Finance caused the fall of Rome
A politics of protecting contracts and property is a civilizational suicide pact.
It’s hard to overstate the impact that David Graeber’s 2012 blockbuster Debt: The First Five Thousand Years had on society; it’s a truly magesterial history of the way that debt — and debt forgiveness — played in the establishment of advanced civilization and its downfall:
Graeber — a key Occupy activist who helped coin “We are the 99%” — drew heavily on the scholarship of Michael Hudson, an economic historian, who led a team of Harvard assyriologists, Egyptologists and archaeologists in a major project exploring the role of debt in antiquity.
Core to Hudson and Graeber’s work is the recognition that societies can be divided into “debtors” and “creditors,” and, depending on which group is favored by policy, different kinds of enduring, intergenerational social roles emerge. If we give primacy to creditors’ claims above all, then debtors will inevitably fall deeper and deeper into debt, and eventually become indentured servants to their creditors.
For example, since Babylonian times, farmers have borrowed — seed, labor and other inputs — against the year’s coming crop. This is built into the nature of agriculture — you need stock to sow, which is multiplied by cultivation and then reaped. But farming is also subject to unforseeable strokes of bad luck: blights, droughts, storms, and more. When these occur, the farmer can’t make good on their debts.
Hudson’s maxim is “debts that can’t be paid, won’t be paid.” A farmer who loses a crop and falls deeper into debt to sow the next year’s crop will find themselves even further indebted as interest payments swamp even a bumper crop. The next year, things are worse — and then worse again.
Everyone who does productive work will eventually run up against bad luck. The mason’s stone will shatter, the smith’s forge will catch fire, the herder’s animals will sicken. If creditors are always protected, then eventually ever debtor will land at the bottom of an inescapable pit of debt, which their children and…