- America Needs A Debt Jubilee
by Paul Craig Roberts, https://www.paulcraigroberts.org/
As school children my friends and I were very interested in archaeology and ancient civilizations. We read all the available books. My best friend intended to become an archaeologist and to explore ancient ruins about which we imagined more than we actually knew.
As far as I can discern these days no one in the general population has any thoughts of Sumer, Babylonia, Assyria, Ur. For the American young the 1940s, not 2,500 BC, is the ancient past. A time so long ago that it predates the Old Testament by 2,000 years is probably imagined as a brutal and politically incorrect time of inhumanity and human sacrifice. In short, a script for a horror fantasy movie or a video game.
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.