The Delphic Oracle Was Their Davos: A Four-Part Interview With Michael Hudson About His Forthcoming Book The Collapse of Antiquity (Part 1)

Yves here. Classicist John Siman and Michael Hudson got to know each other at NC meetup last year, which led to the series of conversations that is codified in this series. Here, Hudson describes in antiquity, how oligarchs in Greece and Rome ended the practice of debt jubilees and became rentiers.

By John Siman

Note: Michael Hudson published … and forgive them their debts: Lending, Foreclosure, and Redemption From Bronze Age Finance to the Jubilee Year in November of last year. It is the first volume in what will be a trilogy on the long history of the tyranny of debt. I have interviewed him extensively as he writes the second volume, The Collapse of Antiquity.

John Siman: Michael, inthe first volume of your history of debt — “

and forgive them their debts, dealing with the Bronze Age Near East, Judaism and early Christianity — you showed how over thousands of years, going back to the invention of interest-bearing loans in Mesopotamia in the third millennium BC, many kings from a variety of Mesopotamian civilizations proclaimed Clean Slate debt cancellations on a more or less regular basis. And you showed that these royal proclamations of debt amnesty rescued the lower classes from debt bondage, maintaining a workable economic balance over many centuries. Because these kings were so powerful — and, let’s say, enlightened — they were able to prevent the social and economic polarization that is inevitable when there is no check on an oligarchic creditor class extracting exponentially increasing interest from debtors.

But now, as you write the second volume, your theme gets turned upside down. You are showing how the Greeks and the Romans learned about interest-bearing debt from their contacts with Middle Eastern civilizations, but tragically failed to institute programs of Clean Slate debt amnesty. Their failure has been a kind of albatross around the neck of Western economies ever since.

So I’d like to start this conversation in the late 500s BC, because we can see at that time the beginnings of both the Athenian democracy and the Roman Republic, plus of two more important civilizations. First was the Athens of Cleisthenes, who had led the overthrow the “tyrant” Hippias and became the father of Athenian democracy. Second, there was the Roman Republic of Lucius Junius Brutus, who overthrew the last of Rome’s legendary kings, the “tyrant” Tarquinius Superbus.Third was the Persian civilization of Cyrus the Great. He was a “divine king,” in many ways in the ancient tradition of Hammurabi. Fourth were the post-exilic Jews of Ezra and Nehemiah, who returned to Jerusalem, rebuilt the Temple and redacted the Bible. They were the inventors of the Jubilee years of Clean Slate debt forgiveness, even though they depicted the teaching as coming from Moses.

So, beginning with the late 500s BC, to what extent was the notion of Clean Slate debt amnesty remembered, and to what extent was it rejected?

Michael Hudson: Every kind of reform, from Mesopotamia to Greece, was put forth as if it simply restored the way things were in the beginning. There was no concept of linear progress in Antiquity. They thought that there was only one way to do things, so any reform must be the way the world was meant to be in the very beginning. All reformers would say that in the beginning everybody must have been equal. Their reform was aimed at restoring this state of affairs.

That’s why, when Plutarch and even the Spartan kings in the third century BC  talked about canceling debts and promoting equality, they said that they were simply restoring the original system that Lycurgus had created. But there was no sign that Lycurgus had really done these things. It was made up. Lycurgus was a legendary figure. So was Moses in the Jewish tradition. When the Bible was redacted and put together after the return from Babylon, they put debt cancellation and land redistribution —the Jubilee Year — right in the center of Mosaic Law. So it seemed that this was not an innovation, but what Moses said in the beginning. They created a Moses figure much like the Greeks created a Lycurgus figure. They said that this is how things were meant to be. This is how it was in the beginning — and it just happened to be their own program.

 This was a projection backwards: a retrojection. Felix Jacoby wrote that Athenian history was that way, basically party pamphleteering projecting their ideal program back to Solon or to whomever one might choose as a good guy to model. Writers would then say that this original good guy supported the program that they were proposing in their epoch. This was the ancient analogy to “Constitutional Originalism” in the United States as a frame for right-wing policies.

JS: So, ever since the 500s BC, the surefire way to critique the status quo has been to say you are trying to go back to the Garden of Eden or to some other pristine Saturnian Golden Age.

MH: Yes, you want to say that the unfair world around you isn’t what was meant, so this couldn’t have been the original plan, because the past had to be a successful takeoff. So the program that reformers always turned out to be what the Founding Fathers meant.

JS: That’s veryinspirational!

MH: The key is to appear as a conservative, not a radical. You accuse the existing status quo as being the beneficiaries of the radicals who have distorted the original Fair Plan that you’re trying to restore.

JS: So in the 500s BC we have Cyrus — and his inscription on the Cyrus Cylinder — boasting that he freed the Babylonians from their tax debt and bonds, and we have the post-exilic Jews proclaiming d’ror [דְּרֹ֛ור] in Leviticus 25, proclaiming “liberty throughout the land.” We also have the reforms of Cleisthenes in Athens, isonomia [ἰσονομία, literally, equality under the law], a genuine attempt at democracy. But let’s start with Rome. What do you want to say about the nova libertas, the “new liberty” proclaimed in Rome after the last king was expelled and the Republic was founded? Didn’t Brutus and his wellborn friends boast that they were the institutors of true liberty?

MH: Liberty for them was the liberty to destroy that of the population at large. Instead of cancelling debts and restoring land tenure to the population, the oligarchy created the Senate that protected the right of creditors to enslave labor and seize public as well as private lands (just as had occurred in Athens before Solon). Instead of restoring a status quo ante of free cultivators — free of debt and tax obligations, as Sumerian amargi and Babylonian misharumand andurarum meant — the Roman oligarchy accused anyone of supporting debtor rights and opposing its land grabs of “seeking kingship.” Such men were murdered, century after century.

Rome was turned into an oligarchy, an autocracy of the senatorial families. Their “liberty” was an early example of Orwellian Doublethink. It was to destroy everybody else’s liberty so they could grab whatever they could, enslave the debtors and create the polarized society that Rome became.

JS: OK, but this program worked. The Republic grew and grew and conquered everyone else for century after century. Then the Principate became the supreme power in the Western world for several more centuries.

MH: It worked by looting and stripping other societies. That can only continue as long as there is some society to loot and destroy. Once there were no more kingdoms for Rome to destroy, it collapsed from within. It was basically a looting economy. And it didn’t do more than the British colonialists did: It only scratched the surface. It didn’t put in place the means of production that would create enough money for them to grow productively. Essentially, Rome was a financial rentier state.

Rentiers don’t create production. They live off existing production, they don’t create it. That’s why the classical economists said they were supporting industrial capitalists, not British landlords, not monopolists and not predatory banks.

JS: This has all been forgotten, both in the United States and in England —

MH: Let’s say, expurgated from the curriculum.

JS: Worse than forgotten!

MH: That’s why you don’t have any history of economic thought taught anymore in the United States. Because then you’d see that Adam Smith, John Stuart Mill and the “Ricardian socialists” and indeed most of the 19th century had a completely opposite idea of what constituted a free market.

JS: Opposite? How so?

MH: Opposite from the neoliberal idea that freedom means freedom for the wealthy to indebt and destroy the economy. Opposite from the liberty of Brutus to overthrow the Roman kings and establish an autocratic oligarchy.

JS: So do we want to see the Roman kings as defenders of the people — defending them from predatory oligarchs?

MH: Yes, especially Servius Tullius. There was a great flowering of Rome, making it attractive to immigrants by making the city livable for newcomers. They did this because at that time, in the 6th century BC, all societies had a shortage of labor. Labor was the factor of production in short supply, not land. Not even in Athens was land in short supply in the 6th and 5th centuries. You needed labor, and so you had to make it attractive for immigrants to join your society instead of having your people run away, as they would in a society run by creditors reducing clients to bondage.

JS:  So you are writing about how Roman liberty was actually the liberty of oligarchic creditors frompopulist pressures for debt forgiveness. What of the d’ror of Leviticus 25 — the liberty of the postexilic Jews? Did they actually proclaim years of Jubilee in which debts were forgiven and bondservants were returned to their families?

MH: After the Babylonian Jews returned to Jerusalem, I’m sure that they said that it was time for the land to be returned to its original owners — and their families, by the way, were the original owners who were exiled in the Babylonian Captivity. I rely largely on Baruch Levine for this idea of the ge’ullah [גְּאֻלָּה], saying give us back our ancestral lands. [See thecolloquium Levine and Hudson co-edited on Land and Urbanization in the Ancient Near East, and their preceding volume on ancient privatization.] There must have been some kind of settlement along those lines. Unfortunately, the Judaic lands did not keep their records on on clay tablets that could be thrown out and recovered thousands of years later. We don’t have any record of their economic history after the Return.

JS: Now I’ve brought along the transcriptions of several Egyptian papyri for you to look at. I also want to show you a papyrus in Aramaic from Judæa. It’s not direct evidence that the post-exilic Jews were having Jubilee years, but it’s indirect evidence, because it says that a particular debt has to be paid, even during a time of general debt amnesty, even if it falls due in a shmita  [שמיטה], a sabbath year. So  it sounds like the Jews were finding loopholes —

MH: It certainly sounds like it! Babylonian creditors tried a similar ploy, but this was disallowed. (We have court records confirming the realm’s misharumacts.)

JS: In the Mosaic commandments to forgive debt, can we infer that there was some sort of program of debt forgiveness in place already in place in postexilic Jerusalem?

MH: Yes, but it ended with Rabbi Hillel and the Prozbul clause. Debtors had to sign this clause at the end of their debt contracts saying that they waived their rights under the Jubilee year in order to get a loan. That was why Jesus fought against the Pharisees and the rabbinical leadership. That’s what Luke 4 is all about [And there was delivered unto him the book of the prophet Isaiah. And when he had opened the book, he found the place where it was written, “The Spirit of the Lord is upon me, because he hath anointed me to preach the gospel to the poor; he hath sent me to heal the brokenhearted, to preach deliverance to the captives, and recovering of sight to the blind, to set at liberty them that are bruised, to preach the acceptable year of the Lord”= the Jubilee year.] Luke also pointed out that the Pharisees loved money!

JS: Let me ask you about Egypt here. Unfortunately, as you said, the postexilic Jews did not leave us any clay tablets and almost no papyri, but we do have loads of papyri concerning the Ptolemaic kings of Egypt. So from, say, 300 B.C. to the death of Cleopatra, we have official evidence that the Egyptian kings proclaimed debt amnesties. Maybe one of the reasons, or perhaps the main reason for this, is because they were so powerful, like the Mesopotamian kings. So even though the Ptolemaic kings were biologically and genetically Macedonian Greek — married to their sisters, too — they aspired to rule in the ancient Egyptian pharaonic tradition of We Are God-Kings and We Own Everything in the Kingdom.

MH: Certainly the Hellenistic kings had the ancient pharaonic Sed festivals, which go back thousands of years and were a kind of jubilee. The Egyptians had regular debt cancellations, because under the pharaohs the debts that would have been cancelled were basically tax debts. They were owed to the crown, so he was cancelling debts owed to himself ultimately. And we see this thousands of years later in the trilingual stone, the Rosetta Stone, which the priests wrote for that young boy who was Ptolemy V. They explained to him that this is how Egypt always had done it, and to act as a pharaoh, he had to do the same.

JS: And I think it is worth pointing out here that the same verb-plus-noun combination for forgiving debts that the priests used in Greek on the Rosetta Stone is also used by Matthew in the Lord’s Prayer [ἀφῆκεν/ἄφες ὀφειλήματα, aphēken/aphes opheilēmata]. It shows up in lots of papyri. The same Greek verb and noun, again and again and again.

But let’s go back to the Greeks of the 500s BC. They are a couple of hundred years out of their Dark Age, so their society has been reconstituted after the demographic wipeout. It’s been reconstituted, but without Near Eastern-style “divine kingship” and its Clean Slate proclamations. Just the opposite. Socrates had conversations with the rhapsodes who had memorized and recited the Iliad. Even in their great epic, the Greeks’ legendary king of kings Agamemnon comes across as a kind of narcissistic loser. How would you describe Greek kingship, especially the so-called tyrants?

MH: There never really were Greek kings of the type found throughout the Bronze Age Near East and surviving into the first millennium in Assyria and even in Persia. The Greek polities that emerged from their Dark Age were run by what shrewd Classicists call mafiosi, something like the post-Soviet kleptocrats. They formed closed political monopolies reducing local populations to clientage and dependency. In one polity after another they were overthrown and exiled, mainly by aristocratic reformers from the elite families (often secondary branches, as was Solon). Later oligarchic writers called them “tyrants” as an invective, much as the word rex— king —became an invective in oligarchic Rome.

These tyrant-reformers consolidated their power by redistributing land from the leading families (or in Sparta, land conquered from Messenia, along with its population reduced to helotage) to the citizen-army at large all over Greece – except in Athens. That was one of the most reactionary cities in the 7th century, as shown by what is known about the laws of Draco. After some abortive coups in the seventh century, Solon was appointed in 594 to avoid the kind of revolution that had led reformer “tyrants” to overthrow narrow aristocracies in neighboring Megara and Corinth. Solon decreed a half-way reform, abolishing debt slavery (but not the debtor’s obligation to work off debts with his own labor), and did not redistribute Athenian land from the city’s elites.

Athens was one of the last to reform but then because it was such a badly polarized autocratic society, it swung — like Newton’s Third Law of Motion: every action has an equal and opposite reaction — it swung to become the most democratic of all the Greek polities.

Some historians in the past speculated that Solon might somehow have been influenced by Judaic law or other Near Eastern practice, but this is not realistic. I think Solon was simply a pragmatist responding to widespread demands that he do what the reformers — the so-called tyrants — were doing throughout Greece. He didn’t redistribute the land like they did, but he at least ended outright debt slavery. Free debtors (mainly cultivators on the land) were being seized and sold outside of Athens to slave dealers. Solon also tried to recover some of the land that wealthy families had grabbed. At least, that’s what he wrote in his poems describing his actions.

So to answer your question, I think debt cancellations were not a diffusionist policy from the East, but a spontaneous pragmatic response such as was being widely advocated as far west as Rome with its Secession of the Plebs a century later — followed by much of Greece in the 4th century BC, and Sparta’s kings in the late 3rd century BC.

Poorer Athenians were so angry with Solon for being not revolutionary enough that he went into exile for 10 years. The real creators of Athenian democracy were Peisistratos [died 528/7 BC], his sons, also called tyrants, and then Cleisthenes in 507. He was a member of the wealthy but outcast family, the Alcmaeonidae, who had been expelled in the 7th century. Solon had allowed them to return, and they were backed by Delphi (to which the family contributed heavily). Cleisthenes fought against the other oligarchic families and restructured Athenian politics on the basis of locality instead of clan membership. Servius Tullius is credited for enacting much the same reform in Rome. Lewis Henry Morgan’s Ancient Society [1877] described this restructuring of voting districts as the great watershed creation of western-style democracy.

JS: Let me go back now to the way Athens and the other poleis emerged from the Dark Age.

MH: Judging from the art and pottery, Greece didn’t begin to recover until the 8th century BC.

JS: So we’re talking about the 700s BC. As Greece was learning from the Near Eastern  civilizations, everything from mythology to the alphabet to weights and measures —

MH:  And commercial practices, credit practices.

JS: Yes, all this came from the Near East, including the practice of charging interest. But what about Clean Slate debt amnesty? I want to argue logically here — not from any hard historical evidence, but only deductively — that the Greeks would have wanted the concept of Clean Slate debt forgiveness, they would have wanted to learn this too from the Near East, but they could not do it because they were always going to lack a Hammurabi-style “divine king.”

MH: I think you miss the whole point of how Western civilization evolved here. First of all, who “wanted” Near Eastern kingship? Certainly not the emerging oligarchies. The ruling elites wanted to use interest-bearing debt to enrich themselves – by obtaining control over the labor power of debtors.

Second, I don’t think the Greeks and Italians knew about Near Eastern royal proclamations, except as an alien practice much further East than Asia Minor. Falling into debt was a disaster for the poor, but a means for their Western patrons to gain power, land and wealth. There is no record of anyone suggesting that they should be in the Near East. The connection between the Near East and Greece or Italy was via traders. If you’re a Phoenician or Syrian merchant with the Aegean or Italy, you’re going to set up a temple as an intermediary, typically on an island. Such temples became the cosmopolitan meeting places where you had the oligarchs of the leading families of Greek cities visiting each other as part of a Pan-Hellenic group. You could say that Delphi was the “Davos” of its day.

It was through these trading centers that culture diffused – via the wealthiest families who travelled and established relationships with other leading families. Finance and trade have always been cosmopolitan. These families learned about debt obligations and contracts from the Near East, and ended up reducing much of their local populations to clientage, without kings to overrule them. That would have been the last thing they wanted.

JS: So absent Hammurabi-style “divine kingship,” is debt bondage and brutal polarization almost inevitably going to happen in any society that adopts interest-bearing debt?

MH: We see a balance of forces in the ancient Near East, thanks to the fact that its rulers had authority to cancel debt and restore land that wealthy individuals had taken from smallholders. These kings were powerful enough to prevent the rise of oligarchies that would reduce the population to debt peonage and bondage (and in the process, deprive the palace of revenue and corvée labor, and even the military service of debtors owing their labor to their private creditors). We don’t have any similar protection in today’s Western Civilization. That’s what separates Western Civilization from the earlier Near Eastern stage. Modern financialized civilization has stripped away the power to prevent a land-grabbing creditor oligarchy from controlling society and its laws.

So you could characterize Western Civilization is being decadent. It’s reducing populations to austerity on a road to debt peonage. Today’s new oligarchy calls this a “free market,” but it is the opposite of freedom. You can think of the Greek and Roman decontextualization of Near Eastern economic regulations as if the IMF had been put in charge of Greece and Rome, poisoning its legal and political philosophy at the outset. So Western Civilization may be just a vast detour. That’s what my forthcoming book, The Collapse of Antiquity, is all about. That will be the second volume in my trilogy on the history of debt.

JS: So are we just a vast detour?

MH: We have to restore a balanced economy where the oligarchy is controlled, so as to prevent the financial sector from impoverishing society, imposing austerity and reducing the population to clientage and debt serfdom.

JS: How do you do that without a Hammurabi-style “divine kingship”?

MH: You need civil law to do what Near Eastern kings once did. You need a body of civil law with a strong democratic government acting to shape markets in society’s overall long-term interest, not that of the One Percent obtaining wealth by impoverishing the 99 Percent. You need civil law that protects the population from an oligarchy whose business plan is to accumulate wealth in ways that impoverish the economy at large. This requires a body of civil law that would cancel debts when they grow too large for the population to pay. That probably requires public banking and credit – in other words, deprivatization of banking that has become dysfunctional.

All this requires a mixed economy, such as the Bronze Age Near Eastern economies were. The palace, temples, private sector and entrepreneurs acted as checks and balances on each other. Western Civilization isn’t a mixed economy. Socialism was an attempt to create a mixed economy, but the oligarchs fought back. What they call a “free market” is an unmixed monolithic, centrally planned financialized economy with freedom for the oligarchy to impoverish the rest of society. That was achieved by landlordism monopolizing the land in feudal Europe, and it is done by finance today.

end of part 1

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  1. Alex

    Thank you for publishing this, I’ve enjoyed Forgive them their debts and will be waiting for the next book!

    If I may suggest something, it would be interesting to compare the effects and inner workings of the clean slates of the Ancient Middle East and the modern bankruptcy law, which is the closest thing we have now (in spite of all its drawbacks).

    1. vidimi

      i wish the book had better editing, but the information it contains is priceless.

      looking forward to the rest of the trilogy

  2. Synoia

    William the Badtard imposed landlordism on England, over the Sacon system which was less monopolistic on lamd ownership.

    The mevhanisms of land ownetdhip under the Saxon kings were not much taught in the History classes Itecall.

    Any recommendations for teading?

    1. Sanxi

      I’ve read several things to start try Peter Ackroyd, re: Foundation. That’s just off the top of my head. Seems the Romans at least operated with some rule of law, after that there were some equitable setups but Briton kept getting hammered by invasion after invasion with cultural reboot after reboot. King Harold tried but after William showed up, England for my money, was 700 years of misery and then you had to sail to America.

      1. LifelongLib

        My impression from Ackroyd is that throughout England’s history the nobility used the country like a giant cash machine.

        1. GF

          The PBS show “Secrets of the Dead” last week has an excellent revision of the “history” of England from the Roman departure (about 400 AD to 600 AD) with the hook being King Arthur and Tintagel in south-west England where an excavation is been done that seems to debunk the “invasion” theories of the early Dark Ages in England. Extensive excavations in eastern England (Saxon invasion territory) seems to show a slow migration and not an invasion of barbarian Saxons and a mixing of Saxon and indigenous locals in eastern England.

          It’s really quite an amazing story.

    1. Carolinian

      Hear hear. Thanks to NC for such smart contributors…not the fare you get on DailyKos!

      I do think history shouldn’t only be viewed through the lens of money or money=power, but it sure is interesting and more so than history class history that tends to be told with no lens at all other than recitation of the facts. Surely analysis is more important.

  3. Sanxi

    This has probably has been brought up before and I’d email someone at NC if I could figure how so forgive me but this really would be make for a great podcast, no?

    1. Jeremy Grimm

      All of today’s great posts and links are keeping me from trying to calculate my taxes using the new forms and guides from the IRS.

  4. Hayek's Heelbiter

    Posts like this are why I love NC! Thanks, Yves.

    Ps. I studied for many years with Bhau Kalchuri, last living disciple of the silent Indian master, Meher Baba. Bhau always got incredibly upset about any translations of the Lord’s Prayer where “debts” was translated as “sins” “or trespasses.” I could never understand why he became so indignant over a simple word change, but articles like this are making me see the light.

    From [Can’t get link to work. Sorry.]

    Aramaic version
    The Lord’s Prayer survives in the Aramaic language in the form given to it in the Syriac Peshitta version of the New Testament. In Aramaic original language there is no mention of the word trespasses or trespassed … but debts and debtors.

    et. al and other citations too numerous to mention. Emphasis mine.

    1. Synoia

      Clever editing, for the English Language version.

      What of the Latin Version? et dimitte nobis debita nostra sicut – Debts

      14th Century French version: forgeue vs oure dettes – Debts

      15th Century version: And forgyue us our trespasses – Trespasses


      But, what was the understanding of “Dettes or debita” at that time?

      1. Synoia

        Latin debita = Due and appears to be the root of “Debt.”

        French dettes = Liability, which is a long way from Trespasses.

        A Trespass is a wrong or a Tort. From the Bible dictionary: To pass over, to go beyond one’s right in place or act; to injure another; to do that which annoys or inconveniences another.

        It appears to me the good English scholars of the Elizabethan era translated the bible in both language and intent.

        I’ve always considered the Church in England to be in the peasant suppression business:

        Note: English clergy were typically younger sons of the landed gentry, and part of the establishment.

        Vicar: Stop complaining, you will get your reward in the hereafter!
        Peasant: How do you know?
        Vicar We’ve never had any complaints!.
        Peasant: Utter Nonsense
        Vicar: Heresy, off with his head.

        I believe the expression “Self licking Ice Cream Cone” may apply.

  5. Steve Ruis

    Capitalism and civilization itself have been built upon coerced labor. The idea that laborers could create a society in which that coercion is tightly controlled is still somewhat of a novelty. A few existent social democracies have shown some ability to do this but the US seems to be regressing away from this ideal. The unfortunate aspect of this situation is that the wealthy have always been few and the masses many, making it easier for them to coordinate their efforts (e.g. The Powell Memo) and amplify their wealth and power. As soon as the “many” manages to move toward a more equitable society, the “few” begin to chisel away at it moving us away. Right now the chiselers are winning.

  6. rd

    Very interesting.

    It makes it pretty clear that the recent moves to eliminate certain debts from bankruptcy eligibility (e.g. student loans) fly in the face of this historical process.

    Protection from predatory lending and allowing full bankruptcy, including student loans, without punitive repayment plans are essential requirements for us to move forward with a healthy economy.

  7. Norb

    The idea that the true radicals are the people pushing extreme inequality and endless debt slavery is a powerful one. It can’t be emphasized enough.

    Restoration and redemption must be the focus of society.

  8. The Rev Kev

    I have always thought that Hudson’s research showing that the ancient word had an inbuilt reset button for debt an interesting one. Can it be duplicated in the modern world? Over big finance’s dead body (Challenge accepted!). I suppose the touch-stone for such a measure is the simple question “Is the present economic situation sustainable?” In ancient Mesopotamia the answer was “No!” as you were removing the smaller farmers and potential soldiers from society and turning them into slaves. That would be what we would call a national security threat. Maybe even a clear and present danger as the lack of small farmers would cripple the nation internally and the lack of soldier recruit collapse the nation externally under foreign threat. Is our present system sustainable? Not a chance in hell! Using student debt in the US as an example, maybe instead of a reset from time to time, they should remove the massive debt mechanisms that were added over the past generation or two so that any debts accumulated would be relatively small and sustainable.

    1. rd

      Similar to healthcare, most of the rest of the developed world has focused on keeping colleges and universities relatively inexpensive to attend. They may be hard to get into, but they don’t bankrupt you if you do attend unlike many of the US private universities.

      The student debt problem is similar to the subprime mortgage problem where the there were too many mechanisms separating the payer and the payee from the financing, so there is moral hazard and uninformed consumers galore. Meanwhile an industrial propaganda machine kept pushing the hype that you have to buy as much college and house as you could get loans for. In the subprime mortgage debacle, homeowners lost whatever equity they had and the securitized mortgage holders lost much of that value. In student loans, the colleges get their cash on the barrel while the students can end up with a lifetime of debt servitude with no escape.

      I have been training my kids to view the entire US financial system (banks, investing, mortgages, healthcare, colleges, car dealers) as fundamentally predatory. I work with them to focus on understanding every major transaction because 90% of the opposite parties are trying to do outrageous legal or illegal things that will harm you financially. It has been proven over and over again that the the government will not protect you, with a few exceptions (NYS is pretty good with respect to insurance). We have a pretty short list of vendors and counter-parties that we view as trust-worthy and give them nearly all of our business.

      I teach them not to worry about not having a pension because many of the pension plans are likely to renege on some of their promises due to mismanagement, intentional or unintentional. 401ks, 403bs, and Roth IRAs invested in low-cost, low-turnover, diversified mutual funds are theirs and theirs alone. Social Security will likely be there down the road, but don’t count on more than 75% of the promised value.

      As a result, my kids have little to no debt and are building substantial retirement savings with low cost providers. but you have to block out nearly all of the “advice”, hype, and marketing to accomplish that.

      1. Conrad

        Sound advice that I shall try and in still in my own children. My eldest is only 8 though so I kind if suspect there will be some major changes by the time she reaches young adulthood.

    2. Michael Hudson

      haha. “Over finance’s dead body.”
      The dead bodies are its opponents, advocates for the debtors. The entire history of the Roman Republic is one long bloodbath in which pro-debtor politicians were murdered in each century. (I’ll provide a long line.)
      439: Spurius Maelius murdered.
      394: M. Manlius Capitolinus, the first patrician to act as a populist, is murdered for defending debtors by selling off public land to redeem their debts, accusing senators of embezzlement and urging them to redeem debtors.

      133-30: Rome’s domestic Social War is fought largely over the debt issue. In 133 the brothers Tiberius and Gaius Gracchus sponsor land reform (in particular to limit the extent of large estates) on the public domain. They also sponsor a general financial reform, creating a class of publicani “knights” to act as creditors and financiers, so that senators will not perform this function. Tiberius Gracchus is murdered by oligarchic senators in 133, the first tribune to be killed.

      123-121: Tiberius’s brother Gaius Gracchus and his fellow tribune, M. Fulvius Flaccus and their supporters are killed in 121 when they occupy the Aventine.
      100: The tribune L. Apuleius, supported by the consul Gaius Marius, sponsors a land-settlement reform, but the Optimates oppose it. After the leading Optimate candidate, Gaius Memmius, was beaten to death during the voting, Marius’s allies L. Appuleius Saturninus and G. Servilius Glaucia were killed, along with many of their supporters to prevent a popular revolt.

      92: After serving as legate to Q. Mucius Scaevola (consul in 95) to help clean up the predatory behavior of publicani and moneylenders in Asia, the equites fight back by putting P. Rutilius Rufus on trial for extortion in a notorious travesty of justice. He chose exile from Rome, settling in Smyrna until his death after 78.

      89: The praetor Asellio is murdered for sponsoring restoration of the XII Tables law punishing creditors fourfold for charging excessive interest (over 81/3%). In the ensuing riots, debtors agitate for “new account books,” that is, a Clean Slate debt cancellation.

      88: The Vespers of Ephesus: As many as 80,000 Romans are killed in Asia Minor in retaliation against Roman tax farming and moneylending. During 88-84 Mithridates of Pontus turns what had began as a local war in 92 into a region-wide war by Asia Minor against Rome.

      And so on ending with Julius Caesar

      1. hemeantwell

        As a side note, consider the original meaning of “tribune of the people.” According to Brunt’s “Social Conflicts in the Roman Republic,” “the original function of the tribunes was to protect humble Romans against oppression by the magistrates; they did so by literally stepping between them and their intended victims (intercessio). The magistrates did not dare touch their persons, which were ‘sacrosanct;’ that meant that the whole plebs were sworn to avenge them by lynching whoever laid hands on them.” But their power was confined to the city; outside the walls, magistrates held sway.

      2. vidimi

        After reading your book, I came away with the impression that a death-by-oligarchy is a mathematical inevitability of civilisation. I don’t know if that was intended, or even if you share that opinion.

        The final chapters on Byzantium were especially illustrative, in that they are the best documented by contemporaries and represent an already mature society. Some of the earlier Babylonian kings were dealing with some problems for perhaps the first time in human history but the Byzantine were, in the grand scheme of things, much closer to our society. Basically, in order for the civilisation to keep going, you need to have an unbroken succession of good kings. All it took was one bad one to do irreversible damage and send the culture into decline. Ruin theory suggests similar results. Often times, civilisational ruin would be accelerated by a natural event, usually a volcanic eruption (eg c 1600BC or 1257AD), but even then death came by constriction as the oligarchy would refuse to give up even a little bit, forcing collapse.

        This brings us to today. We suffer a very advanced stage oligarchical cancer and even removing it could be fatal to the host. In theory, we have a democracy but, in practice, it’s an aristocracy holding up a presiding roi féniant, so not all that different from terminal Byzantium. We have politicians with good intentions, but the system is set up such that they can never have the power to change anything. Do we have any right to expect things to get better or should we just enjoy the strawberries?

        Another interesting thing was that most of the historical leaders we are taught to think of as great, were great conquerors, and your book, and David Graeber’s as well, show that conquest is usually fuelled by a need to service debt and a concentration of land. It’s no surprise, then, that these great conquerors often led their states to ruinous collapse through debt and internal conflict. Think Qin-Shi-Huang, Alexander the Great, etc.

  9. Summer

    And if one society had economic practices and beliefs that another wanted to demonize without having to discuss those practices and beliefs (which their own population might have found attrative)…the demonizing society would find other attributes of those others to rant about.
    Over time, those divisions could be seen as “natural.”

  10. Chauncey Gardiner

    A debt jubilee is a constructive idea, particularly if it is selective WRT student debts which are not presently legally dischargeable in bankruptcy, various types of usurious predatory consumer debt, and loans to small farmers who are being subjected to extreme financial pressure from climate change, low agricultural commodity prices, and rising prices of energy and equipment. However, I am not quite so excited by the prospect of a debt jubilee for those debts where proceeds have been used primarily for financial speculations rather than productive purposes, to enrich the one percent, and to pump up market prices; particularly debt used to fund corporate stock buybacks, private equity and acquisition LBOs, and various forms of margin debt. Further, it seems to me that there is an issue of potentially putting the nation’s debt-based monetary system and the payments system at risk, and if and how private debts would be replaced with sovereign currency to prevent that outcome (perhaps the related reduced control over labor is another reason oligarchs dislike MMT?). I also question to what extent these issues could be addressed through revisions in the bankruptcy code?

    1. Susan the other`

      Good point CG. Like today’s post about the World Bank’s new scheme to “crowd-in” private finance” to do global infra and social development by requiring sovereign money (which they understand is always there in a pinch) to securitize a new green-social bond market for PPPs and etc. It’s almost as if the private financiers have suddenly realized that they can’t skim profits out of society any other way – they’ve finally exhausted all their chances for profit. Now all that’s left is outright appropriation of sovereignty. This is the opposite of what Hudson is recommending above, a diverse economy… this is an attempt to set up private privateers to control it all. Sovereign control of spending can create diversity much more effectively than privateers.

      1. barefoot charley

        Worth noting here, “Forgive us our Debts” emphasizes that ancient debt jubilees applied to private (personal) debt, *not* to business commitments. Financialization wouldn’t get bailouts from Hammurabi!

  11. Stratos

    “MH: We have to restore a balanced economy where the oligarchy is controlled, so as to prevent the financial sector from impoverishing society, imposing austerity and reducing the population to clientage and debt serfdom.”

    The systems modern oligarchs have set up have far more serious outcomes than anything the Ancients constructed. The policies of modern oligarchs are leading to environmental ruin and species extinction——–including (possibly) our own species.

    1. Summer

      The environmental ruin was more localized to heavily populated areas.
      Anytime a large group of thousands of people or more carve out space for buildings, farms, etc …environmental destruction will happen.

      So even if one gets rid of burning carbon / electricity there are even more large populations attached to city life than ever before.

      Where ever we humans gather in large numbers…environmental destruction happens.

  12. BlueMoose

    Serious question, not trying to be a troll. What happens in the US when someone can’t repay for example their student debt loan or some medical bill? Can you just file for forbearance? Do they aggresively come after you and make your life difficult? They can’t throw you in jail, right? Does it make it difficult to find employment?

    1. barefoot charley

      Trifling misdemeanor fines left unpaid may put your sorry patootie in jail while interest accrues, until a reporter writes about it. Medical and student bills get you ruthlessly dunned, and are eventually sold to collection agencies, which like national security agencies are only limited by law when they’re caught, which isn’t often (where have all the reporters gone?). There is no filing for forbearance, Uncle Joe Biden took care of that.

      1. BlueMoose

        Regarding forbearance, one area it seemed to be allowed was in money due to the IRS. Years ago I had to cash out some 401k stuff to get my son out of a bad situation. I took the hit and paid off the penalty until I lost my job and could not continue. I wrote the IRS a letter explaining the situation and made it clear that I had every intention of paying the balance when I had adequate income. Well, eventually i found work, but it never left enough to attack the IRS balance due.

        Periodically, they send me a reminder of the growing balance. I’m guessing when I file for Social Security this August they will probably notice and withold some of the payment. I was thinking about contacting them first, to negotiate a minimal amount. I always wonder what would happen if I died before paying it off. Would they just write it off or go after my son?

    2. lyman alpha blob

      Not only will they aggressively come after you, but you will not be able to get a car or home loan either until your credit is cleared.

      The “they” who will come after you though is often not the entity you owe the money to, but a collection agency. Sometimes the agencies work on behalf of the creditor, but often they simply buy the debt outright from the creditor.

      About all you need to do in the US to be a collection agency is have a phone line. They are some of the most illegitimate, fly-by-night, sorry excuses for a business you will ever see. Funny thing is, they can scare the hell out of people but they really don’t have that much power to do anything (depending on various state laws).

      I once had a gas credit card from Texaco that I owed a couple hundred bucks on and didn’t pay back. Fast forward about 15 years and I got a call from a collection agency saying I owed money. I thought they were mistaken at first but they eventually told me it was for this credit card. By that time the Texaco corporation had long been defunct as an independent entity. I told them there was no way in hell I was going to pay back a debt to a corporation that no longer existed and that if they had been stupid enough to buy the debt for pennies on the dollar that was now their problem and not mine, but they were welcome to call me back so I could tell them to pound sand again, as I found it rather entertaining. They never did.

      So yeah, your life can get very difficult in the US due to unpaid debts, but if you know who you are dealing with, you can also create your own little debt jubilee with few adverse effects.

      1. Synoia

        One needs to be familiar with the Fair Debt Collection Act, and its provisions which require the collection agency to verify the original debt. with the original paperwork.

        There is also a time limit for collections.

        After many years the paperwork is generally long gone.

  13. Susan the other`

    Hudson is priceless. He always makes me wish I had ignored textbooks and just lurked in the stacks reading old forgotten books. I wish we had had an education that had kept history “contextualized”. The bit about Rabbi Hillel being a Pharisee… I wonder if Dr. Bronner knew ;-) That’s about the extent of my ancient history. So this is sending me off in every direction as usual. Talk about a vast detour. How to research lost civilizations like the Etruscans? Were they the ancient Kings of Rome? Never mind. And thank you for this post.

    1. ambrit

      Alas, the last known history written of the Etruscans was by Claudius, that Claudius, now lost. They did precede the Romans, but aren’t considered lineal forebears of. The story is more like that the Romans took over the Etruscan lands and absorbed the people.

      1. The Rev Kev

        I like to think that somewhere in the unexcavated remains of Pompeii, that there may be a library of some nobleman who kept a copy of that particular book waiting to be discovered.

        1. philnc

          Livy wrote about the Etruscans. Many historians of ancient Rome don’t trust him (mostly because he’s goes all in on the Romulus and Remus myth), but some archeologists still use him as a reference. As much obvious propaganda as Livy’s _History_ contains, it’s still a treasure trove of interesting detail about the world the early Romans lived in — at least how they (or succeeding generations) saw it.

  14. lyman alpha blob

    I’ve been enjoying And Forgive Them Their Debts, which is not only a great read but also a very nice looking book too. Glad to know there are other books forthcoming!

    I just happened to be reading the historian Polybius when I started Hudson’s book and noticed that Hudson speaks about the 3rd century BC Spartan Cleomenes as a reformer who wanted to redistribute land and forgive debts (he wound up killing himself before his opponents could do it for him) but Polybius, despite writing extensively about Cleomenes, never mentioned the specifics of why he was in disfavor with his own people. The extant writings of Polybius are very incomplete though, so maybe he had mentioned it and it was lost.

    Michael, if you are checking this piece today, I would be interested where you got the specifics on Cleomenes from. Did I miss it in Polybius, or is it discussed by Plutarch? I suppose I could also check the numerous footnotes…. Reading your book made Polybius much more interesting with that added context!

    1. michael hudson

      Plutarch is by far the major source. But he was anachronistic in imagining that the “Lycurgan” laws ever existed in the beginning. It’s a long story. If there are enough requests, I’ll post the chapter on NC.
      Polybius was very pro-creditor and pro-oligarchic, against Sparta.

      1. lyman alpha blob

        Yes he was very enamored with the Romans, considering they were holding him prisoner. I get the impression though that he was treated much like today’s white collar criminals, if not better. Maybe he respected the Romans for being able to get their act together enough to conquer everyone else rather than just fighting amongst themselves like his fellow Greeks constantly did, taking a break only when the Persians showed up.

        The interesting thing is, even as he is describing the Roman republic at its height, he had enough of a grasp of history to know it would eventually fail just as every other state had.

        Thank you for the response and put me down for one request – I would love to see the chapter here if there is enough interest.

        1. The Rev Kev

          I agree very much with what you said. When you read Plutarch’s book, you can see how much he admired the Romans and the logical and efficient way that they went about things. His chapters on how the Roman army was organized and its standard operating procedures was a bit of a revelation. Like you said, he must have contrasted it with his own homelands and its constant bickering. He may have been a prisoner of the Romans but his treatment was very much as an honoured guest of the Scipio family if I recall correctly.

  15. Jef

    The current economic system holds out the promise that if you are clever, diligent, and in my opinion somewhat immoral, you can position yourself such that you don’t have to work and money will still flow your way. In most cases this is how the really big money is made.

    Only a fool works for money, a smart person has his money work for him.

    Virtually everyone at every level believes in this promise and that is why nothing will change until that promise is understood as a lie and is denounced as immoral.

  16. Marc

    James C. Scott has written several books on state formation that inform the discussion about debt forgiveness, particularly in the Mesopotamian context (The Art of Not Being Governed, Against the Grain).
    The early Mesopotamian city states would have been tiny compared to the non-state areas around them. A significant challenge for a state would be to attract and retain people (free or slave). In an era with large non-state spaces and comparable state competitors they would have had to occasionally demonstrate that remaining in the state space was not awful compared to the alternative to moving into the non-state periphery.
    Debt forgiveness was not offered because the king (state) was strong but because the king was relatively weak. Rome is an example, for a time, of a stronger state that was able to reduce non-state spaces and thus extract far more from the populace with less risk of losing the population to flight.

    1. Phil

      One of the many things I learned from Scott was the degree to which early Mesopotamian rulers were preoccupied with preventing the laborers from running away to live in the hills and marshes, where life was a lot easier than on the slave plantations that were the economic base of the city-states. Another was that the early focus on grain agriculture had everything to do with the fact that grains were easily measured, stored, and transported and hence easily taxed.

      According to Scott, debt only becomes necessary in an economy that was fixated on a system of production that depended on annual harvests, as a means of supporting the farmers during the remainder of the year. In the societies of the hinterlands, the land was managed and food was produced year-round. Of course, so-called “hunter-gatherer” economies couldn’t compete with urban-agrarian societies in terms of population density (and hence war-fighting ability), which is why they only persist now in those areas that are still unprofitable for agriculture.

  17. RBHoughton

    What a splendid man Michael Hudson is. He has leant his scholarship to us all to show those important centuries after 600BC in terms that are from the present day – Delphi = Davos for example.

    He mentions at the end that strong civil law is imperative for the world to recover fairness amongst humanity. I would suggest that strong civil law cannot come from a factional parliament. We would first need to overthrow the factions, usually two, and restore democracy to the legislative debating chamber. Once representatives genuinely represent the electors we can start to hope.

  18. political economist

    Michael you say “That probably requires public banking and credit – in other words, deprivatization of banking that has become dysfunctional.” From my understanding this is contrary to what Wray, and most others in the MMT school, think. Are they too optimistic about today private banking system?

  19. Wukchumni

    One really important fact not touched upon is the concept of coins, and the slow centuries of acceptance after the Lydians came up with the idea.

    It jives perfectly with the end of debt amnesties in the ancient world…

    If anything now, we are much closer to the pre-coin era, in that a good amount of wealth in the world is merely ledger entries on a computer data base

  20. Olga

    Thank you, MH, for all this work! Looking forward to reading it all, once life settles a bit. As kids, we developed a fascination with Sumerians (and the ancient world in general), when reading popularised histories by Vojtech Zamarovsky in the ol’country. (It helped that one of parents’ friends was a grandson of the man, who discovered Troy!) Trying to remember VZ’s name, I saw that questions about the ancient world still pop up in high-school graduation exams (at least in Central Europe). So not all hope is lost…

  21. Edward

    Do we know anything about how Carthage managed debt?

    I think the internet has made rentier economics more potent and more dangerous.

  22. Henry Bianchini

    This is a very interesting approach to one of our present problems. My grandaughter is paying about 13% interest on her student loan. if this is not an obvious counterproductive way to furthering our core values, what is it.

  23. John Anthony La Pietra

    A stray question has occurred to me, and I can’t find an answer already online, so let me ask it here. I’m very interested in this topic, and hope to finally get through the first book in the series on it before the next one comes out (whenever that will be). I was trying to think of times when Jesus was talking about debt aside from his first sermon — and the parable that came to mind was not the one of the unmerciful servant in Matthew 18 (who was forgiven his debt to the king but would not do the same for his own debtor), upon which Professor Hudson commented in 2010 in his paper “The Lost Tradition of Biblical Debt Cancellations”. Instead, my brain came up with the parable of the “unjust steward” at the start of Luke 16. I would very much like to hear Professor Hudson’s commentary on that story.

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