Michael Hudson: How Lenders Sought and Got Power in the Roman Era and Helped Legitimate Later Rentierism

Yves here. Michael Hudson gives another historically very wide ranging talk on borrower and lender relations, here going back to the Bronze era to ancient Greece and the Roman Republic and empire, through the modern era. He explains how ancient states recognized the importance of preventing strict enforcement of lenders’ rights was critical to national survival, since among other things, debt slaves would be difficult to enlist for defense. This discussion is very accessible and would be good to circulate to those who might not appreciate how our modern view of lending and debt is actually a political construct, and one found repeatedly in the past to pit creditor/oligarch interests against those of national survival.

By Mitch Jeserich. Originally published by Letters and Politics, KPFA

MITCH JESERICH: Good day and welcome to Letters and Politics. I’m Mitch Jeserich. Today we return to the topic of the ancient world for a conversation about how economic forces shaped ancient societies and how they may have brought on their collapse.

My guest for this is economist Michael Hudson. Michael Hudson is the author of the book that we’ll be in conversation about, called The Collapse of Antiquity. Michael Hudson is president of the Institute for the Study of Long-Term Economic Trends and distinguished research professor of economics at the University of Missouri, Kansas City.

Michael Hudson, it is my very good pleasure to welcome you to this program.

MICHAEL HUDSON: Well, thank you for having me on.

MITCH JESERICH: Debt plays a key role in the story that you tell and how economic forces shape ancient societies, especially about ancient Greece and Rome. As we begin, can you talk to me about what’s important to understand about, I guess, the nature of debt in the ancient world?

MICHAEL HUDSON: Well, the nature of debt really is what makes Western civilization different from everything that went before.

Early civilization was very stable from the Bronze Age. You had royal kingdoms, you had a general role of what’s called divine kingship. In other words, these were kings that ruled in conjunction with the temples, and their role was basically to prevent an oligarchy from developing.

They wanted to maintain balance. They wanted to maintain the citizenry with enough land of its own to be able to fight in the army and to provide corvée duties on basic infrastructure, building walls, digging canals, etc.

Every ruler of the Babylonian dynasty and the Sumerian dynasty before the Egyptian pharaohs and other Near Eastern realms all started their reigns with a clean slate. The clean slate canceled the debts that were outstanding. Most were owed to the government itself and to the palaces and temples. And they freed the bondservants who’d pledged their labor to work for the creditors, and they returned land that had been forfeited.

So they maintained a fairly steady equilibrium, and the role of kings was to provide order and preserve economic balance.

This is what did not exist in classical antiquity. The Bronze Age was very stable, but it came to an end throughout the Eastern Mediterranean around 1200 BC when there was really bad weather, there was climate change, and that set populations in motion.

The populations of Greece and the Eastern Mediterranean plunged. The land became depopulated. The linear writing that the Mycenaean Greeks had developed for their palace accounting disappeared, and so did palace power.

MITCH JESERICH: It was known as a dark age.

MICHAEL HUDSON: Yes, a dark age, from about 1200 BC to about 750 BC.

So you had local mafia states developing. The historians of this period say, well, there was no rule. So the local palace administrators of Greece just said, well, I’m in charge now. You had warlords taking over.

Then further west in Italy and the whole rest of Western Europe, you had basic chieftainship. These chieftainships didn’t have charging of interest. They didn’t have a single general purpose money. They were not part of the whole economic takeoff of the Near East that provided the origins of money and weights and measures and the charging of interest.

Around the mid 8th century BC, 750 BC, you had traders from Syria and Phoenicia begin to move westward to trade. And they set up local temples as chambers of commerce to trade with the Greek city-states and the Italian city-states, Rome and its surrounding states. And they brought these practices of charging interest to the local rulers.

I’ll start with Greece because that’s where most of the historical development of the West begins. You had these local autocratic mafia-like states developing throughout all the main city-states.

The result was that members of the aristocracy itself – not the highest aristocracy, but e.g., sort of a distant second cousin – said, well, this is really unfair. We’re having all the wealth concentrated in the hands of these chieftains who’ve used this idea of lending money, charging interest, and saying, well, if you can’t pay, then you have to work for us and you have to give us our land.

So you had a totally concentrated autocracy in Athens, Corinth, and Sparta. And each of these city-states had a revolution. In Sparta, they went the furthest. There was such a revulsion of the [unclear] that they abolished money altogether. And they had a kind of pre-Soviet state just allocating: here’s how you’re going to live your life and train for the military.

The most advanced city-state was Corinth. And they had a revolution. They overthrew the, I won’t say oligarchy, because it wasn’t an oligarchy. It was just the bosses at the top, the aristocracy.

They said, well, either we’re going to cancel the debts and we’re going to redistribute the land… because without giving the population land, they’re not able to serve in the army. They’re not able to provide public services. And we’re giving them land so they can do what a citizen is supposed to do, fight for the country and support us. And if you don’t like this, you can leave and we’ll exile you.

That was in the late 7th century by Athenian times. Athens was really the last city to begin to overthrow the oligarchy. And that’s when they appointed Solon as Archon, as everyone knows, around 490 BC. He did not redistribute the land, but he canceled the debts.

MITCH JESERICH: Solon was brought on because there was just this great disparity/inequality in Athens, and it was causing strife and a lot of problems. They bring in Solon, who commonly is referred to as the lawgiver, to kind of come up with a new sense of a constitution that would hopefully bring peace back.

I think he even promised that he would do land redistribution, but he didn’t do that. But he did cancel the rest.

MICHAEL HUDSON: He was very unpopular. And the population as a whole was resentful for the fact that he did not redistribute the land, which the Corinthians and the Spartans did, but he only canceled the debts.

That itself was not yet a constitution, but it opened the way to set in motion a whole century of reform that became democracy. The reforms basically were led by Corinth. All of these new rulers/reformers, who overthrew the dictatorships, were called tyrants.

Tyrant was a foreign word and it meant person in charge. Later, it took on the meaning of a bad meeting by the propagandists as the oligarchy developed. Because, in each of these areas where there had been an overthrow of royalty or basically the local rulers, you did not have a change in the laws and the constitution – nothing like the Near East, where you had a central ruler empowered to cancel the debts, redistribute the land, and free the debt bond persons.

But what the tyrants did do was they opened the way for democracy by using public spending and public investment projects.

Solon was followed by tyrants, by Pleisistratus, that developed public spending and began to create a general prosperity.

And, at the very end of the century, you had the real Athenian Constitution written by another former aristocrat or member of the aristocratic family, Pleisthenes, who really redesigned Athens’ voting system, attempting to have democracy.

MITCH JESERICH: He broke up the aristocratic class, right? In the power structure.

MICHAEL HUDSON: He tried to merge all the classes together and sort of merge the wealthy people with the less wealthy classes.

A few centuries later, when Aristotle wrote his study of the constitutions of the Greek city-states, he said they call themselves democracies, but they’re actually oligarchies because they’re democracies for votes, but the votes are all controlled by the wealthy people, sort of like the United States today.

A similar thing happened in Rome. Rome did not have a revolution to overthrow the existing oligarchs. Rome began as a very underpopulated area near the Tiber River. And the Tiber River was mosquito-laden, as rivers tend to be in the summer in Italy. And so there were not very many people there.

The problem of the local leaders of Rome was: how are we going to get citizens? How are we going to build up the population for us to be a power and not be conquered by the Etruscans or by others?

According to the Roman historians, the kings made an offer. If you other Italians want to flee your despotic little city-states and come to us because you’re enslaved and you want to run away from bondage, or you want to have land of your own that you’ve lost to the creditors, come to us. We’ll give you your own land. We’ll protect your land. You’ll serve in the army for us. You’ll be public citizens, but we’re going to have a democracy and we’re not going to let a ruling class develop in Rome like the places that you’re fleeing from.

And so they were able to attract more and more people. By the end of the sixth century, you even have aristocrats who were from other cities who’d fought for power and lost, and they brought their fortunes to Rome.

After Rome had seven or more kings, all of whom repeatedly protected the landowning, the citizenry with its own land prevented the citizenry from losing it and prevented there being the kind of polarization that later developed, the aristocrats got together and overthrew the kings. And they said the kings wanted to be tyrants. They had the usual personal attack on kings, and the aristocracy took over.

MITCH JESERICH: I’d like to go back to Aristotle as you talk about this, because he puts up this, I think, very interesting formula that I remember studying many years ago. And that is the nature of power between monarchy, aristocracy, and democracy.

Within this cycle, let’s begin with the monarchy. The monarchy is going to decay into tyranny; then that’s going to be so unfavorable that it’s going to be overthrown by the aristocracy, which word I think means the best of the best. Eventually, that decays and becomes an oligarchy. And then people become fed up with that and they overthrow that. And then comes democracy, now people power.

But that will also decay into, I think the word is ochlocracy, a sort of mob rule. And then that becomes intolerable, and people desire just normalcy to return back to life. And so they’re ready to once again kind of accept the return of a strong-armed monarch to bring order.

MICHAEL HUDSON: That’s pretty much what he said. Remember, he was speaking for a class – basically, for the oligarchy class itself, or for the leaders of his time.

It’s not that the rulers became autocratic. The rulers actually were overthrown by the oligarchy. And what Aristotle said was: once the rulers are overthrown and there’s a popular revolution, as there was in every Greek city, this revolution leads to prosperity.

And in prosperity, wealthy families develop, and within the democracy an oligarchy develops and so an oligarchy develops until finally there has to be a revolution and that leads to the creation of a new central authority. They called it tyranny or kingship, but it really is an anti-oligarchic revolution.

I think the best way of thinking of this is that early civilization before the West protected debtors to maintain balance and maintain their liberty and their land ownership, and to prevent oligarchy.

Classical antiquity had pro-creditor laws from the beginning. Despite the fact that there was political democracy (everybody had a vote), the laws favored the creditors and a debt was a debt. It had to be paid. There was no cancellation and debtors had to end up as bondservants to their creditors and they would lose the land. And when Rome went to war and began to conquer more lands, they turned it over to the oligarchy, not to the veterans.

So you had a completely different development system. And most people don’t think of antiquity in this form, but you can think of it as an oligarchy versus a kind of, I won’t say royal kingship, but monarchs that acted to achieve what the aim of economic democracy was supposed to be.

The kingship or royalty that Aristotle was talking about, historically, was actually protecting the population at large and its landholding and its freedom from bondage from an oligarchy developing. But there was no similar protection in the case of classical antiquity.

And in Rome, they gimmicked the voting so that the wealthy classes, the voting was by economic class. And if you were a wealthy member of the top class, your vote was 10 or more, many times the vote of the less wealthy classes. And so basically every election was decided by the votes of the wealthiest classes, and everybody got to vote, but some votes were more important than others.

MITCH JESERICH: This is the creation of the Senate. And the Senate, I think the word even means sort of old men, old wealthy men.

Let me ask you: I like your argument when it comes to the end of kings in Rome. The traditional story is a story known as rape of Lucretia. And there’s a king, Tarkin, who is overthrown after he rapes Lucretia because people are just outraged by this. But you take on that story about being the end of kingships.

MICHAEL HUDSON: Well, that turned history inside out.

The reality, we know from all of the complaints of the Roman people, is the aristocrats were raping. All of the raping, all of the violence, and all of the force was by the aristocrats and the oligarchs, by the wealthy people, by the creditors against the debtors.

They made a kind of personal attack on Tarquin, whose offense was really trying to prevent the oligarchs from increasing their ability to just turn the population into servitude. So, this rape of Lucretia was designed to depict kings as oppressors, not as protectors of economic order, against the oligarchy.

Just as today, you’ll have President Biden say America’s backing democracy, such as we have in Ukraine and in Israel, against autarky, which we have in China and the countries that are achieving rapid growth and prosperity. You have a kind of Orwellian vocabulary and an Orwellian view of history.

So there’s been a whole re-examination of Roman history, and you realize the extent to which the history was written by the aristocracy and that became the oligarchy that overthrew the kings from its own point of view. And it’s largely invective: the whole vocabulary of invective and the mythology is invective, representing the kings as being violent.

Whereas the whole history of Rome, century after century, was one of a social war in which the oligarchy used political murder on anyone who would try to promote a member of the ruling class or senate or patricians who would promote protection of the debtors or actually enforce the laws preventing a debt from growing beyond a specific amount or charging interest that was illegally high.

Anyone who sought to protect the debtors was murdered again and again, from the beginning of the Roman Republic all the way to the assassination of Caesar. You had political assassination and violence. It was sort of like they had their own CIA to a police state.

MITCH JESERICH: Wasn’t Brutus who killed Caesar – you know, the famous Et tu Brutus – wasn’t he a debt collector?

MICHAEL HUDSON: Well, they all did it together. They all conspired together.

Cicero, who was the sort of golden-mouthed spokesman for the wealthy class, wrote a letter saying, oh, I’m so sorry I couldn’t be there to plunge in my own knife.

There was a fear when Julius Caesar took over. There had already been yet another debtor revolt by Catiline, by the debtors. The debtors included not only the poor, but a lot of the aristocrats who’d fallen into debt and spent their inheritance and were in danger of losing their own assets and power.

This was the fight that Catiline organized. This is presented to students of Rome as the Catiline conspiracy, but it wasn’t a conspiracy. Obviously, they said, we’ve got to organize the revolt in secret so that we can all revolt together. And there was a whole army and there was fighting for decades that went on afterwards.

Caesar had been a silent, sort of a quiet supporter of Catiline. And the Senate was worried when Caesar came back to Rome. We could think of him as a liberal social democrat reformer. He was trying to reestablish the economic balance from the very unbalanced Rome, what had become a new Roman aristocracy within the oligarchy, the Roman ruling class.

And they were very afraid that he was going to do what Catiline did and cancel the debts.

Indeed, Caesar did enact a bankruptcy law, but the bankruptcy was mainly for wealthy individuals who actually could afford to pay the debts but were given a long time to write them off and favorable repayment terms. He didn’t really proceed to a general popular debt cancellation.

But they were all worried that that was what he was going to do because that was the whole history for five centuries of the Roman Republic: a long fight by the population at large to free itself from bondage and from running into debt. It was a fight trying to achieve what really would be democracy, a fight against the oligarchy and for democracy.

It became apparent that only a strong central ruler, such as Caesar, could do what the Bronze Age rulers had done. And you needed a strong enough government to prevent an oligarchy from developing and indebting the population at large and monopolizing its land.

MITCH JESERICH: This is Letters and Politics. We are in conversation with Michael Hudson. Michael Hudson is the president of the Institute for Study of Long-Term Economic Trends and Distinguished Research Professor of Economics at the University of Missouri, Kansas City. He is the author of many books.

We’re in conversation about one of them. It’s called The Collapse of Antiquity.

In our conversation, I have awareness of it sounding like we’re praising monarchy or kingships here. And we just had what we called a No Kings Day protest here in the United States a couple of weeks ago, where thousands of people across the country protested the sense of having a king and really protesting Donald Trump.

I do believe you can have a benevolent king. I believe you can have (hence the term) a benevolent dictator, one who actually is trying to serve the people. But more times than not, that’s not what we end up getting, is it?

MICHAEL HUDSON: You’re right. Kingship in the West is not what kingship was in the Bronze Age. [Western] kingship is much more autocratic.

[Western] kingship stemmed from warlords conquering the land, and they were backed by the Catholic Church that essentially would go to the Norman warlords and said, well, if you conquer England and pledge fealty to the Pope and Rome – if you agree to let Rome appoint your bishops in charge of all of your finances so that you can send your realm’s finances to Rome – if you pay tribute to Rome – then, we will back your autocratic power against parliamentary reform.

And so, when there was an attempt, e.g., in England in 1215, to have the Magna Carta that would enable the parliament to block kings from running into foreign debt to pay for the wars that the Romans supported – instead of excommunicating the practitioners of usury, the pope excommunicated the signers of the Magna Carta for opposing usury.

They said, we’re for the divine right of kings, no parliamentary control, as long as they’re loyal to Rome because this is feudalism and there are serfs and they have to do whatever we want.

It all began a generation before William the Conqueror in 1066. It began with Robert Guiscard in southern Italy and Sicily, who made a deal with the Pope: well, if you conquer Sicily, we’ll recognize you as the king as long as you paid us tribute and pledged fealty to Rome and let us run your country. And we will give you total power over any reform as long as you serve what we’re doing.

That’s the kind of kingship that you had in the West. So kingship here has an understandably negative term because in the West, kingships became what we know that kings do. It’s hereditary, it’s not democratic.

The kings had no obligation to promote the welfare of their land. They were self-serving, or they served initially the Catholic Church until about the 14th century when, after the Crusades ended, they began to run into debt to fight their own wars, not for the Vatican and for Rome, but for themselves.

All of a sudden, they ended up in two centuries acting as collecting agents for the international banking class that developed from the 14th, 15th, and 16th and into the 17th century. The banking class became the organization, political organizers of Europe in place of the church.

So, basically throughout Europe, kings basically acted as empowered to overrule their parliaments and consign all of their tax revenues to pay the creditor class to finance their wars against each other.

That’s obviously not the same kind of kingship that you had in antiquity, in the Bronze Age. In the Bronze Age, the kings canceled the debts. In Western civilization, they ran into debt and used their power just autocratically to impose taxes and without any thought at all of promoting public welfare, but just of promoting themselves and their families and the nobility that had inherited the land from the warlord ancestors who conquered their lands. So kingship in the West was completely different.

As I mentioned, I have a seven-volume history of debt through the ages. And the first volume, And Forgive Them Their Debts, was all about the origins of economic practices in the ancient Near East, interest and money and all of this, and under a form of stability to prevent an oligarchy.

The Collapse of Antiquity shows how Western civilization did not have protection against the oligarchy. It established pro-creditor laws. And even though Rome collapsed, its legal system became the legal system of Western Europe and the whole West.

MITCH JESERICH: Well, I want to ask about that because it’s heavily on my mind now.

I’ve always been fascinated in studying the history of the Constitution and reading the Federalist Papers and the Anti-Federalist Papers. When you read them, you really feel like what you’re reading is a debate about Roman history and how much they relied on the Roman Republic in coming up with their own system of government.

I am also remembering that what led up to the Constitutional Convention was a debt crisis that was playing out across many of the states. You have Shays’ Rebellion occurring, in which states were sort of through popular revolts being forced to cancel debt.

The Constitution, at least in part – the Constitutional Convention, anyway, at least in part – was meant to try to stop the debt cancellation from continuing, if I recall correctly.

MICHAEL HUDSON: Yes, and taxes levied to pay the debt.

You had from the very beginning of the American colonies a kind of creditor oppression of the colonies. England did not permit the colonies to create their own money or create their own credit. They insisted you conduct your transactions from English merchants and English bankers.

The bankers began to make loans to farmers with the whole intention… they would make a loan to the farmer ostensibly to be paid out of the crops, but then they’d demand payment before the crops were in and they’d foreclose on the land. The creditors, the English creditors, used credit trying to grab the land from the colonies.

That’s why Massachusetts and Pennsylvania said, we’re not going to be subject to British creditors. We’re going to create our own money, our own public money.

Alongside that, you had private bankers developing, and the private bankers were so oppressive, just as oppressive as the British lenders had been, that for the whole 19th century, there was so much of a feeling against banks in the United States that the Treasury never really let commercial banking develop. It insisted that tariff revenues be paid in gold, not in paper money.

The Treasury really opposed the development of paper money and banking because they thought that the banks were so oppressive. And that was one of the retarding features of the United States, until the Federal Reserve was created specifically to enable the banks to create paper money and take control out of the Treasury, not letting even a Treasury official act on the board of the Federal Reserve and to shift the center of financial control out of Washington to New York City, Chicago, Boston, and other financial centers.

So, yes, this financial struggle occurred in the United States against banking in the legal and the whole monetary structure. But I don’t think the founders of the Constitution really understood Roman history except to the extent that it was written by the creditor class. They did not have the scholarship that we now have.

MITCH JESERICH: I want to also ask about the fall of the Roman Empire. This is many years after the fall of the Republic, when the Republic was replaced by (we call it an empire) an emperor to rule over Rome, back to a king. They didn’t want to call him a king because they have a tradition of no kings.

But the fall of it is interesting. You make this interesting argument in your book, The Collapse of Antiquity, that I never really thought about.

I think the common notion of the fall of the Roman Empire – and there are many explanations for it, including environmental ones – was that they were just overrun by these Germanic barbarians, who were ruthless fighters who came in.

Your argument is quite different than that. Your argument is that, no, these Germanic invaders, the Vandals, Alaric the Goth: they were welcomed when they came in.

MICHAEL HUDSON: They were not invaders, they were hired.

The individuals who wanted to be emperor or who wanted to control their own territories hired German fighters. And the German fighters extended all the way through France at that time. They hired the Gallic and German fighters to fight their wars against their rivals. And there was a large defection away from Rome to the German fighters.

The Germans then invaded Rome and North Africa, which was Rome’s breadbasket, from Egypt to where St. Augustine was to the west in Hippo. And they took control of North Africa and Rome and were basically established. They got rid of the Roman ruling class that had been so corrupt and depopulated.

The fact is, it’s not that the Northern Europeans, the invaders, the troops that were hired and moved in against Rome moved into the kind of Rome that existed centuries earlier. Rome was depopulated because, as you reduce the economy to debt bondage, you’re not going to have a population growth.

Feudalism, as it developed in Rome, had sexually segregated barracks. Roman land was divided into big aristocratic estates, and you’d have dormitories for the men, dormitories for the women. You had vast depopulation.

The whole economy was polarizing to such an extent of being impoverished that you had Roman philosophers saying, it looks like the Germans have a superior economic organization. They don’t have this kind of bondage. People are moving over to them because they’re less oppressive than the Romans. And so, in a way, you could say these were liberators.

All of this came to sort of a head by the fourth century, the fifth century, with St. Augustine, when you had Constantine converted to Christianity. But by making it the state religion, it was the religion of the Roman aristocracy that had come in.

The question is: how are they going to get rid of what Jesus said about Christianity? And so you had Augustine call in the Roman troops, and the Romans insisted that the local Christians support the aristocracy and turn in their Bibles. And there was a pro-Roman Christian church and an anti-Roman, and the original Christian church that was all for debt cancellation and protection of debtors.

In Hippo, where Augustine was, where there had been these invasions that had taken over large estates, they were called the Donatists. The original Christians were protecting the debtors. And if the aristocrats tried to foreclose, their associates would have armed gangs protecting them.

Augustine said, well, you know, we have a problem. And the problem is Jesus’ Sermon on the Mount and the Lord’s Prayer that said, forgive them their debts as we forget their debtors. Augustine said, well, this is not about debt at all. It’s, forgive us our sins. Everybody has an inborn sin from Adam, and you need the church to intercede for you by freeing you from sin, by giving you forgiveness.

But he supported the debtors. There were armed fights. He called in the Roman army to turn over the Christian churches to his pro-Roman people and sort of remade Christianity as a creditor-oriented religion, not as a debtor religion.

And he had rivals within the Christian church, like Pelagius, saying, well, wait a minute, if you’re a wealthy person and you give your money to the poor and do good work and are a philanthropist, won’t you get into heaven by being a good person?

Augustine said, No, no, you have to give it to the church. To the poor – the poor are the church preachers. You have to give it to the poor to support the church to pray for you. You can’t save yourself except by giving money to the church.

This is what poisoned Christianity from the beginning and made the fall of the Roman Empire happen to transform the whole character of Christianity in the West. Not so much in Constantinople, not so much in Eastern Orthodox Christianity, but in the West.

That’s part of this whole oligarchic takeover and concentration of land ownership, of creditor power that occurred throughout Rome, bequeathed to the West not only through Christianity but through the whole property system, the system of laws and foreclosure on the property and land of debtors to the creditors.

All of this was part of the culmination of the way in which the Roman Republic was created from the very beginning as an oligarchy, preventing any public power from controlling the oligarchs, any strong central power from preventing the oligarchs and impoverishing the economy and ultimately reducing it to serfdom, which took five centuries to really wreck the whole economy.

But that’s the history of antiquity, as written by historians other than the oligarchs themselves. And, fortunately, we have their histories and it’s all very well documented, but it had been pretty much ignored before the mid-19th century when historians began to say, wait a minute, there are two sides to Roman history and what happened. And so I’m filling in what was left out in the early 18th century views of Roman history.

MITCH JESERICH: So do you think this dynamic is still alive today when it comes around debt?

With this all-in mind then, as we talk about kings and oligarchies and debt, I want to ask about then how would – and even if they do, because maybe they don’t – Joe Biden and Donald Trump fit into this narrative?

Because I have noticed when talking about the Roman aristocracy, the Roman Senate, the Roman Republic, you’ve referenced some things that Joe Biden says today. So how does Joe Biden and then Donald Trump, who got elected on a populist movement, fit into this dynamic, if they do even?

MICHAEL HUDSON: There’s really very little they can do because the American oligarchy today, ever since the Citizens United case of the Supreme Court, means that there are two parties and it’s almost impossible to create a third party. The two parties’ leadership are in charge of appointing who the candidates are going to be for the democracy to vote for.

MITCH JESERICH: You don’t think Donald Trump broke up that dynamic? The party didn’t want him.

MICHAEL HUDSON: There’s no way he can overcome the Citizens United case and say, wait a minute, we can’t have private funding of political campaigns. That’s bribery. There’s no way that he can democratize the voting system because that’s a constitutional and legal impediment.

And he got elected by promising to take, as you pointed out, a populist program.

But he was supported by his backers because he can lie so convincingly that people really believe him when he says I’m going to help the working class. That’s why I’m cutting their Medicaid. That’s why I’m favoring all of the cutting taxes on the wealthy and raising them on the low-income people. But it’s all for you. It’s all going to help the working class.

He was a very successful demagogue, being a television celebrity. Think of him as sort of the American Zelensky or the Russian… You can think of him as all sorts of demagogues, but he’s a demagogue.

Right now, he’s threatening to plunder, to essentially centralize running up budget deficits to pay the American oligarchy, who realizes that pretty much we’re at the end of the whole American takeoff since World War II. Every recovery has been at a higher and higher level of debt.

That means, finally, the middle class is being squeezed out. The wage earners are in debt. They’re in mortgage debt if they’re homeowners. They’re in student debt. They’re in credit card debt. They’re in automobile debt.

The economy is shrinking because of the income not only of wage earners, but of corporations that are in debt to their bondholders. And there’s so much debt that the economy is grinding to a halt.

So Trump says, okay, we’re at the end of this whole wonderful 80-year takeoff since 1945. We’re going to have a grab-itization, just like Yeltsin had in Russia. And I’m going to back the oligarchy, grabbing whatever it can, taking their money and running. That’s his policy.

And he was, until quite recently, able to hold the support of voters who actually thought nothing can be worse than what the Democrats and Biden and Hillary have been doing. We’re going to vote for him just to say, throw the rascals out. Well, you get an even bigger rascal. And you really don’t have a choice because the same people/powers that have backed Trump were backing the Democrats, although Trump’s more of the Silicon Valley billionaires.

The question is, which set of billionaires do you want to run the country? Do you want the Wall Street billionaires to run the country financially, or do you want the monopoly billionaires of the Silicon Valley and other billionaires to do it? But billionaires are going to run the country no matter what party’s in power, and the population is going to be squeezed.

MITCH JESERICH: We’re down to our final.

MICHAEL HUDSON: You could say that that’s made America a failed economy and a failed state because of the Constitution.

In my mind, a constitutional review should be to keep modernizing the Constitution and keep adjusting it to the modern times. If you have a Supreme Court that said, we want to think what the slave owners would have done back in the original Constitution; you have almost word for word the right-wing Supreme Court doing what the Athenians did to Solon.

They said they wanted to restore the original Constitution of Solon. And what you had were rival views of what the Constitution was. And the oligarch said, no, what Solon really did was he didn’t really cancel the debts. He just changed the monetary exchange rate to make it easier to pay the debts. There was a denial that Solon did everything that he’d done.

That’s the kind of fight that you’re having in the United States today, saying, don’t modernize the Constitution. Do not democratize the American Constitution. It was written by slave owners. It was written and dominated by the wealthy. That’s the kind of America that we’re going to have.

Otherwise, it’s unconstitutional to be democratic, unconstitutional to prevent the wealthy oligarchy from funding the political campaigns of the politicians running in the primaries so that whoever wins the primary for either party is going to be the politician supported by the wealthiest campaign donors.

MITCH JESERICH: Michael Hudson is the president of the Institute for Study of Long-Term Economic Trends and Distinguished Research Professor of Economics at the University of Missouri, Kansas City. He is writing a series of books on the history of debt, including the one we were in conversation about. That’s called The Collapse of Antiquity. Michael Hudson, I’ve enjoyed our conversation very much, and I thank you.

MICHAEL HUDSON: Well, thank you so much for having me. I’m so glad we’re getting these issues into broad discussion.

MITCH JESERICH: That does it for Letters and Politics. The show is produced by Deanna Martinez. Kristen Thomas is the engineer. I’m Mitch Jeserich, and I thank you for listening.