History Shows When Rich Get Richer, You Need A Reset Button

It's been interesting watching the decline of arguably the most racist, most violent society on the face of the planet. Interesting, and painful (cf "White on White Crime, And The Diseases Of Despair").

On the one hand you have elected officials falling all over themselves to give handouts to wealthy corporations, and on the other hand you have hard working young adults who fear they will never get out from under the burdens of their college debts. 

More than one thinker has posited that forgiving student loans would be not only humane but also an enormous boost to the economy.

Solvent 20 and 30-somethings could contemplate home ownership, or start a business.

Turns out this is not a particularly new idea.

New to me but probably not to many of my readers is the work of economic historian Michael Hudson. I read an interview with him on the subject of Bronze Age debt forgiveness that contained some of the most interesting Biblical exegesis I've yet encountered. Hudson sees this contested manuscript as being essentially a record of various debt forgiveness schemes in ancient times. And the struggle between the lords and the peons over the suspension of certain kinds of debts, especially unpaid taxes and agricultural liens.

Drawing of a farmer suicide in India published with the caption "Do you care for us?" krishidesh.com

The demise of small farmers by way of excessive debt, and its common consequence suicide, is a global problem. I no longer have it in me to be out after dark on a school night, but if I did I'd love to protest the appearance by World Bank CEO Kristina Georgieva this Sunday night at Colby College. Maybe some of the young farmers who are revitalizing Maine's local economy will show up and picket. Naw, they're up at dawn too, and this is a very busy time of year for them. They really could not be working any harder than they already do.

But the corporate media, owned and operated by the very wealthy, will continue spreading the lie that poor people could become solvent by becoming more virtuous: diligent, thrifty, self-disciplined. It's their own fault they're sick but have no health insurance, broke but have no savings account, homeless and hungry. They should pull themselves up by their bootstraps, right?


Blaming poor people for being poor makes for effective propaganda but bad economic policy.

According to Hudson, ancient rulers would forgive the debts owed to the regime as each ascended to the throne. Business debts weren't cancelled, but unpaid bills and taxes were. The rulers did this, not out of compassion, but for a pragmatic reason: debt-burdened peasants weren't free to labor (for free) on royal fields or to go into the military. Hudson sees Jesus of Nazareth as a rabbi in the tradition of rebellion against the Roman empire's abandonment of debt Jubilees. Hudson describes how their predecessors the Spartans collapsed their economy with similarly wrong-headed policies on debt.

He may be wrong, and I don't know enough to dispute his claims. But it seems clear to me that the poor people around me keep getting poorer while the rich keep getting richer. And that this is has been a problem in many of the societies I've learned about being a student of history these many decades.

The U.S. empire has a hard time finding enough soldiers to carry out its wars for resources and colonies. The last draft was a disaster in terms of eroding public support for the military, and the all volunteer scheme struggles along. Some theorize that the reason post secondary education is kept out of reach except for the wealthy in the 21st century is that the number one motivator cited for enlistment in the military: pay for college.

Source: Occupy Wall Street

Ironically, student debt is now dragging the whole economy down. Hudson argues that we have never recovered from the crash of 2008, when banks got bailed out and the rest of us got sold out. Debt forgiveness could be a path forward.