Jubilee! Bronze Age economics (perhaps we should give it a go, no?)

Michael Hudson, "How Bronze Age Rulers Simply Canceled Debts", Evonomics:

... the Bronze Age and early Western civilization was shaped so differently from what we think of as logical and normal, that one almost has to rewire one’s brain to see how differently the archaic view of economic survival and enterprise was.

Credit economies existed long before money and coinage. These economies were agricultural. Grain was the main means of payment – but it was only paid once a year, at harvest time. You can imagine how awkward it would be to carry around grain in your pocket and measure it out every time you had a beer.

We know how Sumerians and Babylonians paid for their beer (which they drank through straws, and which was cleaner than the local water). The ale-woman marked it up on the tab she kept. The tab had to be paid at harvest time, on the threshing floor, when the grain was nice and fresh. The ale-woman then paid the palace or temple for its advance of wholesale beer for her to retail during the year.

If the crops failed, or if there was a flood or drought, or a military battle, the cultivators couldn’t pay. So what was the ruler to do? If he said, “You owe the tax collector, and can’t pay. Now you have to become his slave and let him foreclose on your land.”

Suddenly, you would have had a slave society. The cultivators couldn’t serve in the army, and couldn’t perform their corvée duties to build local infrastructure.

To avoid this, the ruler simply cancelled the debts (most of which were owed ultimately to the palace and its collectors). The cultivators didn’t have to pay the ale-women. And the ale women didn’t have to pay the palace. [...]

This concept is very hard for Westerners to understand. Yet it was at the center of the Old and New Testaments, in the form of the Jubilee Year – taken out of the hands of kings and placed at the center of Judaic religion.

A contemporary analogy:

A bad international loan to a government is one that the government cannot pay except by imposing austerity on the economy to a degree that output falls, labor is obliged to emigrate to find employment, capital investment declines, and governments are forced to pay creditors by privatizing and selling off the public domain to monopolists.

The analogy in Bronze Age Babylonia was a flight of debtors from the land. Today from Greece to Ukraine, it is a flight of skilled labor and young labor to find work abroad.

No debtor – whether a class of debtors such as students or victims of predatory junk mortgages, or an entire government and national economy – should be obliged to go on the road to and economic suicide and self-destruction in order to pay creditors. The definition of statehood – and hence, international law – should be to put one’s national solvency and self-determination above foreign financial attacks. Ceding financial control should be viewed as a form of warfare, which countries have a legal right to resist as “odious debt” under moral international law.

The basic moral financial principal should be that creditors should bear the hazard for making bad loans that the debtor couldn’t pay — like the IMF loans to Argentina and Greece. The moral hazard is their putting creditor demands over the economy’s survival.

Symposium on Graeber’s Debt

Crooked Timber is running a symposium on David Graeber’s Debt: The First 5000 Years. Contributions so far:

• Seminar on David Graeber’s Debt: The First 5000 Years – Introduction, Chris Bertram
• The unmourned death of the double coincidence, John Quiggan
• The World Economy is not a Tribute System, Henry Farrell
• Debt Jubilee or Global Deleveraging, Barry Finger
• The end of debt, John Quiggan
• The Return of Grand Narrative in the Human Sciences, Neville Morley
• The Dangers of Pricing the Infinite, Malcolm P. Harris, on student debt

All are worth reading, as are many of the comments. I’ll end with the last paragraph from Bertram’s introduction:

Does Graeber find in utopian and democratic resistance to the Axial empires an historic precedent for the Occupy movement to emulate? Perhaps our best possibilities lie not in grand schemes of societal transformation but in developing the “baseline communism” and the democratic instincts that persist even in the heart of modern capitalism. The anarchist writer Colin Ward used a phrase from Ignazio Silone – “the seed beneath the snow” – to make a similar idea vivid. We cannot take the beast on in a direct assault, and nor should we, but we can work together to develop a more human society within the nooks and crannies of the commercial one.

Sounds a bit like a plug for the Transition Movement, which originated in England and has since spread around the world.

We Need a Politics of Jubilee

What I’m thinking is that the Occupy movement is the beginnings of a politics of Jubilee. But I’m getting ahead of myself. What is Jubilee?

Writing in Leviticus as Literature, the late Mary Douglas observes (p. 243): “Release of slaves and cancellation of debts incurred under the preceding regime were common practice for victorious conquerors, a magnanimity that cost them nothing while their rule was new and their power to enforce it recently demonstrated.”

That, the release of slaves and the cancellation of debts, is the basic idea. But what is proposed in Leviticus (25: 10-11) is more radical:

And ye shall hallow the fiftieth year, and proclaim liberty throughout all the land unto all the inhabitants thereof: it shall be a jubile unto you; and ye shall return every man unto his possession, and ye shall return every man unto his family.

A jubile shall that fiftieth year be unto you: ye shall not sow, neither reap that which groweth of itself in it, nor gather the grapes in it of thy vine undressed.

Every fifty years a Jubilee and, while we’re at it, lets give the land a rest, a chance to renew itself. As Douglas goes on to observe, however, the doctrine of a Jubilee every fifty years is

much more controversial and difficult to enforce for an established government. . . . Effectively, it prohibits private accumulation and even accumulation by the temple treasury. It ensures that there will be no gross inequality of wealth-holding. . . . Solidarity will not be undermined by resentment of perceived injustice.

Which is exactly what we have no in this country: The 99% have concluded that the 1% have rigged the action in their favor and they’re going to keep things that way, thank you very much.

The banks got their Jubilee. To be sure, their creditors didn’t forgive them, but the Federal Government provided them with funds to pay their debts. That is to say, you and I bailed them out. And now they’re back to raking it in, hand over fist, while we watch our neighbors loose their home. No Jubilee for us.

Maybe it’s time for Jubilee for us all, and for the land to, the oceans and fields, the mountains and the valleys, and all the living creatures around us. Can we really continue letting the corporate-owned Republicrats running the world for the benefit of a few privileged people?

The way I see it the Occupy movement is the opening call for a Jubilee. No specific demands, no specific proposals, just STOP! Let’s everyone speak up, everyone listen, and figure out how to start over again.