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I Meet the Leading Authority on the Babylonian and Near East Tradition of Debt Cancellation
Copy of a regular newsletter by Boudewijn Wegerif, Sweden
WHAT MATTERS-77 --April 12, 2002
I Meet the Leading Authority on the Babylonian and Near East Tradition of
Debt Cancellation
________________________
Dear list members,
Yesterday I was with an American economist who says of himself that he is a
Marxist, whose godfather was Leon Trotsky, whose father was thrown in prison
in the US in 1941 for advocating the overthrow of the government, who has
worked for the Chase Manhattan Bank as their balance of payments expert, and
who is now an authority on the Babylonian and Near East tradition of debt
cancellation. I was with someone who in another guise, as musician, once
auditioned to conduct the orchestra of the Stockholm Opera Company: -
someone whom I had been told I would find extremely rude, with a verbal bite
as sharp as his bark, and who I found, in fact, to be as sensitive and
friendly as I like to imagine myself to be.
I had come from Sweden to London to meet this man and hear him talk to an
audience of Christian monetary reformers on the history of debt forgiveness.
I am referring to Michael Hudson, or if you like, Professor Michael Hudson,
whom I have written about on a number of occasions as having something
important to say about how Judaism and Christianity have their roots in
economics, and specifically debt management.
Michael Hudson went on from working for Chase Manhattan to teaching
international finance at the Graduate Faculty of the New School for Social
Research and Bronze Age archaeology at the New York University Institute of
Fine Arts. His latest assignment is to coordinate the research and be the
co-editor of the published books of the International Scholar Conference on
Ancient Near Eastern Economies (ISCANEE) and the Institute for the Study of
Long-Term Management Trends (ISLET).
I first came across Michael Hudson's work through a small booklet, The Lost
Tradition of Biblical Debt Cancellation, based on research that he had done
at Harvard University on Babylonian economic history. In my review of the
booklet I wrote that we might have the bottom line here to understanding
what Judaism and the Jesus event were really about.
"The implication is that there was a call on Judaism to establish a
tradition of clean slate debt cancellations and land restitution," I wrote,
"and on the followers of Jesus to see his remonstration against the
moneychangers and merchants in this light. It also means that until the call
for an economic clean slate is taken up and followed through on, there will
be ever greater poverty and desolation radiating out from centres of
increasingly obscene wealth" (PS1).
I came away from yesterday's meeting with Michael Hudson more definitely
convinced of this.
You will be hearing a lot more from me about the Clean Slate challenge in
future E-letters. Here I simply want to introduce you to Michael Hudson, out
of our meeting in the morning, and to share a few highlights from his talk
and the interesting discussion that followed it.
Michael Hudson is a fifth generation American, with Red Indian Chipawa blood
in his veins from his mother's side. He was born in Minneapolis in 1939. His
father was a trade unionist and leading light in the civic management of
what Michael describes as "the only city in the world run by Trotskyites."
The money establishment was, understandably, not very happy about this.
Michael was just two years old when his father was made a political
prisoner. His early childhood will have been traumatic, lightened by the
study of music. This was never going to be satisfactory as a career,
however, because of his wanting to get to grips with understanding the
causes of the social-economic injustice that his father, as a follower of
Leon Trotsky (1879-1940), was not shy to confront.
It was not easy for Michael to choose between being a pianist-cum-conductor
and being an economist. One could say that the choice was made for him
through the success of his book, "Super-Imperialism, the Economic Strategy
of American Empire," published in 1972, and now being updated for the
umpteenth time, for reissue by Pluto Books in November.
A talk Michael gave on Super-Imperialism in the early 1970s led to his being
invited to join the Hudson Institute team of researchers around Hermann
Kahn, who was advising the White House on future economic trends. I raised
an eyebrow on hearing this and Michael explained, "In Super-Imperialism I
expose how the US financed the Vietnam War with European funds. This was
useful information, for more rip offs."
"And how did Europe finance the Vietnam War?" I asked. "Easy," said Michael.
"After Nixon delinked the dollar from gold [in August 1971], the US ran up a
huge trade deficit with the rest of the world. This left the European
central banks with loads of dollars, which were only good for buying US
treasury bills." And that is the way it is still today.
This is an over-simplification, of course, out of a discussion in the noisy
Methodist Central Hall basement cafe, off Parliament Square. However, it was
a nice entrée to the main fare at the Charing Cross Hotel in the evening.
The meeting of about 70 people was organised by the Christian Council for
Monetary Justice - (PS2). I was delighted to hear Michael introduce his talk
with an account of how Jesus declared the intent of his ministry in his
hometown synagogue by reading from the prophet Isaiah, chapter 61:
"The spirit of the Lord is on me
because he has anointed me;
he has sent me to announce good news to the poor,
to proclaim release for prisoners
and recovery of sight for the blind;
to let the broken victims go free,
to proclaim the year of the Lord's favour."
His audience will have known that when Isaiah, and Jesus inspired by the
same spirit, proclaimed the "year of the Lord's favour", the reference was
to the Sabbath Year cancellation of debts and the Jubilee Year restitution
of land (PS3).
We have to understand, said Michael, that Jesus was addressing a situation
in which more than 25 percent of the farmland was pledged to usurers. And we
need to understand how every major religion is essentially about how to
handle debt - a word that in northern European languages also means guilt.
Michael went on to ask how it is that Christianity, from being rooted in the
economy, for the sanctification of credit - i.e. trust - came to be so
other-worldly?
As he sees it, much of the change is a product of the Reformation against
the economic abuse of Rome. In his notes for the talk, Michael writes about
how Martin Luther accused the princes of Rome of behaving like princes of
the world rather than princes of God. Rome had been draining European realms
of tribute for over 500 years, through the notorious Peters' Pence and other
charges such as the sale of indulgences. In this Rome was backed up by the
usurious practices of Italian banking families, which it sponsored and was
taken over by. Luther sought to limit Rome's acquisitive tactics. He sought
to contain papal ambitions by demanding that the Roman Church confine itself
to concerns of the next world, not that of the living.
"Inevitably," notes Michael Hudson, "this idea was retrojected back to the
origins of Christianity and religion generally, to portray Luther's
political program as having always been relevant historically. Yet this
perspective was anything but historical. Jesus did not come into this world
to give hope for the next world, but to announce a program for the earthly
realm itself. That was why he cited Isaiah, at what Luke represents as the
start of his ministry, immediately after the baptism and his 40-day sojourn
in the wilderness."
It is an interesting argument, open to discussion. Which could easily lead
one away from the core message. Before reacting, therefore, please do read
my review of Hudson's work on the origins of debt and debt cancellation in
the two essays Clean Slate and Hard Economic Facts (PS1). The important
point is to appreciate how it is in the nature of money - especially
interest-bearing money - to generate ever-mounting debt, and how Judaism,
Christianity and Islam are essentially about stopping the debt/guilt=sin
process.
In the discussion that followed on Michael Hudson's talk, there were some
interesting points made by members of the audience, and by Michael in his
responses.
# It seems that there is a Law of Fraudulent Conveyance in the US (or in
New York state, at least, so Wall Street) by which debts entered into when
it is known that the debtor will not be able to repay the debt can be
declared illegal. Almost all, if not all, national debts are now of this
order, with new debt taken on to finance the servicing of unrepayable old
debts.
# Not just the ruling transnational plutocracy, but the power elites of
the third world countries also are not in a great hurry to set aside the
impossible debt burdens, because servicing them involves the continuous
devaluation of the local currency, and with that ever-declining, exploitable
labour costs and land prices.
# One way of dealing with Third World debt, suggested the ex-banker and
author of Honest Money, John Tomlinson, is for the debtor countries to be
allowed to service their debts in their own currencies. Since this paper
money will be totally useless internationally, the creditors will have no
option but to spend/invest the money locally.
# In support of this, another member of the audience, George Talbot, said
that debts build up because people make savings. As John Maynard Keynes, the
leader of the British delegation at Bretton Woods, made clear, mechanisms
are needed to ensure that surplus savings are spent in the countries and
localities where they are generated. "One cannot make savings that do not
have their counterpart in investments."
# "The debt issue effects every aspect of the economy," said Michael
Hudson, in his concluding statement. "You have to change the whole system,
in its entirety, and this requires a preparatory period of training in
systems analysis, for an overall plan to emerge, which all can agree to."
Basic to the overall plan would be the clean slate cancellation of debts,
not out of charity, but for economic survival, out of enlightened
self-interest.
The churches in still nominally Christian Europe and the Americas should be
challenging the world with this message. Why aren't they? For me, the answer
to that is that the church leaderships are not being pressed to do so by
determined lay members.
To build up the determination requires a programme of seminars and talks,
based on the research and proposals of Michael Hudson, and also Michael
Rowbotham, Bernard Lietaer, James Robertson, Joseph Huber, John Tomlinson,
Richard Douthwaite, Thomas Greco and other monetary reformers.
In friendship,
Boudewijn Wegerif
What Matters Programme
Folkhogskola Vardingeby **
PS1 - http://www.whatmattersnu/cleanslate.html . See also the article Hard
Economic Facts, at http://www.whatmatters.nu/hef.html
PS2 - Christian Council for Monetary Justice, open to all on the basis of a
£10 ($15) annual subscription. To join, E-mail the General Secretary Colin
J. Whitmill - seejyw@onetel.net.uk. The CCMJ web site http://go.to/ccmj -
is due for a revamp. The officers list and events diary is out of date, but
the other information is still useful.
PS3 - Luke 4- 18/19, Isaiah 61: 1-2. See also Deuteronomy 15: 1 and
Leviticus 25.
_______________________
This E-letter is posted at
http://www.whatmatters.nu/wmemails/wmemails15.html#WM-77
** The What Matters Programme is an initiative by Boudewijn Wegerif, to
spread information about what is happening in the world today, and how
things could be, given a schooling at all levels to free the self and the
world from debt/guilt oppression and money madness - a schooling for love.
The trustees of the What Matters Programme are the collegiate of
Folkhögskola Vårdinge By, an adult education residential college south of
Stockholm.
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Michael Hudson is a former Wall Street economist specializing in the balance of payments and real estate at the Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson, and later at the Hudson Institute (no relation). In 1990 he helped established the world’s first sovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR). A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his website, mh@michael-hudson.com
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