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[This is the third of a series of essays on debt, prompted by recent revelations about how the issue was handled in ancient Mesopotamia.]
When the kings and potentates of Bronze Age Mesopotamia realized that interest-bearing debt was a cancer that would inevitably destroy first the lower classes and then the entire kingdom (or empire, or whatever form of government they were using at the time) they reacted, forcefully and logically. They cancelled all debts, periodically.
Not merely once every 49 years, as the Bible would later recommend, but every once in a while — when a new king took the throne, on an anniversary of the empire, or because it was Thursday (the seven-day week was first defined by the Babylonians). Every esoteric language used in the region for more than 2,000 years has a term for the practice, as Dr. Michael Hudson explains in his new book And Forgive Them Their Debts: Lending, Foreclosure, and Redemption from Bronze Age Finance to the Jubilee Year (ISLET 2018). As Dr. Hudson translates it, the term is “Clean Slate Amnesty.”
A Clean Slate Amnesty proclamation (of which many examples survive — one of which is reproduced in triplicate on the Rosetta Stone) cancelled all outstanding interest-bearing loans; freed from bondage all those who had been enslaved because of debt; and restored to the original owner land that had been foreclosed upon. They did this often, they did it in different times and in many different countries, whenever the cancer of debt began destroying the health of their economy. As a result, writes Dr. Hudson:
“By liberating distressed individuals who had fallen into debt bondage, and returning to cultivators the lands they had forfeited for debt or sold under economic duress, these royal acts maintained a free peasantry willing to fight for its land and work on public building projects and canals…. By clearing away the buildup of personal debts, rulers saved society from the social chaos that would have resulted from personal insolvency, debt bondage, and military defection”
The mere idea makes all of western civilization go rigid with moral indignation. It is, we have all been taught for centuries, immoral to fail to pay one’s debts, in fact it is the very definition of immorality. Which is not surprising when you realize that in many languages, the word for “debt” and the word for “sin” is the same word.
The rulers of Mesopotamia, on the other hand, regarded it as immoral to allow people who preyed upon the least fortunate of the people to destroy not only the poor people but the country. They apparently thought it immoral to make a loan that the borrower clearly would not be able to repay, so that the lender could foreclose on him and his land and his family. It was immoral, they thought, to allow an ever-widening wedge to be driven between the wealthy lenders and the poor borrowers, until the deprived borrowers had nothing left to do but emigrate, revolt or die.
The wisdom of the Bronze Age in Mesopotamia was to treat debt as if it were a tumor, to be surgically removed whenever it got too big, for the good of the body politic. It is a point of view, and a course of action, so utterly at odds with the conventional wisdom of many generations, that we almost can’t conceive of it. The practice was unknown to the foundational philosophers of our time, from Karl Marx to Adam Smith to the founders of the American Republic. (As far as I can tell, the seldom observed Jubilee discussed in the Bible (Leviticus) and in Hebrew tradition is not the same thing as Clean Slate Amnesties.) It never occurred to them as an option, and so it never occurs to us.
For the same reason, it seems, that we can’t conceive of butter being better for us than margarine: because we are victims of a long and successful PR campaign by greedy, ruthless people. By about 1,000 BCE, wealthy lenders had apparently learned how to reach out and touch political decision-makers, with the result that by the time of the rise of the Greek city-states and the Roman Empire, after 800 BCE, Clean-Slate proclamations were ever more rare, interest-bearing loans became more permanent, and their repayment became a sacred obligation not to be forgiven by anybody.
It was a PR campaign to make Big Tobacco’s look like a trivial flash in the pan by comparison. More about that next time in “The Things that You’re Liable to Read in the Bible.”
When I declared personal bankruptcy back in 1988 (several years after my corporation did the same) my lawyer explained that bankruptcy was nothing to be ashamed of; the Constitution gives Congress the right to regulate such proceedings. Within a few years I was back in business, though it took half a decade to restore my credit. In any event, I’ve been productive and solvent since that day. I’m in favor of enforced debt forgiveness. Without it, capitalism wouldn’t work; few would have the courage to raise capital. Without bankruptcy protection, only the young and unwary would borrow money…like, say, teens about to enter college.
Even so, I’m not so sure how jubilee – a sweeping elimination of debt – would work in a huge (and hugely complex) society. On a smaller scale maybe. Gilgamesh’s city of Uruk had approximately 50,000 people in its environs. Ten blocks north of my house there’s a university football stadium that alone holds twice that number. I’m thinking chaos – uncontrollable, unseen variables. I’ll need to get a sense of the nuts and bolts of any jubilee plan.
Man, what a truly historical opportunity Barrack Obama had in 2008. When he took power, the money changers tables were already smashed to pieces, no physical exertion in the Temple required.
And unlike Jesus, who had 12 bedraggled followers whose loyalty was always in question, Barrack Obama had the House, the Senate, and the full backing of the United States military!
Ok, maybe not the “full backing.”
Oh well, there is one more chance. Both Warren and Sanders have MMT people in their camps. In fact, I can one day see Michael MMT Hudson being our Secretary of the Federal Treasury Reserve.
We roll up the Fed and money creation under the auspices of the nation-state, where they belong, we create debt jubilees for the for the many (but not the few!), we get rid of the Senate, the Supreme Court, and the electoral college, and we are on our way towards democracy!
In order for any such plan to be feasible, you first need a reliable source of incorruptible, unselfish rulers(or lawmakers, in the case of a central government). The biblical jubilee assumed such a source of wisdom and morality. You are dreaming if you think such a condition might arise in today’s social and political climate.
First, come up with suggestions on how to reinstall the moral code that apparently existed at that time in history.
And that’s the whole trouble with the modern world: we’ve disavowed so much of the traditional wisdom of our forefathers, viewing it all as outdated superstition and throwing out the baby with the bathwater.
Many if not most premodern societies and cultures actually viewed moneylending with deep suspicion if not outright condemnation. And they had a traditional body of beliefs to serve as a basis for their views and concerns. But with the advent of the Industrial Revolution and the ‘discovery’ of the ‘New’ World, people were led to believe that all such ideas and beliefs are outdated because our resources are actually infinite (yeah, right), so we don’t need any cultural, moral, religious or social restraints on the pursuit of material wealth, because there’s more than enough for everyone — indeed it’s even considered wrong if not barbaric for a society to impose any such restraints on its members. Add to that the appearance of a bunch of rapacious bankers in the West (can you spell ‘Rothschild’?), and the stage is set for the whole sorry state of world affairs rolling on right down to the present day.
We’ve collectively ended up in our current plight largely because of a tragic delusion on the nature of reality.
My issue with a possible debt jubilee is that it gives the impression of rewarding the most profligate individuals while leaving responsible folks in the lurch. I also can’t quite envision how citizen vs. corporate jubilees would work. Considering how righteously awful the bank bailouts were in 2008 or so, I’d also like to see insolvency and mismanagement have some real repercussions.
Good points all, Brutus, but where in the name of justice, mercy and love are all the reformers coming from required to resurrect the ship of state? With a whole regiment of cavalry of white knights it might have been done if it had begun decades ago, but not now!
For all practical purposes, we are the Titanic. One exception; there weren’t any lifeboats. The entirety of the human enterprise must reset and begin again. This subject is a non-issue.
I agree totally with the comments. But, at some point, we need to make a start. There are some measures that can be taken short of jubilee:
(1). Make student loans subject to conventional bankruptcy laws, and eliminate government backing for same. This will introduce competition into the process. Lending standards will be tightened, and, as a result, colleges will have to pare unneeded costs. Driving Ubers and delivering pizzas will be relegated to workers lacking master’s degrees in philosophy or gender studies.
(2). Let the empire collapse; the Russians aren’t coming. Defense spending can be used for just that purpose – defense – and nothing more! The money saved can be split: half going to the deficit and half going to environmental projects…Fuck infrastructure spending for the present – the infrastructure ain’t that bad.
(3). Institute single-payer health care based on the Medicare model at best; the pre-Nixon not-for-profit system at worst.
(4). Return to pre-Reagan tax brackets and percentages. The rich will still be rich.
(5). Outlaw lobbying of every sort. Executive and congressional staffs have accesss to all the information they need in order to deliver informed policy in any area. There may or may not be Constitutional problems here, but the amendment process is always available.
(6). Make Mexico pay for the Wall in advance…Then don’t build it!
It’s a start.
What? How is any of this going to get done, with the exception of #3? (by default). All of the suggestions assume some established method of accomplishing these objectives.
Face it; it’s all broken, and all we have left is to face the consequences of the whirlwind we have created. Has everyone lost their ability to see the reality of the situation?
Acceptance with personal dignity is all that remains to us. Perhaps we or someone we know can rebuild from the ashes, but we will have to start from scratch. Enough of this nonsense about fixing the existing arrangement. It cannot be done.
Except for #6, it’s all at least theoretically possible. If we had industrious, honest representatives and, and a smart, forward-looking President, we…well, OK, it’s a big ‘IF’. What I’m saying is that the way is there – just not the will.
True. The only ones among us with the will to do something are the most aggressive and unscrupulous. They do not differ from the rest of the species except in degree. The average man would be satisfied with a proportionate piece of the pie, but he is not motivated to fight tooth and nail every day for a bit more. He would like to be left alone with his share, but there are unfortunately those who would enslave him in order to gain ascendancy.
As long as there was a physical frontier where the independent, non-aggressive man could escape, there was hope. Now, there is no place to expand; we have become too numerous and too dominant for all the rest of life on earth. Our numbers must be reduced drastically if there be any hope for anyone or any other species. The leaders of the NWO have come to that conclusion. If they manage to proceed with their plan, they may enjoy some success, who knows. If they do not succeed, mankind is doomed anyway.
Correction to my above comment: exception should refer to #2.