PCR writes about an ancient practice, one we could sorely use today in America.
In actual fact, these civilizations were more advanced and more humanitarian than our own. They were more advanced because the rulers were focused on ensuring the society’s longevity by maintaining a livable balance between debtors and creditors. It has all been downhill ever since.
The rulers maintained social balance and, thereby, the life of the society by periodically cancelling debts. The rulers understood that compound interest resulted in debt growing faster than the economy. The consequence would be foreclosures on agricultural land, which would shift riches and power into a small oligarchy of creditors. The ruler and the society would be deprived of a self-supporting population on the land which provided tax revenues, soldiers for the military, and corvee labor to maintain public infrastructure. Disaster would follow. A grasping oligarchy could overthrow the ruler or the dispossessed population could flee to a potential invader offering their military services in exchange for debt forgiveness.
To protect their societies from dissolution by unpayable debts, rulers periodically cancelled agrarian debts owed by the citizenry at large, but not mercantile debts among businessmen.
The reason for debt forgiveness was stability, not egalitarianism.
One difference between the debts of then, there, and now and here, is that the ancients generally had debts based in actual currency, debased to a degree perhaps, but based nonetheless. Ours, in contrast, is pure fiat, wished into being by a cartel of financial criminals. What can be made with a wish, could easily be wished away. But, that’s wishing for a lot.
In America today the population is drowning in unpayable debts—student loan debt, credit card debt, home mortgage debt, state and local government debt, and business debt—but policymakers have reserved forgiveness only for the debt associated with the bad and irresponsible investments of the big banks and financial institutions. The Federal Reserve printed $4 trillion to buy up the banks’ bad debt while permitting ten million homeowners to be foreclosed. Student loan debt prevents university graduates from forming independent households. Mortgage and credit card debt prevents households from having discretionary income with which to drive retail sales. But modern day economics has no prescription for preventing our society from failing from debt overload.
In the US today we have a situation in which the New York banks control Federal Reserve policy and financial legislation—the deregulation of the banking system and its subsequent bailout, for example. We have a situation in which monopolies, monopsonies, and oligopolies are stronger than the central government, which is unable to rein them in or act against them in any way. Corporations dispossess citizens of their jobs by offshoring the jobs. Creditor demands prevent university graduates from forming households. Debt service preempts retail demand except by further debt expansion.
This is an economy headed down, not up. Clearly, Hammurabi did far better for the Babylonians than Washington can do for Americans.
Cue Darth Sidious: “Wipe [the debts out]. All of them.” Make debt illegal, usurious lending a capital felony.