Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
FT: Wiping the slate clean: is it time to reconsider debt forgiveness?
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University
Wiping the slate clean: is it time to reconsider debt forgiveness?
ReplyDeleteThe slate will eventually be wiped clean through societal breakdown, or through a cataclysm such as a major war.
FT is usually worthless, but they occasionally wander off the neoliberal reservation, as we see here.
“The Bronze Age (about 2,500BC) in ancient Sumer, Mesopotamia and Babylon is not well known to most people since about the only things that have survived are ruins and tablets with cuneiform script.”
And at least 80% of the cuneiform concerned monetary accounts “Elam owes Hakkam two cows in return for six pigs.” This was accounting, not barter. The Neolithic Tărtăria tablets were the same, as was pre-dynastic Egyptian script (not to be confused with hieroglyphs). The earliest Egyptian script was developed before Sumerian cuneiform, and was found in a tomb at Abydos, one of the oldest cities of ancient Egypt. Again, it was basically accounting entries.
“Hudson says ‘liberty’ refers not only to the abstract idea of freedom but to debt forgiveness.”
The concept of debt forgiveness runs deep in the human psyche. It ties into concepts of guilt, karma, and spiritual bondage.
“Debt jubilees created a safety valve: whenever debt exploded to a point that inequality was creating crushing tensions and harming productivity, the emperor would act. This practice did not extend to business-to-business debts — it only affected agrarian debts owed to temples (i.e. the state). ”
This may not be possible today, since private for-profit banks have so much power. And the peasants have been programmed to worship their slavery, and to worship their owners / creditors. When an individual is ruined by debt, it is like a traffic accident on the freeway. The other cattle slowly file by, grateful that they themselves were spared. Grateful that the lion ate someone else today, instead of me.
“Our modern political economy is shaped by ideas absorbed from Roman and Greek law, and the Romans took a different approach to the Babylonians, choosing to uphold creditor and property rights at almost any cost.”
That’s why they went extinct. By contrast, Sumer went extinct because of a prolonged drought, just like the Mayans.
"I don't link to FT since it is behind a paywall.." I often find I can see FT articles from computers where the computer owner HAS NOT subscribed to the FT. I've no idea why that is, so I suggest it may be worth linking to the FT.
ReplyDeleteEven more bizarre: that trick seems to work just once per day. I.e. if I try to look at a SECOND FT article on the same day, the trick doesn't work.
1) By itself, properly de-privileging the banks would be deflationary since new bank credit creation would be unable to keep up with the repayment of existing bank credit.
ReplyDelete2) By itself, equal fiat distributions to all citizens would be inflationary.
Therefore, by combining 1) and 2) properly we can have:
a) 100% private banks with 100% voluntary depositors.
b) neither inflation nor deflation from the process.
c) debt relief for debtors without disadvantaging non-debtors.
One hand washes the other ...
This is, in essence, Steve Keen's "A Modern Jubilee."