Noel Ignatiev's Blog

Jubilee in Two-O-One-Three

By Richard Greeman
Posted by Noel Ignatiev

Dear Friends,
Happy New Year and thanks to all for encouraging responses to my Christmas Eve Chronicle, ‘Scrooge Accepts Nobel Peace Prize’ (on this blog ). And let’s all thank 12-year-old Victoria Grant, whose video points out that when a bank writes you a $200,000 mortgage (against which you will pay back $400,000 over time) the bankers are actually creating those dollars ‘out of thin air,’ not bringing them up from some imaginary underground vault.  ‘Out of the mouths of babes…’ as they say.

Indeed, as Victoria demonstrates, the sacrosanct ‘Debt’ consists
mainly of accumulated interest. It is made up of bankers’ profits
piled upon bankers’ profits, as a result of what our Jr. High math
teacher called the ‘miracle of compound interest’. Now that the
proverbial child has pointed her finger at the nakedness of the
Emperor of Debt, let us celebrate the New Year 2013 by peeking
underneath the  ‘New Clothes’ woven for him by the shady Wall Street
operators and their flim-flam artists in Washington.  What we find
there turns out to be an old, old story.

The Eternal Class War Between Debtors and Creditors

According to Economic Anthropologist David Graeber, the struggle
between creditors and debtors has been going on for at least 5000
years. The earliest written records, clay tablets dating from
Mesopotemia c. 3200 B.C. indicte a money economy based on lending at
interest, with debt-collection enforced by moral sanction and
ultimately by legal violence. Apparently the earliest loans were to
merchants undertaking trading voyages, « but this gave the merchants
and temple administrators and other well-off types the opportunity to
make consumer loans to farmers, and then, if say the harvest was bad,
everybody would start falling into debt-traps.’

The familiar Old Testament story of Joseph’s triumph as Pharoah’s
‘Finance Minister’ during the Seven Lean Years illustrated this
process. We all remember how, under Joseph, year after year Pharoah’s
priestly-military-royal bureaucracy legally expropriated first the
cattle, then the lands and ultimately the freedom of the Egyptian
peasantry through debt peonage based on Pharosh’s monopoly of the
wealth accumulated during the Seven Fat Years Joseph had foreseen in
Pharoah’s dream.

This process, according to Graeber, ‘was the great social evil of
antiquity – families would have to start pawning off their flocks,
fields and before long, their wives and children would be taken off
into debt peonage.” The same cruel practice is again common in the
21st Century, notoriously in S.E. Asia, where poor farmers (often
indebted to pay for patented seeds produced by Montsanto) are obliged
to sell their daughters into prostitution to pay off usurers. In the
affluent U.S., a precident-making N.J. court decision forced a poor
women to give up her newborn baby to a rich lawyer for whom she had
agreed to act as a ‘surrogate mother.’ She was willing to return the
money, but the court ruled that a legal contract trumped the love of a
woman for the child she has nurtured in her womb and the lawyer got
his ‘pound of flesh.’

Ancient and Modern ‘Proletarians’

In ancient Rome, the word ‘proletarian’  originally described free
Roman workers who had nothing left to sell but themselves (as slaves
or wage-workers) and their children. In 19th Century Marxist parlance,
‘proletarian’ denoted hourly wage workers and low-level salaried
employees who, landless and with mouths to feed, are obliged to sell
their labor power to a capitalist for less value than the employer can
squeeze out of them. Today, many such ‘wage-slaves’ can also be
described as debt peons working extra jobs to pay off the balooning
mortages, usurious (35%) credit-card payments, and huge student loans
that make banking so profitable.

In the U.S., student loans have apparently surpassed mortgages as the
biggest source of bank profits based on private debt. A whole
generation is being held hostage to the banks, thanks to tricky
regulations where the public funds the students’ grants, yet the banks
who ‘administer’ them get to collect interest and pile up profits year
after year.  Students, whose job prospects have shrunk drastically
since the banker-induced Crash of 2008, are typically falling farther
and farther behind on their inflating payments as interest upon
interest accumulates, turning a $20,000 debt at graduation into a
$70,000 albatros ten years later. These students have no prospect of
bankruptcy protection, thanks to another tricky new law, and so they
may have to continue working past retirement age in order to keep
paying for their student loans.  Student debt suicides are the U.S.
version of the small farmer debt suicides in South East Asia.

Why Has Post-Modern Capitalism Reverted to Usury?

What is the underlying reason behind the current frenzy to fetishize
debt — both in Euroland and under the American Fiscal Cliff?  Why
has ‘paying the Debt’ suddenly replaced ‘growth’ and ‘jobs’ as the
economists’ sumum bonum ? Investors have understood that since the
Crash of 2008, real economic growth has slowed to a near standstill.
With shrinking consumer markets, it is no longer profitable to invest
fresh capital in mass production. Hence the domination of the
financial sectors of credit and speculation. This return to usury
represents an historic regression from the days of growth-driven
capitalist expansion, when unions and corporations fought over shares
of an ever-larger pie. Now, in the 21st Century, Detroit has reverted
to farmland and Henry Ford has been replaced by the debt collector.

Regression from the more progressive days of capitalist expansion is
also evident in non-economic fields, from the recrudescence of
fanatical religions, the denial of scientific evidence, the
militarization of society, the spread of new imperial rivalries and
civil wars, the increase of rape and degradation of women. Indeed, in
today’s post-modern globalized economy, slavery and human trafficking
are once again common economic practices. A recent N.Y. Times op-ed
asked ‘How many slaves work for you?’  The author, Louis Masur,
‘discovered that 60 slaves work for me — cutting the tropical wood for
my furniture, harvesting the Central Asian cotton in my shirts or
mining the African precious metals used in my electronics.’
Professor Masur, himself a Lincoln specialist, was using the 150th
anniversary of the Emancipation Proclamation, to draw attention to the
scandal of contemporary chattle slavery, but his outrage applies to
contemporary debt-peonage as well, whether among Asian farmers or U.S.
students. Masur recalls how Jan. 1, 1863 was celebrated by Blacks as
The Day of Jubilee.  At a midnight gathering of runaway slaves in
Washington, a man named Thornton wept: “Tomorrow my child is to be
sold never more.” [… ] Perhaps the most radical aspect of Lincoln’s
Emancipation is that it refused to indemnify the former slave owners
for the confiscation of their ‘property.’ In contrast, the French
government insisted on compensation from the slaves who liberated
Haiti in 1804, with the result that as late as the 1930s, the Haitian
Republic was still making vast reparation payments (including
accumulated interest) to the French Republic.

What About A New Emancipation Proclamation?

Although President Obama has been, through the slight of hand of
Steven Speilberg’s fictional Lincoln, projected as a modern
incarnation of the Great Emanicipator, the Great Compromiser who just
saved us from the self-inflicted ‘Fiscal Cliff’ by preserving almost
all of the Bush tax cuts for the super rich. Banker-friendly Barak is
therefore unlikely to emulate Honest Abe and emancipate today’s
students, homeowners and ‘proletarians’ from eternal debt-peonage to
the ‘too-big-to-fail’ banks our taxes keep afloat. So maybe we will
have to take matters into our own hands.

After all, as opposed to Speilberg’s skewered account of Emancipation
as a last minute inside-the-beltway political deal among old white
men, the historic Lincoln’s decision was based on the
self-emancipation of many thousands of runaway slaves, 200,000 of whom
had joined the Union Army and were in the process of liberating the
South. So, we may ask, if chattle slaves can emancipate themselves,
why can’t debt-slaves?  Again, ancient economic history gives us a

Time to Wash the Tablets

According to Economic Anthropologist Graeber, class conflits between
debtors and creditors also goes back to the dawn of recorded history,
predating by four and a half millenia those of our relatively brief
capitalist era whose 500-year cycle (1492-2008) appears to be coming
to a close with regression to usury and barbarism. From the beginning,
creditors made repayment a sacred moral obligation. Indeed, “in
Sanskrit, Hebrew, Aramaic, ‘debt,’ ‘guilt,’ and ‘sin’ are actually the
same word.” Then, as now, when morality failed, legal violence was
generally on the side of the debt-collectors … until rebellious
debtors turned the tables on them.

Often people would start abandoning the cities entirely, joining
semi-nomadic bands, threatening to come back in force and overturn the
existing order entirely. Rulers would regularly conclude the only way
to prevent complete social breakdown was to declare a clean slate or
‘washing of the tablets,’ they’d cancel all consumer debt and just
start over. In fact, the first recorded word for ‘freedom’ in any
human language is the Sumerian amargi, a word for debt-freedom, and by
extension freedom more generally, which literally means ‘return to
mother,’ since when they declared a clean slate, all the debt peons
would get to go home.

Today, with debt-collection and fiscal austerity the ‘categorical
imperatives’ of U.S. and European politics, the age-old debtors’ dream
of ‘washing the tablets,’ of a Jubilee Year of debt forgiveness
(revived during the Great Depression by Gov. Huey Long in Louisiana)
are again coming to the fore, along with modern ideas like debtors’
cartels and debt strikes (notably among students), and the Occupy
offshoot ‘Rolling Jubilee’ a fund that buys up peoples’ bad debts for
pennies on the dollar and ‘forgives’ them.

Jubilee in Two-O-One-Three!

In 2010 and 2011, the population of once-prosperous Iceland, ruin by
its bankers’ speculations, voted overwhelmingly in two successive
referendums to renege on a government bailout agreement under which
each Islander would have had to pitch in 100€ a month for eight years
to repay debts to British and Dutch banks incurred by Icesave bank.
Iceland did not disappear under the sea, nor did Her Majesty’s Navy
send any gunboats to collect for the British banks as in days of yore.
Indeed, Island’s economy recovered : another well-kept open secret
that apparently only 12-year-old Canadian girls are smart enough to
pay attention to. So what better way for Humanity to celebrate New
Year’s 2013 and the 150th anniversary of the Emancipation Proclamation
than by tearing up our paper chains, proclaiming universal
Emancipation from the Debt and going ‘home’ to freedom ?

Richard Greeman

Back to Noel Ignatiev’s Author Page | Back to Richard Greeman’s Author Page