If We Don’t Solve The Problem Of Economic Polarization, We’re Going To Go Into Another Dark Age by Michael Hudson

cancel the debt

Image by Friends of the Earth International via Flickr

by Michael Hudson
Writer, Dandelion Salad
Michael Hudson
January 27, 2017

Speech to Kairos group, Union, Columbia
[Edited version for clarification, January 23, 2017]

The focus of my talk today will be Jesus’ first sermon and the long background behind it that helps explain what he was talking about and what he sought to bring about. I’ve been associated with Harvard University’s Peabody Museum for over thirty years in Babylonian economic archeology. And for more than twenty years I’ve headed a group out of Harvard, the International Scholars Conference on Ancient Near Eastern Economies (ISCANEE), writing a new economic history of the ancient Near East.

The five colloquia volumes that we’ve published began in 1994. We decided we have to re-write the history to free it from the modern ideological preconceptions that have distorted much popular understanding.

When I began to study Sumer and Babylonia in the 1980s, there wasn’t any economic history of the ancient Near East. There were histories of the ancient Near East, but I had to go through every volume with general history, look in the index, and sometimes I would find debt, but more often there wasn’t. 

I had to go through the whole literature, and I realized that assyriologists didn’t want anything to do with economists. There was a very good reason for that. Since the 1920s there was an idea of what was called “Babylonianism”: The idea that everything came from Babylon. In practice this meant that everybody would project their own belief about how civilization began in the ancient Near East and the Neolithic.

 It was like a Rorschach test. The Vatican, who had Sumerian translators, thought that it was a temple state and temples ruled everything. Socialists thought that it was all communal. The free enterprise boys – the Austrians and other liberals –just ignored the palaces and the temples, and thought that markets and individuals traded, and that was that.

From the actual people who study cuneiform records, 90% of which are economic, what we have surviving from Sumer and Babylonia, from about 2500 BC to the time of Jesus, are mainly marriage contracts, dowries, legal contracts, economic contracts, and loan contracts. Above all, loans.

We decided at Harvard to do three volumes of colloquia. The first was on privatization in the ancient Near East: how did private property emerge. The second was on land tenure. And from the very beginning the main focus was going to be on the third volume. That was on debt and economic renewal, that is, debt cancellation.

 I didn’t read Babylonian or Sumerian. My degree is in Germanic philology, not in ancient languages. So I had to read all these royal proclamations of debt cancellations in translation. And that turned out to be a great benefit. Because the translations of the Sumerian and the Babylonian, in every language are completely different.

In America, it’s a tax reduction. Samuel Kramer, who wrote the most popular book on Sumer, wrote a letter in 1981 to The New York Times urging newly elected President Reagan to do what Urukagina did in Lagash in 2350 BC and lower taxes. That’s not what happened. The esteemed professor was projecting his own right-wing economic beliefs onto the ancient past.

The English thought – how English can you get – that these were free trade agreements. The Germans got much closer to the reality, and said they were debt cancellations. Finally came the French translations. They got it right: Dominique Charpin translated the Sumerian term as a restoration of order. The word for the clean slate in Sumerian was “amargi” and the root is “ma”: The “mother” of all situations.

The rulers had what we would call an economic model. They realized that every economy tended to become unstable as a result of compound interest. We have the training tablets that they trained scribal students with, around 1800 or 1900 BC. They had to calculate: How long does it take debt to double its size, at what we’d call 20% interest? The answer is 5 years. How does long it take to multiply four-fold? The answer is 10 years. How much to multiply 64 times? The answer is 30 years. Well you can imagine how fast the debts grew.

So they knew how the tendency of every society was that people would run up debts. Now when they ran up debts in Sumer and Babylonia, and even in in Judea in Jesus’ time, they didn’t borrow money from money lenders. People owed debts because they were in arrears: They couldn’t pay the fees owed to the palace. We might call them taxes, but they actually were fees for public services. And for beer, for instance. The palace would supply beer and you would run up a tab over the year, to be paid at harvest time on the threshing floor. You also would pay for the boatmen, if you needed to get your harvest delivered by boat. You would pay for draught cattle if you needed them. You’d pay for water. Cornelia Wunsch did one study and found that 75% of the debts, even in neo-Babylonian times around the 5th or 4th century BC, were arrears.

Sometimes the harvest failed. And when the harvest failed, obviously they couldn’t pay their fees and other debts. Hammurabi canceled debts four or five times during his reign. He did this because either the harvest failed or there was a war and people couldn’t pay.

What do you do if you’re a ruler and people can’t pay? One reason they would cancel debts is that most debts were owed to the palace or to the temples, which were under the control of the palace. So you’re canceling debts that are owed to yourself.

Rulers had a good reason for doing this. If they didn’t cancel the debts, then people who owed money would become bondservants to the tax collector or the wealthy creditors, or whoever they owed money to. If they were bondservants, they couldn’t serve in the army. They couldn’t provide the corvée labor duties – the kind of tax that people had to pay in the form of labor. Or they would defect. If you wanted to win a war you had to have a citizenry that had its own land, its own means of support.

Basically what you had in the Bronze Age and every ancient society was a different concept of time than you have today. You had the concept of time as circular. That meant economic renewal. The idea was that every new ruler, every new reign, began time all over again. It wasn’t really time, it was really the economy had to start from a new position of equilibrium. This equilibrium – basically freedom from debt, the ability to support yourself – had to start afresh.

Economists look at ancient Near Eastern history and think: “You couldn’t have had Clean Slates, you couldn’t have canceled the debts, because then you would have had anarchy.” The fact is that proclaiming a Clean Slate was the way to avoid anarchy. It was the way to restore people to self-sufficiency. So in Sumer and in Babylon, every major ruler would proclaim a Clean Slate. We have the records to detail this century after century.

People know Hammurabi’s Laws, that’s in all the textbooks. But those laws were never official: They are more a literary document. What actually had legal binding force – and we know this from the cuneiform court records – were the debt cancellations that Hammurabi proclaimed in the second year of his rule, and later when he went to war with Larsa, and proclaimed it on other occasions.

The word that they used was andurarum, a word that has the sense of “a river flowing.” You sort of restore the flow. It really meant that bond servants were free to go back to their families.

These Clean Slates had three elements: Number one, they would cancel the personal debts – not the business debts, not the debts denominated in silver among merchants and other rich people. These debts were business contracts, and they remained in place. It was the petty debts, the consumer debts, that were canceled. Number two, lands that had been forfeited were restored: the crop rights, if they’d been pledged to creditors. And three, all the human beings who had been pledged as bondservants would be free to return to their families.

This word andurarum reappears in the Bible as the word deror. The Hebrew word is deror, which is obviously a direct cognate. And the jubilee year that appears in Leviticus 25 is a direct translation of Babylonian practice.

There’s a question: What happened between writing the Bible, including the laws about deror, and Jesus? There are hardly any documents, there aren’t any that have come down to us. We don’t know about if there were any jubilee years in Judea.

We don’t know really what happened up until the time of Jesus, except that there was at that time the same war between creditors and debtors that there was in Rome. Every Roman historian of the time – Livy, Plutarch, Diodorus – they all blamed the fall of the Roman republic on the creditors behavior of assassinating the debtors’ leaders, the rule by violence and the takeover of the economy by creditors after centuries of debt war. We know that this was going on throughout the whole ancient world, including in the Near East.

We know that in the very first sermon that Jesus gave when he returned to Nazareth, he went out on the Sabbath to the synagogue, and unrolled the scroll to Isaiah 61 and read that Isaiah, had been sent to preach the good news to the poor. “Good news” translates literally to “Gospel.” And he said it was to proclaim freedom for the captives, and release for the prisoners, and to proclaim the year of the Lord’s favor, deror, which meant, basically, a Clean Slate.

What does this mean? There have been a lot of translations. As the time the King James Bible is translated, and at the time it was translated to other languages, people just thought the year of our Lord meant: “Obey God.” They’re not quite sure what it means. An even greater argument occurs over the Lord’s Prayer. What does it mean: Is he saying forgive us our sins, or forgive us the debts? Well, most of religion’s leaders, certainly the vested interests, say: “He’s talking about sins,” that religion and Christianity is all about sin, it’s not about debt.

Actually, the word for sin and debt is the same in almost every language. Schuld, in German, means the debt as well as the offense or the sin. It’s devoir in French. Basically you had exactly the same duality in meaning Akkadian, the Babylonian language. The reason goes back to an idea, called wergeld in parts of Europe, which is universal – we have it in Babylonia too. If you injure somebody: if you hurt him or you kill him, either you have to go into exile in the city of refuge, or the family gets to kill you, or you settle matters by paying. And the payment – the Schuld or the obligation – expiates you of the sin. So the word for the payment of the offense is the same as the offense, and you’d expect this similarity to occur in every language.

Some of the Qumran [Dead Sea] scrolls really proved that what was at issue was debt. The most important scroll is 11q melchizedek. “Q” is for the Qumran cave where they were found, cave number 11. And in this scroll collects everywhere in the Bible that talks about debt cancellation: deror.

Leviticus 25 is about the year of the jubilee: “Each of you will return to his possession.” In Deuteronomy 15: “Let every creditor release that which he’s lent to his neighbor.” In Isaiah 61: “Release the captives, release the bond servants.” In Psalm 82, the Psalms of David: “God stands in the divine assembly, he’s going to give his judgment. God will judge his people and punish the wicked.” There’s a whole collection and there’s no question that this is what is meant by the idea of debt and sin and obligation.

Well, you can imagine how upset most religions were when they found these scrolls. They said they must be by this sectarian group, the Essenes. They must be a radical group, sort of like the Trotskyists. We can just sort of ignore them. But it turns out now that biblical scholars have found that the Qumran caves seem to be the library of the Temple of Jerusalem. During the wars with Rome they moved the library to the caves of Qumran in order to keep them from being destroyed when the Temple was sacked and burned down. So these scrolls were the very core of Judaic religion.

 The fight of Jesus against the Pharisees was about this. At first Jesus said: “Good to be back in Nazareth, let me read to you about Isaiah.” In Luke 4 says it that this was all very good, and they liked him. But then he began talking about debt cancellation, and they tried to push him off a cliff.

 So basically you have the whole origin of Christianity was a last gasp, a last fight, to try to reimpose this idea of the economic renewal – of a Clean Slate – that goes back at least to the 3rd millennium BC and probably all the way to the Neolithic.

So you have this last attempt to try to get a Clean Slate, and we know what happened to Jesus. His followers were not able to bring it about. So by the 1st and 2nd centuries of our era, what could the Christians do? You’re never going to get the Roman Empire to announce a Clean Slate. As a matter of fact, when the kings of Sparta, at the end of the 3rd millennium BC, tried to cancel the debts, the oligarchs of Greece called in Rome. Rome went to war against Agis, Cleomenes and then Nabis and destroyed Sparta. They were going to fight against anyone who wanted to cancel the debts. Mithridates in Asia Minor in the 1st millennium fought against Rome, canceled the debts, and also killed about 30,000 Romans in the ancient Near East. It was a long bloody fight, and they all lost.

So all the Christians could do was have charity. Well, the problem with charity is that you have to be rich in order to lend to somebody. It’s like what David Graeber did with Strike Debt. You can buy the debt and pay somebody else’s debt and give money away, but that doesn’t really fix the system. The result was, it really was the end times. The choice was: either you’re going to have economic renewal and restore people’s ability to support themselves; or you’re going to have feudalism.

That basically is how the Roman historians described Rome as falling. The debtors were enslaved, not only the debtors but just about everybody was enslaved, put in barracks on the land. Finally, you needed to have a population, so you let people marry and you gave them land rights – and you had slavery develop into serfdom. Well we’re going into a similar situation today, where I think we’re going into a kind of neo-feudalism. The strain of today’s society is as much a debt strain as it was back then.

It’s very funny: If you go into Congress – I was the economic advisor to Dennis Kucinich – you go into Congress and there’s a big mural with Moses in the center and Hammurabi on his right. Well, you know what Moses did? He gave the law. Leviticus, right in the center of Mosaic law, canceled the debt. What did Hammurabi do? Debt cancellation as well. You’re not going to see Congress canceling the debts like that.

If you look at the Liberty Bell, it is inscribed with a quotation from Leviticus 25: “Proclaim liberty throughout all the land.” Well now we have translation problems again. The word really isn’t liberty: The real word means Clean Slate. It means freeing society from debt, letting everybody have their own basic housing and means of self-support. And by striking coincidence, what does the Statue of Liberty do? She’s holding aloft a flame. And in the Babylonian historical records, when Hammurabi would cancel the debts they would say: “The ruler raised the sacred torch.” So here you have a wonderful parallelism.

 It’s been written out of history today. It’s not what you’re taught in Bible school, or in ancient studies, or in economic history. So you have this almost revolution that’s been occurring in Assyriology, in Biblical studies and Hebrew studies, and it’s all kept up among us specialists. It hasn’t become popular at all, because almost everything about the Bronze Age and about the origins of Christianity is abhorrent to the vested interests today.

Dr. Brigitte Kahl:

I want to start by just saying thank you. This kind of interdisciplinary work that you are doing between ancient Near Eastern studies, economics, and Biblical studies is very rare and very important. And I am really overjoyed because that happens very rarely that somebody, especially an economist, talks about Biblical matters so insightfully, and talks about something that through the imposition of the dominant power structure on the reading of the Bible, has been totally suppressed.

 We no longer know about aphesis, the core New Testament term for forgiveness, but that is indeed the term you have brought up: the term for deror, for shmita, for yobul, for all the kind of debt release, for release of people from captivity, for release of land from being given away. And that is very much present in the New Testament. We just have kind of suppressed it. It’s suppressed in the theology that most of us have learned somewhere, and not accidentally.

We pray the Lord’s Prayer: “Forgive us our debts.” But we think, “It’s not really debts, it’s sin.” If you listen to the stories from the New Testament you can see that debt and sin forgiveness are not apart. This separation only happens when Christianity was integrated into the whole system of Constantinian state theology: of an empire that lived on debt mechanisms.

 I do have a question for you. You say very well that the king in the Bible is in a very peculiar position. The King is not a very positive figure in the Bible. In fact, the king is the person who messes everything up. The whole story, the big story of the Bible from Genesis to 2 Kings – basically what we call the Deuteronomistic history – is a history very much focused on debt release: On restoration of what you called the good order, the sustainable economic and also ecological order. The kings could be good for that but they are much more the ones who actually lead to the core tragedy of exile.

 We see this in 2 Chronicles 36:21, where it says the Jews in the Temple are killed, everything goes up in flames, everybody is gone. And now finally the land can go back and have its Sabbath. So it seems to me that this comes very close to what you’re saying: that the Bible draws to conclusion because we went into a misguided economic system that really destroyed the people. That is the disaster that is coming. But again, the king is the one who produced it in the Bible.

And linked to that is another thing that belongs in this whole system: the Sabbath. The Sabbath year is every 7 years, and Jubilee years are every 49 years. The Sabbath is every 7 days. And the Sabbath is basically the Clean Slate day, to use your terminology. It’s a day when people are released. Not only I and my daughter and my son rest, but also my female slaves, my male slaves, and any debt-slaves. And my animals. And every seven years the Earth then, also rests. So the land rests, everybody rests, that means everybody goes back into that equilibrium of original goodness that is established in Genesis 1. So it’s a different social order that is celebrated every seven days, if we take the Sabbath seriously.

So really the movement in the New Testament, it’s not just charity. In the New Testament they have a movement that is more horizontal: that is the collection, where people support each other. And also you had the village economy in the Old Testament. So those are all sort of social movements. I would just like to know from you how you see the intervention from the bottom and how you see the movement from the ground then and its influence in these laws.

Dr. Hudson
:

Society changed drastically from the 3rd and even the 2nd millennium to the 1st millennium, throughout the Near East. If you’re in Babylonia or Sumer and you’re a debt-servant, you’re only going to be free when a new King is inaugurated and proclaims a Clean Slate. Or you wait until there’s a war, or until there’s a crop failure. 

But by the 1st millennium, kings are overthrown in Rome by the aristocracy, which didn’t want any King to have power over them. The same happened in Greece, Rome and every other part of the ancient world. At the time, if you were living in Judea or Israel, you’re going to have a king just like all the other regions. They’re not the kind of kings that are going to cancel the debts. They’re the kind of kings that are going to want to get more and more power in their hands, or their family and their cronies. So what Judaic religion did was take it out of the hands of kings and put it right in the center of Mosaic law. No matter who’s the ruler, no matter what the king does – it doesn’t matter who’s the king – every 50 years you have to have a debt cancellation.

You bring up Deuteronomy, the seventh year. Unlike the case in Babylonia, where we have all of the records that they kept on cuneiform and clay records, the records in the Mediterranean lands haven’t survived. So we don’t know what happened. We just don’t know any details. We don’t know how much of this was actually applied. We do know how widely it was applied in the Near East because we have the lawsuits over it. 

Regarding what you said about communities at those stages and on: Yes, absolutely, you have to band together. That’s the only way you can survive. And yes, you need communalism at a point where everybody is ground down to near poverty, because if you don’t have mutual support, you’re going to succumb.

Rev. Claudia de la Cruz:

I want to thank you, Dr. Hudson for sharing. I think that there is a glimpse of hope in my mind right now in terms of how debt cancellation can be potentially one of the things that folks struggle for.

I want to share what a very important theologian in my life shared, my grandmother: She would say, in Spanish, “No one can possibly become wealthy unless they steal from someone.” And we know that those who are wealthy have stolen from the majority of the population throughout history. And so to be on this panel and be part of this conversation reminds me a lot of everything my grandmother’s taught me, so I’m grateful for that. 

I could speak from my experience as a minister. I could speak from my experience as an educator and an organizer. I’m not an economist, although I appreciate your type of economic analysis.

I just recently participated in a delegation that went to Rome to meet with the Pope, who called a gathering of social movements from around the world. And I was very troubled that I would be going into the Vatican. Because as someone who’s coming from Latin America, I know what imperialism looks like and I know what capitalism looks like. And I was not happy – Willie Baptist could attest to that. I was trying to expropriate the wealth, but that’s another sermon.

 As a Christian – as someone who follows Jesus the revolutionary, the historical figure – it was very troubling for me to go in there and see the amount of wealth that the Church has stolen from the people. And I say the Church with a capital ‘C,’ because there’s also church that’s made in communities that are doing that communal surviving that the Bible teaches us.

As someone who came to this institution, Union, Columbia, I want to ask: How many of you are students? God bless your hearts. Hopefully when you graduate you don’t have the same amount of debt that I do: $110,000 that I will never repay because I have no means to pay it. I was born poor, and I will die poor. And it’s not a condition that God created for me, it’s a condition a capitalist system created.

 And capitalism has taken its forms throughout history. We know now we have finance capitalism, we know global capitalism, and it continues, unfortunately, like the most brutal demon, to re-invent itself. So when I hear you talk about debt cancellation, in my mind I have a question: Is that something that we can strive for?

But if we do strive for it, there’s still a king. There’s still a system in place that will continue to enslave us, every so often. So what is the proposal that comes from us, from communities, from people that are thinking about political economy?

In church we’re taught charity, and from my experience as someone who comes from a church that embraced liberation theology, we always understood that religion does not live in a vacuum. There’s a social, economic, and political system in place that always influences what religion is.

 And so as folks who are, Christians, Jews, whatever our faith tradition is, if we are really on the side of the poor, those who are indebted, those who are made slaves by debt: What is our economic proposal? Because we cannot continue to build on social politics, because charity doesn’t cut it. I could have 10,000 questions, but I have that question: What is the proposal if we understand that even if we strive for debt cancellation, there’ll still be a king in place?

Dr. Michael Hudson:

Many people who oppose debt cancellation try to pooh-pooh the Babylonian and Sumerian cancellation. Samuel Kramer, the right-wing Sumerologist, said they were all failures because once they canceled the debts, they all grew back again. You have to realize that every society is going to run up debts, every society is going to run up bills, every society is going to polarize. So it has to be a permanent, ongoing revolution. You have to continually keep restoring it. Obviously, today, you’re not going to begin with a debt cancellation.

What has caused this basic shift away from debt cancellation is the privatization of credit. In Sumer and Babylonia the temples and the palace were the source of credit. In medieval Japan it also was the temples that were the creditors. Most people ran up debts, in Japan, to the temples for sake – the temples were also sake-makers. There were revolts against the sake-makers to cancel the debts, and they were successful.

The problem is the privatization of credit. The government today could cancel the student debts that are owed to the government. But they can’t cancel the debts that are owed, say, to David Rockefeller or to other banks – to somebody else.

The banks should be a public option, just like health care should be a public option. Even the University of Chicago right-wingers, in the 1930s, proposed a 100% reserve. The idea is that banks should not be able to create credit, meaning create debt. When you create credit, you’re creating somebody’s debt. That should be a government function, because the government can relieve the debts.

The bankruptcy law was re-written in 2005. It made it almost impossible to declare bankruptcy. It used to be you could declare bankruptcy and have a clean slate, on an individual basis, not a social basis, but now even that has been closed here. And for student loans you can’t have bankruptcy at all.

Obviously this has to be a big fight. Dennis Kucinich tried to fight for it and immediately the Democrats redesigned his district, gerrymandered the voting districts to get him out of Congress so that he wouldn’t talk about it anymore. So it’s obviously going to be a very hard fight.

Rev. Dr. Liz Theoharis:

After listening to Dr. Hudson, and my old advisor Dr. Kahl, and my dear friend Claudia de la Cruz, there isn’t much to add. And yet I want to talk a little bit about my favorite passage of the Bible and what this kind of analysis does to a reinterpretation of it. 

It seems to me that since I was a child I have heard almost every week of my life a quote from the Bible: “The poor you will always have with you.” This is in Matthew 26, with parallels in Mark 14 and John 12. And this passage has been used to argue that poverty is inevitable, that it can never be ended, and that my work – my vision – for ending poverty, alongside that of thousands of poor and dispossessed people in this country and across the world, is futile.

I have known since I was little, in the heart of my hearts, that the inevitability of poverty argument is incorrect. But it took me many many years as a scholar and as an activist to understand just why and how it is incorrect, which is why I’m so excited about this discussion.

 The Bible, a text replete with calls for economic justice and denunciations of the scourge of indifference to the poor, has been mis-used and cynically politicized to suggest that poverty is the result of the moral failures of poor people sinning against God. And I say sinning on purpose here. It has been used to say that ending poverty is impossible and that the poor themselves have no role to play in efforts to respond to their poverty.

 All these arguments are predicated on the idea that the cancellation of debts never happened and is completely impossible. And so to me what is so vitally important about the conversation we’re having today is that what I would call the biggest Biblical roadblock to the defining issue of our day – which is poverty, inequality, and the dispossession of the many for the wealth of the few – is upheld by this lack of historical and Biblical analysis.

I want to say a little bit about why this matters, and why particularly talking about debt cancellation really revolutionizes our understanding of the Bible.

I do not believe that we will be able to end poverty until we actually bring things like the cancellation of debts – a reality over thousands of years of history – into the public discussion of what has happened and therefore can happen again. 

The quotation echoes Deuteronomy 15:4-11, which is one of the most liberating sabbath year or Jubilee-connected prescriptions of the Bible. The Jewish Publication Service says that Matthew 26 is quoting Deuteronomy 15:4, but the NRSV says that Matthew 26 is quoting Deuteronomy 15:11. And why does this matter?

Deuteronomy 15:4 says: “You will have no needy person among you if you follow the commandments that I am giving to you today.” And then proceeds to explain what those commandments are. The forgiveness of debts is first. The release of slaves is connected. And the lending of money, even though you know you’ll never get paid back, is third.

 And what does Deuteronomy 15:11 say? First it says: “But you all are a greedy people that will be disobedient to me,” and then: “The poor will never cease to be in the land, so open your hand to the poor and needy neighbor.”

So what Christians have done with “the poor will be with your always,” even when they recognize that it’s a quote of Deuteronomy 15, is to make it a quote about charity. It’s about: “Okay we can’t do anything about it.”

And this is not just conservatives, this is not just reactionaries. This is liberal Christians who say: “We can’t end poverty, Jesus says so. Even when he quotes the Hebrew scriptures, they’re reminding us that we can’t end poverty, we can’t cancel debts, we can’t release slaves, but what we can do is give a little bit of the extra to folks.” Which should sound very familiar to us. This sounds like the solutions that we have on offer for addressing poverty and inequality and dispossession.

 But what’s so important and groundbreaking about the work that Dr. Hudson is doing is to see that you can’t actually read Matthew 26 and Deuteronomy 15:4 and 11 separately. So to me, what’s really helpful, even though there’s a whole history of debating whether this really happened, is the fact that these very radical economic verses are in our scriptures and are regularly referenced, including in this most famous passage about poverty. Jim Wallace says that this is the most famous passage, other people say that this is the most famous passage too, and it somehow trumps all the passages that talk about the release of slaves, the coming here to proclaim a year of God’s favor.

What I think is really important then about this work around debt cancellation in relationship to this really important passage, is to look both at Deuteronomy and the ancient Near East economies that existed beforehand, as well as to look at the Roman Empire and the ancient economy that Jesus was responding to.

To look at Deuteronomy you have to look at terms like sin, which we were just talking about. Where sin is talked about in Deuteronomy, is that it will be considered a sin against God if your brother or sister has to call out against you because you’re robbing their wages or because you’re not releasing their debts or because you’re making them slaves. So this common notion, that people are poor because they’re sinners and not right with God, and that the rich are blessed by God, just does not hold. It does not work.

 And what’s also, to me, very important – and I learned this from the work that Dr. Hudson and Dr. Kahl and others have done – is that you can’t separate the economy from piety. So sin is an economic term and it’s a pietistic term. And so the way that you honor God is by how you care for yourself and your neighbor. And there’s no way of separating those two things.

There’s no way to be right with God if your neighbor is being oppressed. There’s no way for you to do what God requires of you if debts exist in your society. And to me this is one of the things that has been really separated, including from any interpretations of the poor. We somehow preach that Jesus was here to preach good news, but then somehow we separate that from what is the content of that good news: and that is release of slaves, remission of debts, and the year of the Jubilee.

 So to me it changes, radically, this idea that poverty is inevitable, and instead puts the onus on human beings and followers of the scriptures that if poverty exists it’s because you are failing the commandments of God. And it also says that if you continue to do what you’re doing, which is charity and economic repression, then you will always have poverty with you. But don’t put that on God, put that on you and put that on your society and how it’s organized.

And I want to pose the question: How do we bring this into the public consciousness? How do we popularize the very important work that Dr. Hudson and others are doing, to say that debt cancellation is possible, debt cancellation has happened before, and that it’s healthy for our economy to cancel debts.

Walter Brueggemann says that Deuteronomy 15 is one of the most radical parts of the Bible without people really knowing. Because what it says is that forgiving debts, releasing slaves, and lending out money knowing you’ll never get paid back, is what God says is how you will have community prosperity. And so when you say that to communities these days, the ways people have been told that you’re going to have community prosperity is if you save, if you take from somebody else, if you store up your treasure on earth. These kinds of concepts from Deuteronomy 15 are totally foreign, I would say.

 And so to me what’s so important about this work – and then I pose this question of how do we get this out there – says that this is not just an academic question, this isn’t just a theological and Biblical interpretation question, this is a question about life and death in our society today. And if we don’t actually start to see that you’re being disobedient to God and to the scriptures by letting debt play the role that it plays in killing people, then we’re screwed. So I would love to hear a little bit more about what has worked in terms of getting some of this out, and how we all can help with that.

Dr. Michael Hudson:

Well you’re right, that’s the problem: How do you popularize it all? What do you do today? The first thing is I think you have to frame it in the big picture.

The way you get to people is to say: We’re at a turning point in history. If we don’t solve the problem of economic polarization, which is caused mainly by debt, we’re going to go into another dark age. We’re going to have neo-feudalism. We’re going to have neo-serfdom, except that you’re not going to be tied to the land like serfs were. You can live wherever you want, but wherever you are, you’re going to have to pay about 40% of your income just for housing. And you’re going to have to pay for water, and you’re going to have to pay for the other needs. This is the new kind of serfdom. You have to re-frame what the economy is about in a way that people can understand.

And you need a multi-pronged approach to fight on four or five fronts. You need academics so that nobody can say you don’t know what you’re talking about. You need an organ, a periodical; you need books; you need to make use of the Internet; you need films; and you need a political group. You need to institutionalize this idea and give it a critical mass of coherence, and I think that’s what you folks are doing.


Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of Killing the Host (2015), The Bubble and Beyond (2012), Super Imperialism: The Economic Strategy of American Empire (1968 & 2003), Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy (1992 & 2009) and of The Myth of Aid (1971), amongst many others.  He can be reached via his website, mh@michael-hudson.com.

from the archives:

Michael Hudson: Trump’s Infrastructure Plan, and The Idea of Proximity to Russia is All Fake

Socialism: Creating a World to Change Our Lives by Sam Friedman

Rev. Chris Hedges: Christmas, Charity, Anti-Empire and the Revolutionary Jesus + Transcript

Richest 10% Control 89% of World’s Wealth

Michael Hudson: How Long are People Going to be Willing to Live in this Illusion?

Chris Hedges: The Cost of Austerity

The Road to Democracy by Rudo de Ruijter

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12 thoughts on “If We Don’t Solve The Problem Of Economic Polarization, We’re Going To Go Into Another Dark Age by Michael Hudson

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  7. I find Dr. Hudson’s insights to be thrilling. Reading his book was a revelatory experience about the relation of debt and credit to the inequality and instability inherent in our current economic system—an area I previously thought I understood. How unsurprising that banks and credit have been conveniently omitted from mainstream academic economic models, given the political implications of accurately modeling our economies.

    When considered along with the work of Minsky and Wray, it becomes clear how significant is the work being done at Univ. Missouri Kansas City. Thank you, Dr. Hudson!

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  10. Remarkable discourse, replete with crucially important allusions that are so often presumptively misapplied.

    “Finally came the French translations. They got it right: Dominique Charpin translated the Sumerian term as a restoration of order. The word for the clean slate in Sumerian was “amargi” and the root is “ma”: The “mother” of all situations.”

    This a fantastic insight, see for example https://amargigroupistanbul.wordpress.com/about-amargi/information/ an exceptionally ancient and enduring ethical foundation from whence all subsequent human values appear to have emerged.

    “And every seven years the Earth then, also rests.” Ancient wisdom indeed.

    “No one can possibly become wealthy unless they steal from someone.” Of course wealth can also be understood as stewardship, not possession.

    It really all depends on principles of guardianship, fairness, fair shares; ie honour, trust, karma/khamma based on mutual responsibilities in a participatory and respectful context of resilient social & ecological relationships.

    Those can only thrive in reciprocal, open societies that engage with biological and metaphysical realities in convivial ways that are fully experiential, reflexive & transparent, whilst respectful of privacy; yet also (relatively) scalable in terms of possible worlds and their mutual acceptibility in terms of their received effects ~ that is to say, according to recognizably empirical (ontological/’astrological’) potentialities that can be translated into consensual epistemologies (theoretical categories) of internalized experience, formally transmitted from ‘mouth to ear’ across cultural boundaries.

    “The problem is the privatization of credit.” Totally endorse this; there can be no debt without ‘credit.’ By its nature credit is de facto, held in common; or should be. Debt is simply error ~ bad accounting due to incommensurable exchanges. To appropriate credit and privatize it, is to disenfranchise the ‘global commons;’ or what might also be designated ~ indigenous prerogatives.

    This really is theft! Parasitic predation, by organized stealth as inherited ‘privilege.’ You may not own the air I breathe or the water in my blood. That is fundamental moral logic and biospheric fact. I am not obliged to pay rent for oxygen ~ except in China perhaps, where the atmosphere is so polluted it may be a question of life or death whether one can breathe in public without ‘state’ assistance.

    “You need to institutionalize this idea and give it a critical mass of coherence…” Absolutely. The New Economics Foundation for example I’m sure are receptive to this thesis; also DiEM25, as well.

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