pay about 10% of their income for housing, enjoy free education from infancy to PhD, have access to healthcare, are able to easily travel all over the country on efficient highspeed rail and other forms of transportation. Thus, a Chinese worker who makes $8/hour lives better than an American worker at $32/hour.
In terms of democracy, China's form is vibrant and active, starting at the local level. It just doesn't look like the West's liberal democracy with its campaigns, election contributions, and facile debates.
This is not a mystery that can only exist in exotic China, but one that can be emulated everywhere, initially by getting rid of the parasites of financial capitalism (send them to Taiwan? Ukraine?), then practicing genuine democracy to sort out the future.
This is a fascinating take on this issue and there's a lot to your argument to consider and admire. Tedder130, you should write more often. Your voice deserves to be heard. I've just subscribed to your Substack.
I’m surprised that you think that this is even a viable solution to the current issues facing our economy. If you follow the debate I posted with him here, you can see that he is somewhat delusional in his romanticism of Marxist ideology. He offers little more than an emotional plea for wealth redistribution without ever acknowledging the systemic failures of communism. I encourage you to join in with your thoughts on this
As a conservative, I would argue that the passage presents an overly romantic and selective version of both American history and Chinese governance. Early U.S. industrialists certainly benefited from infrastructure, but they were not benevolent proto-social democrats; they supported public works because these projects expanded markets and profits, not because they viewed workers as state-supported “assets.”
The idea that capitalism “lost its way” once finance grew is also misleading from a conservative perspective. Finance is not a parasite but a necessary engine that allocates capital, fuels innovation, funds homeownership, and supports entrepreneurship. The real distortions, come from excessive government intervention, cronyism, and regulatory overreach—not from the existence of financial markets themselves.
The portrayal of China, meanwhile, would strikes me as dangerously one-sided. Claims that Chinese workers live better than Americans and that China practices a “vibrant” democracy ignore censorship, lack of political rights, unreliable state statistics, uneven access to education and healthcare, and the authoritarian structure of the Chinese Communist Party. China’s economic success stems mostly from its partial embrace of market principles, not from central planning.
Finally, the suggestion that societies should “get rid of” financial actors by sending them to Taiwan or Ukraine would be seen as illiberal and alarming, advocating collective punishment rather than rule of law. Taken together, I say the passage idealizes authoritarianism, oversimplifies capitalism, and promotes solutions inconsistent with economic freedom and democratic values.
To begin, I believe that neither the German nor American industrialists were benign socialists, they simply realized the importance of workers. The problem with 'finance capitalism' is that the owners lose touch with the source of their income. They just collect rent, interest, financial fees, and dividends. I call this kind of unearned income parasitic.
Your opinion of China is heavily influenced by Sinophobia, anti-communist, pro-capitalist logic and is not even close to reality. I know Chinese, have studied China's past and present, and have worked in China. You? Read some articles in American magazines, have you?
I am not concerned with the good or bad of capitalism, but I see no benefit from financialization as we now know it. I am sure at one time, money men were productive and important to civilization, but not in this day. I suppose you remember the French Revolution when the people got rid of their parasites with guillotines? In my naiveté, I actually believe that these financial parasites can be re-educated and become productive again, but it is true that China was not troubled by financial dominance because the financiers grabbed their loot and ran away.
Let me take a moment to refute your post point by point.
Your response rests on a set of assumptions that do not withstand scrutiny. First, you frame 19th-century American and German industrialists as pragmatically pro-worker, yet you ignore the profound exploitation that accompanied rapid industrialization—long hours, unsafe factories, child labor, and fierce resistance to unions. Recognizing that workers are “important” is not the same as treating them well, and invoking this history to justify a modern anti-finance narrative creates a misleading continuity. The claim that all income from rents, interest, or financial services is “parasitic” oversimplifies the complex and essential role that financial markets play in modern economies. Capital formation, risk management, insurance, credit access, and investment flows are the backbone of entrepreneurship and growth; dismissing these as mere extraction replicates the same reductionism you accuse others of.
Your defense of China also substitutes personal experience for systematic evidence, while attributing disagreement to “Sinophobia” rather than engaging with substantive critiques. Admiring aspects of China’s development model does not require denying the well-documented realities of censorship, political repression, economic opacity, and large regional inequalities. The idea that China avoided “financial dominance” simply because capitalists fled in 1949 ignores the fact that China’s modern prosperity has emerged only after it embraced market mechanisms, foreign investment, competitive export industries, and a quasi-capitalist ecosystem far removed from Mao-era economics. To present this transformation as proof of the irrelevance of finance misunderstands China’s own development story. Notably, the mass exodus of the financier class was attributed to the rise of communism, forced collectivism and ultimately, the extermination of millions of political enemies of the ruling powers.
Finally, your invocation of the French Revolution and the suggestion that “financial parasites” be re-educated or removed is not only historically misguided but troubling in its political implications. Democratic societies do not solve economic inefficiencies by targeting entire professions for punishment. Modern economies need prudent regulation, stronger labor protections, and fairer distribution of gains—but they do not need moral denunciations of entire sectors as enemies of the people. Reducing a complex economic system to a simple struggle between “productive workers” and “parasitic financiers” replaces analysis with ideology and overlooks the far more constructive question: how to balance markets, state power, and finance in ways that maximize freedom, innovation, and shared prosperity.
Your last paragraph makes eminent sense to me, and "how to balance markets, state power, and finance in ways that maximize freedom, innovation, and shared prosperity" is precisely my motive. You sound like a communist!
About the rest, first, neither you nor I was alive in the 19th century, and whether there was exploitation or not, the record stands that in America and in Germany, the state developed extensive public infrastructure that enabled prosperity. Second, Professor Hudson quotes an American of the time about prosperous American workers being superior to pauperized European labor. Furthermore, Karl Marx wrote of his belief that industrial capitalism would evolve into socialism in time (one view of WWI is that it was a struggle between industrial capitalism of Germany and financial capitalism of England. Finance won).
I don't believe that entrepreneurship, effort, ambition are parasitic. What is parasitic is a landlord collecting rent "in his sleep", a person who bought a patent collecting license fees, a corporate raider who plunders the company he bought, inheritance with its trust fund babies, the practicers of predatory interest (usury), and so on. At this point in time, the parasites of finance suck the life out of capitalist economies. If you cannot see the faults of financial capitalism, we have nothing to discuss.
Your concern for rich people is touching. However, there are kind ways to not have rich, parasitical people. The vast wealth of our time is a product of insufficient taxation on income, and the simple fix is to practice progressive taxation on incomes and financial rent. Coupled with a high inheritance tax and billionaires go away in a few generations, which I agree is kinder than chopping off their heads.
Finally, you opinion of China is based on malign propaganda. You don't have a clue about the Chinese economy or political system. The fact is that China holds the best hope for humanity, if the Americans don't blow up the world.
I will be respectful in my response.
Your reply raises important historical and philosophical questions, but several of your claims rely on very broad generalizations that deserve more nuance. First, acknowledging that 19th-century infrastructure helped American and German industry does not contradict the fact—well documented by historians—that industrialization involved both progress and exploitation. Recognizing the darker side of that period is not to deny the achievements of infrastructure projects; it is simply to avoid drawing too tidy a lesson from a complex era. Likewise, citing a historical quote about “prosperous American workers” does not establish that early capitalism naturally tended toward worker-centered policy. Those high wages were the result of unique conditions—vast land, labor scarcity, immigration, and political battles—not evidence that capitalism inherently evolves toward benign outcomes.
Your distinction between “productive” and “parasitic” activities deserves more careful treatment as well. It is true that some forms of financial behavior—predatory lending, manipulative corporate takeovers, regulatory arbitrage—can be harmful. Yet it does not logically follow that all returns on capital, patents, rents, or financial services are parasitic. Financial markets exist because they enable investment, risk-sharing, credit access, innovation, and entrepreneurship at scales that would otherwise be impossible. Money does not appear “in someone’s sleep”; it flows because someone else needed capital, insurance, liquidity, or infrastructure. If the objective is to curb abusive practices, targeted regulation, antitrust enforcement, and better transparency are far more realistic solutions than labeling entire categories of economic activity as illegitimate.
Your policy proposals—progressive taxation, inheritance taxation, and greater limits on financial rents—are legitimate topics for democratic debate, but they should be justified on pragmatic grounds rather than framed as moral crusades against “parasites.” Societies function best when they avoid reducing complex economic ecosystems to a struggle between virtuous workers and villainous owners. In practice, productive economies contain a mix of labor, capital, and entrepreneurial risk-taking, and excess concentration of power can occur in either the private sector or the state. Maintaining balance—rather than abolishing one side—is precisely what keeps freedom and prosperity alive.
Finally, your insistence that differing views on China must come from “malign propaganda” is unfair. Reasonable people can criticize China’s political system based on well-documented evidence: constraints on press, lack of competitive elections, detention of dissenters, and tight Party control over courts and civil society. These facts can coexist with admiration for China’s success in poverty reduction, infrastructure growth, or manufacturing efficiency. To claim that China is “the best hope for humanity,” while dismissing all critique as ignorance, substitutes ideology for evidence. No nation—China, the U.S., or any other—should be placed beyond critical scrutiny.
In short, we can debate taxation, capitalism, financial reform, and China’s development without resorting to caricatures of opponents or sweeping moral judgments about entire classes of people. Constructive dialogue requires acknowledging complexity, not dividing the world into heroes and parasites.
Please! Do you think I am ignorant of the class war and labor exploitation? Next, you fall into the American economic heresy of claiming that all income is earned income. This is precisely the fault of the current tax system and the reason for such vast inequality we now have. Your opinion of capitalism is just that, an opinion crafted from years of propaganda. There are lots of ways that societies have formed capital accumulation and developed their societies in history, and the one we have now is the worst because of exploitation and alienation.
If you think for one minute that you possess an accurate vision of China and her economy, I will sell you a nice bridge in New York. There are a few activists and scholars in the US who do know, such as Michael Hudson and Carlos Martinez, both of whom are Marxists who have spent time in China. Any other perspective or opinion is tainted either by anti-communism or Sinophobia. If you read anything else, it will be wrong on its face because of the prejudices of the author.
We can start our dialog at any level, but you who want to deflect from basic defects, who are not willing to 'see things as they are' have little to bring to a discussion. In short, the base discussion involves the choice between socialism and barbarism—Rosa Luxembourg.
Thanks, Mr Bruce. I love reading your essays and I adore Ms Mingo!
There's an under reported provision in the new Government bill, with the nickname "Hemp Ban", which puts a big question mark on the future of the $126B cannabis business. The ban doesn't take effect until Nov 2026. So, for the next 10 months the cannabis lobbyists can feather the nests of the lawmakers to get an amendment passed. Once again, congress members will get rich on the backs of those who rely on THC for medical conditions.
Thanks much for the news and stats. With that infomation it boggles my mind why people in Florida still support Trump? Or maybe they dont blame him for it? It was Bidens fault still? Or that Trump is one of them? (smile). Maybe those people on SNAP dont vote?? Maybe those are the ones who DID VOTE for the democrats. Or that being "woke" is more of a fear for Floridians than that everyone has enough food?