by John Siman
April 02, 2019
them their Debts - Lending, Foreclosure
from Bronze Age Finance to the Jubilee Year",
in November of
Michael Hudson about his Forthcoming Book
Collapse of Antiquity'...
Part 1 - The Delphic Oracle as their 'Davos'
Michael, in the first
volume of your history of debt - "…
and Forgive Them their Debts",
dealing with the Bronze Age Near East, Judaism and early
Christianity - you showed how over thousands of years, going
back to the invention of interest-bearing loans in Mesopotamia
in the third millennium BC, many kings from a variety of
Mesopotamian civilizations proclaimed
Clean Slate debt
cancellations on a more or less regular basis.
And you showed that
these royal proclamations of debt amnesty rescued the lower
classes from debt bondage, maintaining a workable economic
balance over many centuries.
Because these kings
were so powerful - and, let's say, enlightened - they were able
to prevent the social and economic polarization that is
inevitable when there is no check on an oligarchic creditor
class extracting exponentially increasing interest from debtors.
But now, as you write the second volume, your theme gets turned
You are showing how
the Greeks and the Romans learned about interest-bearing debt
from their contacts with Middle Eastern civilizations, but
tragically failed to institute programs of Clean Slate debt
Their failure has
been a kind of albatross around the neck of Western economies
So I'd like to start this conversation in the late 500s BC,
because we can see at that time the beginnings of both the
Athenian democracy and the Roman Republic, plus of two more
First was the
Athens of Cleisthenes, who had led the overthrow the
"tyrant" Hippias and became the father of Athenian
was the Roman Republic of Lucius Junius Brutus, who
overthrew the last of Rome's legendary kings, the
"tyrant" Tarquinius Superbus.
Third was the
Persian civilization of Cyrus the Great. He was a
"divine king," in many ways in the ancient tradition of
the post-exilic Jews of Ezra and Nehemiah, who returned
to Jerusalem, rebuilt the Temple and redacted the Bible.
They were the
inventors of the Jubilee years of Clean Slate debt
forgiveness, even though they depicted the teaching as
coming from Moses.
So, beginning with the late 500s BC, to what extent was the
notion of Clean Slate debt amnesty remembered, and to what
extent was it rejected?
Every kind of reform,
from Mesopotamia to Greece, was put forth as if it simply
restored the way things were in the beginning.
There was no concept
of linear progress in Antiquity. They thought that there was
only one way to do things, so any reform must be the way the
world was meant to be in the very beginning.
All reformers would
say that in the beginning everybody must have been equal. Their reform was
aimed at restoring this state of affairs.
That's why, when Plutarch and even the Spartan kings in the
third century BC talked about canceling debts and promoting
equality, they said that they were simply restoring the original
system that Lycurgus had created.
But there was no sign that
Lycurgus had really done these things. It was made up.
Lycurgus was a legendary figure. So was Moses in the Jewish
When the Bible was
redacted and put together after the return from Babylon, they
put debt cancellation and land redistribution - the Jubilee Year
- right in the center of Mosaic Law.
So it seemed that
this was not an innovation, but what Moses said in the
beginning. They created a Moses figure much like the Greeks
created a Lycurgus figure.
They said that this is how things
were meant to be. This is how it was in
the beginning - and it just happened to be their own program.
This was a projection backwards:
wrote that Athenian history was that way, basically party
pamphleteering projecting their ideal program back to Solon or
to whomever one might choose as a good guy to model.
Writers would then
say that this original good guy supported the program that they
were proposing in their epoch. This was the ancient analogy to
"Constitutional Originalism" in the United States as a frame for
JS: So, ever since the 500s BC, the surefire way to
critique the status quo has been to say you are trying to go
back to the Garden of Eden or to some other pristine Saturnian
MH: Yes, you want to say that the unfair world around you isn't
what was meant, so this couldn't have been the original plan,
because the past had to be a successful takeoff.
So the program
that reformers always turned out to be what the Founding Fathers
JS: That's very inspirational!
MH: The key is to appear as a conservative, not a radical.
accuse the existing status quo as being the beneficiaries of the
radicals who have distorted the original Fair Plan that you're
trying to restore.
JS: So in the 500s BC we have Cyrus - and his inscription on the
Cyrus Cylinder - boasting that he freed the Babylonians from
their tax debt and bonds, and we have the post-exilic Jews
proclaiming d'ror [דְּרֹ֛ור] in Leviticus 25, proclaiming,
"liberty throughout the land."
We also have the reforms of
Cleisthenes in Athens, isonomia [ἰσονομία, literally, equality
under the law], a genuine attempt at democracy.
But let's start
with Rome. What do you want to say about the nova libertas, the
"new liberty" proclaimed in Rome after the last king was
expelled and the Republic was founded?
Didn't Brutus and his
wellborn friends boast that they were the institutors of true
MH: Liberty for them was the liberty to destroy that of the
population at large.
Instead of cancelling debts and restoring
land tenure to the population, the oligarchy created the Senate
that protected the right of creditors to enslave labor and seize
public as well as private lands (just as had occurred in Athens
Instead of restoring a
status quo ante of free
cultivators - free of debt and tax obligations, as Sumerian amargi and Babylonian
misharumand andurarum meant - the Roman
oligarchy accused anyone of supporting debtor rights and
opposing its land grabs of "seeking kingship."
Such men were
murdered, century after century.
Rome was turned into an oligarchy, an autocracy of the
senatorial families. Their "liberty" was an early example of
It was to destroy everybody else's
liberty so they could grab whatever they could, enslave the
debtors and create the polarized society that Rome became.
JS: OK, but this program worked.
The Republic grew and grew and
conquered everyone else for century after century. Then the Principate became the supreme power in the Western world for
several more centuries.
MH: It worked by looting and stripping other societies.
only continue as long as there is some society to loot and
destroy. Once there were no more kingdoms for Rome to destroy,
it collapsed from within. It was basically a looting economy.
And it didn't do more than the British colonialists did:
scratched the surface.
It didn't put in place the means of
production that would create enough money for them to grow
Essentially, Rome was a
financial rentier state.
Rentiers don't create production. They live off existing
production, they don't create it.
That's why the classical
economists said they were supporting industrial capitalists, not
British landlords, not monopolists and not predatory banks.
JS: This has all been forgotten, both in the United
States and in England...
MH: Let's say, expurgated from the curriculum.
JS: Worse than forgotten!
MH: That's why you don't have any history of economic thought
taught anymore in the United States.
Because then you'd see that
Adam Smith, John Stuart Mill and the "Ricardian socialists" and
indeed most of the 19th century had a completely opposite idea
of what constituted a free market.
JS: Opposite? How so?
MH: Opposite from the neoliberal idea that freedom means
the wealthy to indebt and destroy the economy. Opposite from
the liberty of Brutus to overthrow the Roman kings and establish
an autocratic oligarchy.
JS: So do we want to see the Roman kings as defenders of the
people - defending them from predatory oligarchs?
MH: Yes, especially
There was a great flowering
of Rome, making it attractive to immigrants by making the city
livable for newcomers. They did this because at that time, in
the 6th century BC, all societies had a shortage of labor.
was the factor of production in short supply, not land. Not even
in Athens was land in short supply in the 6th and 5th centuries.
You needed labor, and so you had to make it attractive for
immigrants to join your society instead of having your people
run away, as they would in a society run by creditors reducing
clients to bondage.
JS: So you are writing about how Roman liberty was actually the
liberty of oligarchic creditors from populist pressures for debt
What of the d'ror of Leviticus 25 - the liberty of
the postexilic Jews? Did they actually proclaim years of Jubilee
in which debts were forgiven and bondservants were returned to
MH: After the Babylonian Jews returned to Jerusalem, I'm sure
that they said that it was time for the land to be returned to
its original owners - and their families, by the way, were the
original owners who were exiled in the Babylonian Captivity.
rely largely on Baruch Levine for this idea of the ge'ullah [גְּאֻלָּה],
saying 'give us back our ancestral lands.'
[See the colloquium
Levine and Hudson co-edited on 'Urbanization and
Land Ownership in the
Ancient Near East,' and their preceding volume on ancient
There must have been some kind of settlement
along those lines. Unfortunately, the Judaic lands did not keep
their records on on clay tablets that could be thrown out and
recovered thousands of years later.
We don't have any record of
their economic history after the Return.
JS: Now I've brought along the transcriptions of several
Egyptian papyri for you to look at.
I also want to show you a
papyrus in Aramaic from Judæa. It's not direct evidence that the
post-exilic Jews were having Jubilee years, but it's indirect
evidence, because it says that a particular debt has to be paid,
even during a time of general debt amnesty, even if it falls due
in a shmita [שמיטה], a sabbath year.
So it sounds like the
Jews were finding loopholes...
MH: It certainly sounds like it! Babylonian creditors tried a
similar ploy, but this was disallowed. (We have court records
confirming the realm's misharumacts.)
JS: In the Mosaic commandments to forgive debt, can we infer
that there was some sort of program of debt forgiveness in place
already in place in postexilic Jerusalem?
MH: Yes, but it ended with Rabbi Hillel and the
Debtors had to sign this clause at the end of their debt
contracts saying that they waived their rights under the Jubilee
year in order to get a loan. That was why Jesus fought against
the Pharisees and the rabbinical leadership.
That's what Luke 4
is all about.
[And there was delivered unto him the book of the
prophet Isaiah. And when he had opened the book, he found the
place where it was written,
"The Spirit of the Lord is upon me,
because he hath anointed me to preach the gospel to the poor; he
hath sent me to heal the brokenhearted, to preach deliverance to
the captives, and recovering of sight to the blind, to set at
liberty them that are bruised, to preach the acceptable year of
the Lord" = the Jubilee year.]
Luke also pointed out that the
Pharisees loved money!
JS: Let me ask you about Egypt here.
Unfortunately, as you said,
the postexilic Jews did not leave us any clay tablets and almost
no papyri, but we do have loads of papyri concerning the
Ptolemaic kings of Egypt.
So from, say, 300 B.C. to the death of
Cleopatra, we have official evidence that the Egyptian kings
proclaimed debt amnesties.
Maybe one of the reasons, or perhaps
the main reason for this, is because they were so powerful, like
the Mesopotamian kings.
So even though the Ptolemaic kings were
biologically and genetically Macedonian Greek - married to their
sisters, too - they aspired to rule in the ancient Egyptian pharaonic tradition of
We Are God-Kings and We Own Everything in
MH: Certainly the Hellenistic kings had the ancient pharaonic
Sed festivals, which go back thousands of years and were a kind
The Egyptians had regular debt cancellations,
because under the pharaohs the debts that would have been
cancelled were basically tax debts.
They were owed to the crown,
so he was cancelling debts owed to himself ultimately.
see this thousands of years later in the trilingual stone, the
Rosetta Stone, which the priests wrote for that young boy who
was Ptolemy V.
They explained to him that this is how Egypt
always had done it, and to act as a pharaoh, he had to do the
JS: And I think it is worth pointing out here that the same
verb-plus-noun combination for forgiving debts that the priests
used in Greek on the Rosetta Stone is also used by Matthew in
the Lord's Prayer [ἀφῆκεν/ἄφες ὀφειλήματα, aphēken/aphes
It shows up in lots of papyri. The same Greek verb
and noun, again and again and again.
But let's go back to the Greeks of the 500s BC. They are a
couple of hundred years out of their Dark Age, so their society
has been reconstituted after the demographic wipeout.
reconstituted, but without Near Eastern-style "divine kingship"
and its Clean Slate proclamations. Just the opposite.
had conversations with the rhapsodes who had memorized and
recited the Iliad. Even in their great epic, the Greeks'
legendary king of kings Agamemnon comes across as a kind of
How would you describe Greek kingship,
especially the so-called tyrants?
MH: There never really were Greek kings of the type found
throughout the Bronze Age Near East and surviving into the first
millennium in Assyria and even in Persia.
The Greek polities
that emerged from their Dark Age were run by what shrewd
Classicists call mafiosi, something like the post-Soviet
They formed closed political monopolies reducing
local populations to clientage and dependency. In one polity
after another they were overthrown and exiled, mainly by
aristocratic reformers from the elite families (often secondary
branches, as was Solon).
Later oligarchic writers called them
"tyrants" as an invective, much as the word rex
- king - became an
invective in oligarchic Rome.
These tyrant-reformers consolidated their power by
redistributing land from the leading families (or in Sparta,
land conquered from Messenia, along with its population reduced
helotage) to the citizen-army at large all over Greece
- except in Athens.
That was one of the most reactionary cities in
the 7th century, as shown by what is known about the
After some abortive coups in the seventh century,
was appointed in 594 to avoid the kind of revolution that had
led reformer "tyrants" to overthrow narrow aristocracies in
neighboring Megara and Corinth.
Solon decreed a half-way reform,
abolishing debt slavery (but not the debtor's obligation to work
off debts with his own labor), and did not redistribute Athenian
land from the city's elites.
Athens was one of the last to reform but then because it was
such a badly polarized autocratic society, it swung - like
Newton's Third Law of Motion:
every action has an equal and
opposite reaction - it swung to become the most democratic of
all the Greek polities.
Some historians in the past speculated that Solon might somehow
have been influenced by Judaic law or other Near Eastern
practice, but this is not realistic.
I think Solon was simply a
pragmatist responding to widespread demands that he do what the
reformers - the so-called tyrants - were doing throughout
He didn't redistribute the land like they did, but he at
least ended outright debt slavery.
Free debtors (mainly
cultivators on the land) were being seized and sold outside of
Athens to slave dealers. Solon also tried to recover some of the
land that wealthy families had grabbed.
At least, that's what he
wrote in his poems describing his actions.
So to answer your question, I think debt cancellations were not
a diffusionist policy from the East, but a spontaneous pragmatic
response such as was being widely advocated as far west as Rome
with its Secession of the Plebs a century later - followed by
much of Greece in the 4th century BC, and Sparta's kings in the
late 3rd century BC.
Poorer Athenians were so angry with Solon for being not
revolutionary enough that he went into exile for 10 years.
real creators of Athenian democracy were Peisistratos [died
528/7 BC], his sons, also called tyrants, and then Cleisthenes
He was a member of the wealthy but outcast family, the Alcmaeonidae, who had been expelled in the 7th century.
had allowed them to return, and they were backed by Delphi (to
which the family contributed heavily). Cleisthenes fought
against the other oligarchic families and restructured Athenian
politics on the basis of locality instead of clan membership.
Servius Tullius is credited for enacting much the same reform in
Rome. Lewis Henry Morgan's Ancient Society  described this
restructuring of voting districts as the great watershed
creation of western-style democracy.
JS: Let me go back now to the way Athens and the other poleis
emerged from the Dark Age.
MH: Judging from the art and pottery, Greece didn't begin to
recover until the 8th century BC.
JS: So we're talking about the 700s BC. As Greece was
learning from the Near Eastern civilizations, everything from
mythology to the alphabet to weights and measures...
MH: And commercial practices, credit practices.
JS: Yes, all this came from the Near East, including the
practice of charging interest.
But what about Clean Slate debt
I want to argue logically here - not from any hard
historical evidence, but only deductively - that the Greeks
would have wanted the concept of Clean Slate debt forgiveness,
they would have wanted to learn this too from the Near East, but
they could not do it because they were always going to lack a
Hammurabi-style "divine king."
MH: I think you miss the whole point of how Western civilization
First of all, who "wanted" Near Eastern kingship?
Certainly not the emerging oligarchies. The ruling elites wanted
to use interest-bearing debt to enrich themselves - by obtaining
control over the labor power of debtors.
Second, I don't think the Greeks and Italians knew about Near
Eastern royal proclamations, except as an alien practice much
further East than Asia Minor.
Falling into debt was a disaster
for the poor, but a means for their Western patrons to gain
power, land and wealth. There is no record of anyone suggesting
that they should be in the Near East.
The connection between the
Near East and Greece or Italy was via traders.
If you're a
Phoenician or Syrian merchant with the Aegean or Italy, you're
going to set up a temple as an intermediary, typically on an
island. Such temples became the cosmopolitan meeting places
where you had the oligarchs of the leading families of Greek
cities visiting each other as part of a Pan-Hellenic group.
could say that Delphi was the "Davos" of its day.
It was through these trading centers that culture diffused - via
the wealthiest families who travelled and established
relationships with other leading families. Finance and trade
have always been cosmopolitan.
These families learned about debt
obligations and contracts from the Near East, and ended up
reducing much of their local populations to clientage, without
kings to overrule them.
That would have been the last thing they
JS: So absent
Hammurabi-style "divine kingship," is debt bondage
and brutal polarization almost inevitably going to happen in any
society that adopts interest-bearing debt?
MH: We see a balance of forces in the ancient Near East, thanks
to the fact that its rulers had authority to cancel debt and
restore land that wealthy individuals had taken from
These kings were powerful enough to prevent the
rise of oligarchies that would reduce the population to debt
peonage and bondage (and in the process, deprive the palace of
revenue and corvée labor, and even the military service of
debtors owing their labor to their private creditors).
have any similar protection in today's Western Civilization.
That's what separates Western Civilization from the earlier Near
Eastern stage. Modern financialized civilization has stripped
away the power to prevent a land-grabbing creditor oligarchy
from controlling society and its laws.
So you could characterize Western Civilization is being
decadent. It's reducing populations to austerity on a road to
Today's new oligarchy calls this a "free market,"
but it is the opposite of freedom...
You can think of the Greek
and Roman decontextualization of Near Eastern economic
regulations as if
the IMF had been put in charge of Greece and
Rome, poisoning its legal and political philosophy at the
So Western Civilization may be just a vast detour.
That's what my forthcoming book,
The Collapse of Antiquity, is
all about. That will be the second volume in my trilogy on the
history of debt.
JS: So are we just a vast detour?
MH: We have to restore a balanced economy where the oligarchy is
controlled, so as to prevent the financial sector from
impoverishing society, imposing austerity and reducing the
population to clientage and debt serfdom.
JS: How do you do that without a Hammurabi-style "divine
MH: You need civil law to do what Near Eastern kings once did.
You need a body of civil law with a strong democratic government
acting to shape markets in society's overall long-term interest,
not that of
the One Percent obtaining wealth by
the 99 Percent.
You need civil law that protects the population
from an oligarchy whose business plan is to accumulate wealth in
ways that impoverish the economy at large.
This requires a body
of civil law that would cancel debts when they grow too large
for the population to pay. That probably requires public banking
and credit - in other words, deprivatization of banking
All this requires a mixed economy, such as the Bronze Age Near
Eastern economies were.
The palace, temples, private sector and
entrepreneurs acted as checks and balances on each other.
Western Civilization isn't a mixed economy. Socialism was an
attempt to create a mixed economy, but the oligarchs fought
What they call a "free market" is an unmixed monolithic,
centrally planned financialized economy with freedom for the
oligarchy to impoverish the rest of society.
That was achieved
by landlordism monopolizing the land in feudal Europe, and it is
done by finance today...
Part 2 - Mixed Economies Today, Compared to Those of Antiquity
Could you define what
you mean by a mixed economy?
There are many
degrees of how "mixed" an economy will be - meaning in practice,
how active its government sector will be in regulating markets,
prices and credit, and investing in public infrastructure.
In the 20thcentury's Progressive Era a century ago, a "mixed
economy" meant keeping natural monopolies in the public sector:
transportation, the post office, education, health care, and so
forth. The aim was to save the economy from monopoly rent by a
either direct public ownership or government regulation to
prevent price gouging by monopolies.
The kind of "mixed economy" envisioned by Adam Smith, John
Stuart Mill and other classical 19thcentury free market
economists aimed at saving the economy from land rent paid to
Europe's hereditary landlord class. Either the government would
tax away the land's rent, or would nationalize it by taking land
out of the hands of landlords. The idea was to free markets from
economic rent ("unearned income") in general, including monopoly
rents, and also to subsidize basic needs to create a
price-competitive national economy.
Long before that, in the Bronze Age - which I describe in …and
forgive them their debts— the palace reversed the buildup of
personal and agrarian debts by annulling them on a more or less
regular basis. This freed the economy from the overgrowth of
debt that tended to build up chronically from the mathematical
dynamics of compound interest, and from crop failures or other
normal "market" phenomenon.
In all these cases a mixed economy was designed to maintain
stability and avoid exploitation that otherwise would lead to
JS: So a mixed economy is still a market economy?
MH: Yes. All these degrees of "mixed economy" were market
economies. But their markets were regulated and subordinated to
broad social and political objectives rather than to personal
rent-seeking or creditor gains. Their economic philosophy was
long-term, not short-term, and aimed at preventing economic
imbalance from debt and land monopoly.
Today's "mixed economy" usually means an active public sector
undertaking investment in infrastructure and controlling money
and credit, and shaping the context of laws within which the
economy operates. This is best understood by contrasting it to
what neoliberals call a "pure" or "market" economy – including
what the Trump administration accuses China of when it proposes
countervailing tariffs to shape the U.S. and international
market in a way that favors American corporations and banks.
So it is necessary to clear the terminological slate before
going into more detail. Every economy is a "market economy" of
some sort or another. What is at issue is how large a role
governments will play - specifically, how much it will regulate,
how much it will tax, how much it will invest directly into the
economy's infrastructure and other means of production or act as
a creditor and regulator of the monetary and banking system.
JS: What can we learn from the mixed economies of the Ancient
Near East? Why were they so prosperous and also stable for so
MH: The Bronze Age mixed economies of Sumer, Babylonia, Egypt
and their Near Eastern neighbors were subject to "divine
kingship," that is, the ability of kings to intervene to keep
restoring an economy free of personal and rural debt, so as to
maintain a situation where the citizenry on the land was able to
serve in the military, provide corvée labor to create basic
infrastructure, and pay fees or taxes to the palace and temples.
Mesopotamian rulers proclaimed Clean Slates to keep restoring an
idealized status quo anteof free labor (free from debt bondage).
Babylonian rulers had a more realistic view of the economy than
today's mainstream economists. They recognized that economies
tended to polarize between wealthy creditors and debtors if what
today are called "market forces" are not overridden - especially
the "market forces" of debt, personal liberty or bondage, and
land rent. The task of Bronze Age rulers in their kind of mixed
economy was to act from "above" the market so as to prevent
creditors from reducing the king's subjects (who were their
military defense force) to bondage from appropriating their land
tenure rights. By protecting debtors, strong rulers also
prevented creditors from becoming an oligarchic power in
opposition to themselves.
JS: What kind of economic theories and economic models are the
critics of mixed economies trying to advance?
MH: Opponents of a mixed economy have developed an "equilibrium
theory" claiming to show that markets come to a natural, fair
and stable balance without any government "interference." Their
promise is that if governments will refrain from regulating
prices and credit, from investing and from providing public
services, economies will settle naturally at a highly efficient
level. This level will be stable, unless "destabilized" by
government "interference." Instead of viewing public investment
as saving the economy from monopoly rent and debt peonage, the
government itself is described as a "rent seeker" exploiting and
impoverishing the economy.
JS: But is this sort of economic theory legitimate, or just a
libertarian-sounding camouflage for neoliberal pillage?
MH: It's Orwellian Doublethink. Today's neoliberal theory
justifies oligarchies breaking free of public control to
appropriate the economic surplus by indebting economies to skim
off the economic surplus as interest and then foreclose on
personal landholdings and public property, overthrowing "mixed
economies" to create a "pure oligarchy." Their idea of a free
market is one free for creditors and monopolists to deny
economic freedom to the rest of the population. The political
extension of this approach in antiquity was to unseat kings and
civic regimes, to concentrate power in the hands of an
increasingly predatory class reducing the economy to bondage,
impoverishing it, and ultimately leaving it to be conquered by
outsiders. That is what happened to Rome in Late Antiquity.
Advocates of strong government have a diametrically opposite
mathematical model. Ever since the Bronze Age, they recognized
that the "natural" tendency of economies is to polarize between
a wealthy creditor and land-owning class and the rest of
society. Bronze Age rulers recognized that debts tend to grow
faster than the ability to pay (that is, faster than the
economy). Babylonian rulers recognized that if rulers did not
intervene to cancel personal debts (mainly agrarian debts by
cultivators) when crops failed, when military action interfered,
or simply when debts built up over time, then creditors would
end up taking the crop surplus and even the labor services of
debtors as interest, and finally foreclosing on the land. This
would have deprived the palatial economy of land and labor
contributions. And by enriching an independent class of
creditors (on their way to becoming large landowners) outside of
the palace, financial wealth would express itself in economic
and even military power. An incipient financial and landholding
oligarchy would mount its own military and political campaign to
unseat rulers and dismantle the mixed palatial/private economy
to create one that was owned and controlled by oligarchies.
The result in Classical Antiquity was economic polarization
leading to austerity and bondage, grinding the economy to a
halt. That is the tendency of economies in "unmixed" economies
where the public sector is privatized and economic regulation is
dismantled. Land and credit was monopolized and smallholders
became dependent clients and ultimately were replaced by slaves.
Mixed economies by the late 19thcentury aimed at minimizing
market prices for real estate and monopoly goods, and for
credit. The economic aim was to minimize the cost of living and
doing business so as to make economies more productive. This was
called "socialism" as the natural outgrowth of industrial
capitalism protecting itself from the most burdensome legacies
of feudalism: an absentee landlord class, and a banking class
whose money-lending was not productive but predatory.
JS: So mixed economies require strong and ultimately good
MH: Any "mixed" economy has some basic economic theory of what
the proper role of government is. At the very least, as in the
20thcentury, this included the limitation of monopoly rents. The
neoclassical (that is, anti-classical) reaction was to formulate
a euphemistic theory of consumer "demand" - as if American
consumers "demand" to pay high prices for pharmaceuticals and
health care. Likewise in the case of housing prices for renters
or, for owner-occupied housing, mortgage charges: Do renters and
home buyers really "demand" to pay higher and higher rents and
larger and larger mortgages? Or are they compelled to pay out of
need, paying whatever their suppliers demand (e.g., as in "Your
money or your life/health").
So to answer your question, a mixed economy is one in which
governments and society at large realize that economies need to
be regulated and monopolies (headed by credit and land
ownership) kept out of the hands of private rent-seekers in
order to keep the economy free and efficient.
JS: Has there ever been a civil society that effectively
implemented a mixed economy since, say, 500 BC?
MH: All successful economies have been mixed economies. And the
more "mixed" they are, the more successful, stable and
long-lasting they have been as a result of their mutual
public/private checks and balances.
America was a mixed economy in the late 19th century. It became
the world's most successful industrial economy because it didn't
have an absentee landlord class like Europe did (except for the
railroad octopus), and it enacted protective tariffs to endow a
domestic manufacturing class to catch up with and overtake
JS: Other countries?
MH: Germany began to be a mixed economy in the decades leading
up to World War I. But it had a mentally retarded king whom they
didn't know how to restrain, given their cultural faith in
royalty. China is of course the most successful recent mixed
JS: Isn't it pretty brutal in China for most of the population?
MH: Most of the population does not find it brutal there. It was
brutal under colonialism and later still, under Mao's Cultural
Revolution. But now, most people in China seem to want to get
rich. That's why you're having a consolidation period of trying
to get rid of the local corruption, especially in the rural
areas. You're seeing a consolidation period that requires
clamping down on a lot of people who became successful through
JS: So how would you describe an ideal society without a
Hammurabi-style "divine kingship"? An ideal mixed economy?
MH: The credit system would be public. That way, public banks
could create credit for socially productive purposes - and could
cancel the occasional overgrowth of debts without causing
private creditors to lose and protest. The public sector also
would own and operate the natural infrastructure monopolies.
That was the basic principle of classical economics from Adam
Smith to Marx, even for erstwhile libertarians such as Henry
George. Everybody in the 19th century expected a mixed economy
with governments playing a growing role, replacing absentee
landlords, bankers and monopolists with public collection of
economic rent, public control of the credit system and provider
of basic needs.
JS: How extensive should the public sector be?
MH: A classical public sector would include the natural
monopolies that otherwise would engage in price gouging,
especially the credit and banking system. These sectors should
be public in character. For one thing, only a public bank can
write down the debts - like student debts today - without
hurting an independent oligarchic financial class. If student
debts and mortgage debts were owed to public banks, they could
be written down in keeping with the reasonable ability to be
paid. Also, public banks wouldn't make junk mortgage loans to
NINJA borrowers, as did Citibank and the other crooked banks. A
public bank wouldn't make predatory corporate raiding and
takeover loans, or finance and speculate in derivative gambles.
Most of all, when the debt overhead becomes too large - when a
large corporation that is essential to the economy can't pay its
debts - public banks can write down the debt so that the company
isn't forced into bankruptcy and sold to an American vulture
fund or other vulture fund. It can keep operating. In China the
government provides this essential service of public banks.
The key public concern throughout history has been to prevent
debt from crippling society. That aim is what Babylonian and
other third-millennium and second-millennium Near Eastern rulers
recognized clearly enough, with their mathematical models. To
make an ideal society you need the government to control the
basic utilities - land, finance, mineral wealth, natural
resources and infrastructure monopolies (including the Internet
today), pharmaceuticals and health care so their basic services
can be supplied at the lowest price.
All this was spelled out in the 19thcentury by business school
analysts in the United States. Simon Patten [1852-1922] who said
that public investment is the "fourth factor of production." But
its aim isn't to make a profit for itself. Rather, it's to lower
the cost of living and of doing business, by providing basic
needs either on a subsidized basis or for free. The aim was to
create a low-cost society without a rentier class siphoning off
unearned income and making this economic rent a hereditary
burden on the economy at large. You want to prevent unearned
To do that, you need a concept to define economic rent as
unearned and hence unnecessary income. A well-managed economy
would do what Adam Smith, David Ricardo, John Stuart Mill, Marx
and Veblen recommended: It would prevent a hereditary rentier
class living off unearned income and increasing society's
economic overhead. It's okay to make a profit, but not to make
extractive monopoly rent, land rent or financial usury rent.
JS: Will human beings ever create such a society?
MH: If they don't, we're going to have a new Dark Age.
JS: That's one thing that especially surprises me about the
United States. Is it not clear to educated people here that our
ruling class is fundamentally extractive and exploitative?
MH: A lot of these educated people are part of the ruling class,
and simply taking their money and running. They are
disinvesting, not investing in industry. They're saying, "The
financial rentier game is ending, so let's sell everything and
maybe buy a farm in New Zealand to go to when there is a big
war." So the financial elite is quite aware that they are
getting rich by running the economy into the ground, and that
this must end at the point where they've taken everything and
left a debt-ridden shell behind.
JS: I guess this gets back to what you were saying: The history
of economics has been expurgated from the curriculum.
MH: Once you strip away economic history and the history of
economic thought, you wipe out memory of the vocabulary that
people have used to criticize rent seeking and other
unproductive activity. You then are in a position to redefine
words and ideals along the lines that euphemize predatory and
parasitic activities as if they are productive and desirable,
even natural. You can rewrite history to suppress the idea that
all this is the opposite of what Adam Smith and the
classicaleconomists down through Marx advocated.
Today's neoliberal wasteland is basically a reaction against the
19thcentury reformers, against the logic of classical British
political economy. The hatred of Marx is ultimately the hatred
of Adam Smith and John Stuart Mill, because neoliberals realize
that Smith and Mill and Ricardo were all leading to Marx. He was
the culmination of their free market views - a market free from rentiers and monopolists.
That was the immediate aim of socialism in the late 19thcentury.
The logic of classical political economy was leading to a
socialist mixed economy. In order to fight Marxism, you have to
fight classical economics and erase memory of how civilization
has dealt with (or failed to deal with) the debt and
rent-extracting problems through the ages. The history of
economic thought and the original free-market economics has to
be suppressed. Today's choice is therefore between socialism or
barbarism, as Rosa Luxemburg said.
JS: Let's consider barbarism: When I observe the neoliberal
ruling class - the people who control the finance sector and the
managerial class on Wall Street - I often wonder if they're
historically exceptional because they've gone beyond simple
greed and lust for wealth. They now seek above all some barbaric
and sadistic pleasure in the financial destruction and
humiliation of other people. Or is this historically normal?
MH: The financial class has always lived in the short run, and
you can make short-term money much quicker by asset stripping
and being predatory can by being productive. Moses Finley wrote
that there was not a single productive loan in all of Antiquity.
That was quite an overstatement, but he was making the point
that there were no productive financial markets in Antiquity.
Almost all manufacturing, industry, and agriculture was
self-financed. So the reader of Finley likely infers that we
modern people have progressed in a fundamental way beyond
Antiquity. They were characterized by the homo politicus, greedy
for status. We have evolved into homo œconomicus, savvy enough
to live in stable safety and comfort.
We are supposedly the beneficiaries of the revolution of
industrial capitalism, as if all the predatory, polarizing,
usurious lending that you had from feudal times (and before
that, from Antiquity), was replaced by productive lending that
finances means of production and actual economic growth.
But in reality, modern banks don't lend money for production.
They say, "That's the job of the stock market." Banks only lend
if there's collateral to grab. They lend against assets in
place. So the result of more bank lending is to increase the
price of the assets that banks lend against - on credit! This
way of "wealth creation" via asset-price inflation is the
opposite of real substantive progress. It enriches the narrow
class of asset holders at the top of the economic pyramid.
JS: What about the stock market?
MH: The stock market no longer primarily provides money for
capital investment. It has become a vehicle for bondholders and
corporate raiders to borrow from banks and private funds to buy
corporate stockholders, take the companies private, downsize
them, break them up or strip their assets, and borrow more to
buy back their stocks to create asset-price gains without
increasing the economy's tangible real asset base. So the
financial sector, except for a brief period in the late 19th
century, especially in Germany, has rarely financed productive
growth. Financial engineering has replaced industrial
engineering, just as in Antiquity creditors were asset
The one productive activity that the financial sector engaged in
from the Bronze Age onward was to finance foreign trade. The
original interest-bearing debt was owed by merchants to
reimburse their silent partners, typically the palace or the
temples, and in time wealthy individuals. But apart from
financing trade – in products that were already produced –
you've rarely had finance increase the means of production or
economic growth. It's almost always been to extract income. The
income that finance extracts is at the expense of the rest of
society. So the richer the financial sector is, the more
austerity is imposed on the non-financial sector.
JS: That's pretty depressing.
MH: When I did the show with Jimmy Dore [https://www.youtube.com/watch?v=PSvcB55R8jM],
he saw that the most important dynamic to understand is that
debts grow more rapidly than the economy at large. The rate of
interest is higher than the rate of growth. It may not be higher
than the profit rate, but it's higher than the rate of growth.
So every society that has interest-bearing debt is going to end
up deeper and deeper in debt. At a certain point the creditors
are paid at the expense of production and investment - and soon
enough they foreclose.
JS: And then?
MH: Then you have debt deflation. That is the norm. Austerity.
It is not an anomaly, but the essence. The Babylonians knew
this, and they tried to avoid debt deflation by wiping out the
predatory personal debts, not the business debts that were
commercial and productive. Only the non-commercial debts were
JS: How could Modern Monetary Theory be used now, effectively?
MH: The main way is to say that governments don't have to borrow
at interest from existing financial "savers," mainly the One
Percent. The government can do what America did during the Civil
War: print greenbacks. (The MMT version is the Trillion-dollar
platinum coin.) The Treasury can provide the money needed by the
economy. It does that by running a budget deficit and spending
money into the economy. If you don't do that, if you do what
Bill Clinton did in the last years of his presidency and run a
budget surplus, then you force the economy to depend on banks
The problem is that bank credit is essentially predatory and
extractive. The same thing happens in Europe. The Eurozone
governments cannot run a budget deficit of more than 3 percent,
so the government is unable to spend enough money to invest in
public infrastructure or anything else. As a result, the
Eurozone economy is subject to debt deflation, which is
exacerbated by people having to borrow from the banks at high
interest rates that far exceeds the rate of growth. So Europe is
suffering an even more serious debt deflation than the United
JS: Is any of this going to change, either in Europe or here?
MH: Not until there's a crash. Not until it gets serious enough
that people realize that there has to be an alternative. Right
now Margaret Thatcher and the neoliberals have won. She said
there was no alternative, and as long as people believe There Is
No Alternative, they're not going to realize that it doesn't
have to be this way, and that you don't need a private banking
sector. A public banking sector would be much more efficient.
JS: How would you sum up Wall Street right now? Is it entirely
predatory? Entirely parasitical? What are Wall Street's
essential functions now?
MH: Number one, to run a casino. By far the largest volume at
stake is betting on whether interest rates, foreign exchange
rates or stock prices will go up or down. So the financial
system has turned into a gambling casino. Its second aim is to
load the economy down with as much debt as possible. Debt is the
banking system's "product," and the GDP counts its "carried
interest" penalties and late fees, its short-term trading gains
as "financial services" counted as part of Gross Domestic
The aim is to get as much of these financial returns as
possible, and finally to foreclose on as much property of
defaulting debtors as possible. The business plan - as I learned
at Chase Manhattan years ago - is to transfer all economic
growth into the hands of financial investors, the One Percent.
The financial business plan is to create a set of laws and mount
a campaign of regulatory capture so that all the growth in the
economy accrues to the One Percent, not the 99 Percent. That
means that as the One Percent's rentier income grows, the 99
Percent gets less and less each year, until finally it emigrates
or dies off, or is put into a for-profit prison, which looks
like a growth industry today.
JS: Is there a single good thing that Wall Street does? Is there
anything good that comes out of Wall Street?
MH: You have to look at it as a system. You can't segregate a
particular action from the overall economy. If the overall
system aims at making money in predatory ways at somebody else's
expense, then it is a zero-sum game. That is essentially a
short-run business model. And politically, it involves opposing
a mixed economy. At least, the "old fashioned" socialist mixed
economy in which governments subordinate short-term gain-seeking
to long-term objectives uplifting the entire economy.
As the Greek philosophers recognized, wealthy people define
their power by their ability to injure the rest of society, so
as to lord it over them. That was the Greek philosophy of
money-lust [πλεονεξία, pleonexia] and hubris [ὕβρις]
merely arrogance, but behavior that was injurious to others.
Rentier income is injurious to society at large. Rentiersdefine
a "free market" as one in which they are free to denyeconomic
freedom to their customers, employees and other victims. The
rentier model is to enrich the oligarchy to a point where it is
able to capture the government.
Part 3 - The Inherent
Financial Instability in Western Civilization's DNA
It seems that unless
there's a Hammurabi-style "divine king" or some elected civic
regulatory authority, oligarchies will arise and exploit their
societies as much as they can, while trying to prevent the
victimized economy from defending itself.
Near Eastern rulers
kept credit and land ownership subordinate to the aim of
maintaining overall growth and balance. They prevented creditors
from turning citizens into indebted clients obliged to work off
their debts instead of serving in the military, providing corvée
labor and paying crop rents or other fees to the palatial
JS: So looking at history going back to 2000 or 3000 BC, once we
no longer have the powerful Near Eastern "divine kings," there
seems not to have been a stable and free economy. Debts kept
mounting up to cause political revolts. In Rome, this started
with the Secession of the Plebs in 494 BC, a century after
Solon's debt cancellation resolved a similar Athenian crisis.
MH: Near Eastern debt cancellations continued into the
Neo-Assyrian and Neo-Babylonian Empires in the first millennium
BC, and also into the Persian Empire. Debt amnesties and laws
protecting debtors prevented the debt slavery that is found in
Greece and Rome. What modern language would call the Near
Eastern "economic model" recognized that economies tended to
become unbalanced, largely as a result of buildup of debt and
various arrears on payments. Economic survival in fact required
an ethic of growth and rights for the citizenry (who manned the
army) to be self-supporting without running into debt and losing
their economic liberty and personal freedom. Instead of the
West's ultimate drastic solution of banning interest, rulers
cancelled the buildup of personal debts to restore an idealized
order "as it was in the beginning."
This ideology has always needed to be sanctified by religion or
at least by democratic ideology in order to prevent the
predatory privatization of land, credit, and ultimately the
government. Greek philosophy warned against monetary greed [πλεονεξία,pleonexia]
and money-love [φιλοχρηματία, philochrêmatia] from Sparta's
mythical lawgiver Lycurgus to Solon's poems describing his debt
cancellation in 594 and the subsequent philosophy of Plato and
Socrates, as well as the plays of Aristophanes. The Delphic
Oracle warned that money-love was the only thing that could
destroy Sparta [Diodorus Siculus 7.5]. That indeed happened
after 404 BC when the war with Athens ended and foreign tribute
poured into Sparta's almost un-monetized regulated economy.
The problem, as famously described in The Republic and handed
down in Stoic philosophy, was how to prevent a wealthy class
from becoming wealth-addicted, hubristic and injurious to
society. The 7th-century "tyrants" were followed by Solon in
Athens in banning luxuries and public shows of wealth, most
notoriously at funerals for one's ancestors. Socrates went
barefoot [ἀνυπόδητος, anupodêtos] to show his contempt for
wealth, and hence his freedom from its inherent personality
defects. Yet despite this universal ideal of avoiding extremes,
oligarchic rule became economically polarizing and destructive,
writing laws to make its creditor claims and the loss of land by
smallholders irreversible. That was the opposite of Near Eastern
Clean Slates and their offshoot, Judaism's Jubilee Year.
JS: So despite the ideals of their philosophy, Greek political
systems had no function like that of Hammurabi-like kings - or
philosopher-kings for that matter - empowered to hold financial
oligarchies in check. This state of affairs led philosophers to
develop an economic tradition of lamentation instead. Socrates,
Plato and Aristotle, Livy and Plutarch bemoaned the behavior of
the money-loving oligarchy. But they did not develop a program
to rectify matters. The best they could do was to inspire and
educate individuals - most of whom were their wealthy students
and readers. As you said, they bequeathed a legacy of Stoicism.
Seeing that the problem was not going to be solved in their
lifetimes, they produced a beautiful body of literature praising
MH: The University of Chicago, where I was an undergraduate in
the 1950s, focused on Greek philosophy. We read Plato's
Republic, but they skipped over the discussion of
wealth-addiction. They talked about philosopher-kings without
explaining that Socrates' point was that rulers must not own
land and other wealth, so as not to have the egotistical tunnel
vision that characterized creditors monopolizing control over
land and labor.
JS: In Book 8 of the Republic, Socrates condemns oligarchies as
being characterized by an insatiable greed [ἀπληστία,aplêstia]
for money and specifically criticizes them for allowing
polarization between the super-rich [ὑπέρπλουτοι, hyper-ploutoi]
and the poor [πένητες, penêtes], who are made utterly
resourceless [ἄποροι, aporoi].
MH: One needs to know the context of Greek economic history in
order to understand The Republic's main concern. Popular demands
for land redistribution and debt cancellation were resisted with
increasing violence. Yet few histories of Classical Antiquity
focus on this financial dimension of the distribution of land,
money and wealth.
Socrates said that if you let the wealthiest landowners and
creditors become the government, they're probably going to be
wealth-addicted and turn the government into a vehicle to help
them exploit the rest of society. There was no idea at Chicago
of this central argument made by Socrates about rulers falling
subject to wealth-addiction. The word "oligarchy" never came up
in my undergraduate training, and the "free market" business
school's Ayn Rand philosophy of selfishness is as opposite from
Greek philosophy as it is from Judeo-Christian religion.
JS: The word "oligarchy" comes up a lot in book 8 of Plato's
Republic. Here are 3 passages:
1. At Stephanus page 550c … "And what kind of a regime," said
he, "do you understand by oligarchy [ὀλιγαρχία]?"
"That based on
a property qualification," said I, "wherein the rich [πλούσιοι]
hold office [550d] and the poor man [πένης, penês] is excluded.
2. at 552a … "Consider now whether this polity [i.e. oligarchy]
is not the first that admits that which is the greatest of all
such evils." "What?" "The allowing a man to sell all his
possessions, which another is permitted to acquire, and after
selling them to go on living in the city, but as no part of it,
neither a money-maker, nor a craftsman, nor a knight, nor a
foot-soldier, but classified only as a pauper [πένης, penês] and
a dependent [ἄπορος, aporos]." [552b]
"This is the first," he
said. "There certainly is no prohibition of that sort of thing
in oligarchical states. Otherwise some of their citizens would
not be excessively rich [ὑπέρπλουτοι, hyper-ploutoi], and others
out and out paupers [πένητες, penêtes]."
3 at 555b: "Then," said I, "is not the transition from oligarchy
to democracy effected in some such way as this - by the
insatiate greed [ἀπληστία, aplêstia]
for that which oligarchy set before itself as the good, the
attainment of the greatest possible wealth?"
MH: By contrast, look where Antiquity ended up by the 2ndcentury
BC. Rome physically devastated Athens, Sparta, Corinth and the
rest of Greece. By the Mithridatic Wars (88-63 BC) their temples
were looted and their cities driven into unpayably high debt to
Roman tax collectors and Italian moneylenders. Subsequent
Western civilization developed not from the democracy in Athens
but from oligarchies supported by Rome. Democratic states were
physically destroyed, blocking civic regulatory power and
imposing pro-creditor legal principles making foreclosures and
forced land sales irreversible.
JS: It seems that Greek and Roman Antiquity could not solve the
problem of economic polarization. That makes me want to ask
about our own country: To what extent does America resemble Rome
under the emperors?
MH: Wealthy families have always tried to break "free" from
central political power - free to destroy the freedom of people
they get into debt and take their land and property. Successful
societies maintain balance. That requires public power to check
and reverse the excesses of personal wealth seeking, especially
debt secured by the debtor's labor and land or other means of
self-support. Balanced societies need the power to reverse the
tendency of debts to grow faster than the ability to be paid.
That tendency runs like a red thread through Greek and Roman
This overgrowth of debt is also destabilizing today's U.S. and
other financialized economies. Banking and financial interests
have broken free of tax liability since 1980, and are enriching
themselves not by helping the overall economy grow and raising
living standards, but just the opposite: by getting the bulk of
society into debt to themselves.
This financial class is also indebting governments and taking
payment in the form of privatizing the public domain. (Greece is
a conspicuous recent example.) This road to privatization,
deregulation and un-taxing of wealth really took off with
Margaret Thatcher and Ronald Reagan cheerleading the
anti-classical philosophy of Frederick von Hayek and the
anti-classical economics of Milton Friedman and the Chicago
Something much like this happened in Rome. Arnold Toynbee
described its oligarchic land grab that endowed its ruling
aristocracy with unprecedented wealth as Hannibal's Revenge.
That was the main legacy of Rome's Punic Wars with Carthage
ending around 200 BC. Rome's wealthy families who had
contributed their jewelry and money to the war effort, made
their power grab and said that what originally appeared to be
patriotic contributions should be viewed as having been a loan.
The Roman treasury was bare, so the government (controlled by
these wealthy families) gave them public land, the ager publicus
that otherwise would have been used to settle war veterans and
Once you inherit wealth, you tend to think that it's naturally
yours, not part of society's patrimony for mutual aid. You see
society in terms of yourself, not yourself as part of society.
You become selfish and increasingly predatory as the economy
shrinks as a result of your indebting it and monopolizing its
land and property. You see yourself as exceptional, and justify
this by thinking of yourself as what Donald Trump would call "a
winner," not subject to the rules of "losers," that is, the rest
of society. That's a major theme in Greek philosophy from
Socrates and Plato and Aristotle through the Stoics. They saw an
inherent danger posed by an increasingly wealthy landholding and
creditor ruling class atop an indebted population at large. If
you let such a class emerge independently of social regulation
and checks on personal egotism and hubris, the economic and
political system becomes predatory. Yet that has been the
history of Western civilization.
Lacking a tradition of subordinating debt and land foreclosure
from smallholders, the Greek and Italian states that emerged in
the 7thcentury BC took a different political course from the
Near East. Subsequent Western civilization lacked a regime of
oversight to alleviate debt problems and keep the means of
self-support broadly distributed.
The social democratic movements that flowered from the late
19thcentury until the 1980s sought to re-create such regulatory
mechanisms, as in Teddy Roosevelt's trust busting, the income
tax, Franklin Roosevelt's New Deal, postwar British social
democracy. But these moves to reverse economic inequality and
polarization are now being rolled back, causing austerity, debt
deflation and the concentration of wealth at the top of the
economic pyramid. As oligarchies take over government, they
lorded it over the rest of society much like feudal lords who
emerged from the wreckage of the Roman Empire in the West.
The tendency is for political power to reflect wealth. Rome's
constitution weighted voting power in proportion to one's
landholdings, minimizing the voting power of the non-wealthy.
Today's private funding of political campaigns in the United
States is more indirect in shifting political power to the Donor
Class, away from the Voting Class. The effect is to turn
governments to serve a financial and property-owning class
instead of prosperity for the economy at large. We thus are in a
position much like that of Rome in 509 BC, when the kings were
overthrown by an oligarchy claiming to "free" their society from
any power able to control the wealthy. The call for "free
markets" today is for deregulation of rentier wealth, turning
the economy into a free-for-all.
Classical Greece and Italy had a fatal flaw: From their
inception they had no tradition of a mixed public/private
economy such as characterized in the Near East, whose palatial
economy and temples produced the main economic surplus and
infrastructure. Lacking royal overrides, the West never
developed policies to prevent a creditor oligarchy from reducing
the indebted population to debt bondage, and foreclosing on the
land of smallholders. Advocates of debt amnesties were accused
of "seeking kingship" in Rome, or aspiring to "tyranny"(in
JS: It seems to me that you're saying this economic failure is
Antiquity's original sin as well as fatal flaw. We have
inherited a great philosophic and literary tradition from them
analyzing and lamenting this failure, but without a viable
program to set it right.
MH: That insight unfortunately has been stripped out of the
curriculum of classical studies, just as the economics
discipline sidesteps the phenomenon of wealth addiction. If you
take an economics course, the first thing you're taught in price
theory is diminishing marginal utility: The more of anything you
have, the less you need it or enjoy it. You can't enjoy
consuming it beyond a point. But Socrates and Aristophanes
emphasized, accumulating money is not like eating bananas,
chocolate or any other consumable commodity. Money is different
because, as Socrates said, it is addictive, and soon becomes an
insatiable desire [ἀπληστία, aplêstia].
JS: Yes, I understand! Bananas are fundamentally different from
money because you can get sick of bananas, but you can never
have too much money! In your forthcoming book, The Collapse of
Antiquity, you quote what Aristophanes says in his play Plutus
(the god of wealth and money). The old man Chremylus - his name
is based on the Greek word for money, chrêmata [χρήματα]
- Chremylus and his slave perform a duet in praise of Plutus as
the prime cause of everything in the world, reciting a long
list. The point is that money is a singular special thing: "O
Money-god, people never get sick of your gifts. They get tired
of everything else; they get tired of love and bread, of music
and honors, of treats and military advancement, of lentil soup,
etc., etc. But they never get tired of money. If a man has
thirteen talents of silver - 13 million dollars, say - he wants
sixteen; and if he gets sixteen, he will want forty, and so
forth, and he will complain of being short of cash the whole
MH: Socrates's problem was to figure out a way to have
government that did not serve the wealthy acting in socially
destructive ways. Given that his student Plato was an aristocrat
and that Plato's students in the Academy were aristocrats as well,
how can you have a government run by philosopher-kings?
Socrates's solution was not practical at that time: Rulers
should not have money or property. But all governments were
based on the property qualification, so his proposal for
philosopher-kings lacking wealth was utopian. And like Plato and
other Greek aristocrats, they disapproved of debt cancellations,
accusing these of being promoted by populist leaders seeking to
JS: Looking over the broad sweep of Roman history, your book
describes how, century after century, oligarchs were whacking
every energetic popular advocate whose policies threatened their
monopoly of political power, and their economic power as
creditors and privatizers of the public domain, Rome's ager publicus, for themselves.
I brought with me on the train Cæsar's Gallic War. What do you
think of Cæsar and how historians have interpreted his role?
MH: The late 1stcentury BC was a bloodbath for two generations
before Cæsar was killed by oligarchic senators. I think his
career exemplifies what Aristotle said of aristocracies turning
into democracies: He sought to take the majority of citizens
into their own camp to oppose the aristocratic monopolies of
landholding, the courts and political power.
Cæsar sought to ameliorate the oligarchic Senate's worst abuses
that were stifling Rome's economy and even much of the
aristocracy. Mommsen is the most famous historian describing how
rigidly and unyieldingly the Senate opposed democratic attempts
to achieve a role in policy-making for the population at large,
or to defend the debtors losing their land to creditors, who
were running the government for their own personal benefit. He
described how Sulla strengthened the oligarchy against Marius,
and Pompey backed the Senate against Caesar. But competition for
the consulship and other offices was basically just a personal
struggle among rival individuals, not rival concrete political
programs. Roman politics was autocratic from the very start of
the Republic when the aristocracy overthrew the kings in 509 BC.
Roman politics during the entire Republic was a fight by the
oligarchy against democracy and the populace as a whole.
The patricians used violence to "free" themselves from any
public authority able to check their own monopoly of power,
money and land acquisition by expropriating smallholders and
grabbing the public domain being captured from neighboring
peoples. Roman history from one century to the next is a
narrative of killing advocates of redistributing public land to
the people instead of letting it be grabbed by the patricians,
or who called for a debt cancellation or even just an
amelioration of the cruel debts laws.
On the one hand, Mommsen idolized Cæsar as if he were a kind of
revolutionary democrat. But given the oligarchy's total monopoly
on political power and force, Mommsen recognized that under
these conditions there could not be any political solution to
Rome's economic polarization and impoverishment. There could
only be anarchy or a dictatorship. So Caesar's role was that of
a Dictator - vastly outnumbered by his opposition.
A generation before Caesar, Sulla seized power militarily,
bringing his army to conquer Rome and making himself Dictator in
82 BC. He drew up a list of his populist opponents to be
murdered and their estates confiscated by their killers. He was
followed by Pompey, who could have become a dictator but didn't
have much political sense, so Caesar emerged victorious. Unlike
Sulla or Pompey, he sought a more reformist policy to check the
senatorial corruption and self-dealing.
The oligarchic Senate's only "political program" was opposition
to "kingship" or any such power able to check its land grabbing
and corruption. The oligarchs assassinated him, as they had
killed Tiberius and Gaius Gracchus in 133 and 121, the praetor Asellio who sought to alleviate the population's debt burden in
88 by trying to enforce pro-creditor laws, and of course the
populist advocates of debt cancellation such as Catiline and his
supporters. Would-be reformers were assassinated from the very
start of the Republic after the aristocracy overthrew Rome's
JS: If Caesar had been successful, what kind of ruler might he
MH: In many ways he was like the reformer-tyrants of the 7thand
6thcenturies in Corinth, Megara and other Greek cities. They all
were members of the ruling elite. He tried to check the
oligarchy's worst excesses and land grabs, and like Catiline,
Marius and the Gracchi brothers before him, to ameliorate the
problems faced by debtors. But by his time the poorer Romans
already had lost their land, so the major debts were owed by
wealthier landowners. His bankruptcy law only benefited the
well-to-do who had bought land on credit and could not pay their
moneylenders as Rome's long Civil War disrupted the economy. The
poor already had been ground down. They supported him mainly for
his moves toward democratizing politics at the expense of the
JS: After his assassination we get Caesar's heir Octavian, who
becomes Augustus. So we have the official end of the Republic
and the beginning of a long line of emperors, the Principate.
Yet despite the Senate's authority being permanently diminished,
there is continued widening of economic polarization. Why
couldn't the Emperors save Rome?
MH: Here's an analogy for you: Just as nineteenth-century
industrial reformers thought that capitalism's political role
was to reform the economy by stripping away the legacy of
feudalism - a hereditary landed aristocracy and predatory
financial system based mainly on usury - what occurred was not
an evolution of industrial capitalism into socialism. Instead,
industrial capitalism turned into finance capitalism. In Rome
you had the end of the senatorial oligarchy followed not by a
powerful, debt-forgiving central authority (as Mommsen believed
that Caesar was moving toward, and as many Romans hoped that he
was moving towards), but to an even more polarized imperial
JS: That's indeed what happened. The emperors who ruled in the
centuries after Cæsar insisted on being deified - they were
officially "divine," according to their own propaganda. Didn't
any of them have the potential power to reverse the Roman
economy's ever-widening polarization of the, like the Near
Eastern "divine kings" from the third millennium BC into the
Neo-Assyrian, Neo-Babylonian and even the Persian Empire in the
MH: The inertia of Rome's status quo and vested interests among
patrician nobility was so strong that emperors didn't have that
much power. Most of all, they didn't have a conceptual
intellectual framework for changing the economy's basic
structure as economic life became de-urbanized and shifted to
self-sufficient quasi-feudal manor estates. Debt amnesties and
protection of small self-sufficient tax-paying landholders as
the military base was achieved only in the Eastern Roman Empire,
in Byzantium under the 9th– and 10th-century emperors (as I've
described in my history of debt cancellations in …and forgive
them their debts).
The Byzantine emperors were able to do what Western Roman
emperors could not. They reversed the expropriation of
smallholders and annulled their debts in order to keep a free
tax-paying citizenry able to serve in the army and provide
public labor duties. But by the 11thand 12thcenturies,
Byzantium's prosperity enabled its oligarchy to create private
armies of their own to fight against centralized authority able
to prevent their grabbing of land and labor.
It seems that Rome's late kings did something like this. That is
what attracted immigrants to Rome and fueled its takeoff. But
with prosperity came rising power of patrician families, who
moved to unseat the kings. Their rule was followed by a
depression and walkouts by the bulk of the population to try and
force better policy. But that could no be achieved without
democratic voting power, so faith was put in personal leader - subject to patrician violence to abort any real economic
In Byzantium's case, the tax-avoiding oligarchy weakened the
imperial economy to the point where the Crusaders were able to
loot and destroy Constantinople. Islamic invaders were then able
to pick up the pieces.
The most relevant point of studying history today should be how
the economic conflict between creditors and debtors affected the
distribution of land and money. Indeed, the tendency of a
wealthy overclass to pursue self-destructive policies that
impoverish society should be what economic theory is all about.
We'll discuss this in Part 4.
Part 4 - A New "Reality Economics" Curriculum is Needed
I want to
spell out the implications of the points that Socrates brought
up, and with which you and I agree. That leaves the question
facing us today: Is the American oligarchy and state as
rapacious as that of Rome? Or is it universally the nature of
oligarchy in any historical setting to be rapacious? And if so,
where is it all leading?
If Antiquity had followed the
policies of modern neoliberal economics, the Near East, Greece
and Rome would never have gained momentum. Any such "free
market" avoiding mutual aid and permitting a wealthy class to
emerge and enslave the bulk of the population by getting it into
debt and taking its land would have shrunk, or been conquered
from without or by revolution from within. That's why the
revolutions of the 7thcentury BC, led to reformers subsequently
called "tyrants" in Greece (and "kings" in Rome) were necessary
to attract populations rather than reduce them to bondage.
So of course it is hard for mainstream economists to acknowledge
that Classical Antiquity fell because it failed to regulate and
tax the wealthy financial and landowning classes, and failed to
respond to popular demands to cancel personal debts and
redistribute the land that had been monopolized by the wealthy.
The wealth of the Greek and Roman oligarchies was the ancient
counterpart to today's Finance, Insurance and Real Estate (FIRE)
sector, and their extractive and predatory behavior is what
destroyed Antiquity. The perpetuation of this problem even
today, two thousand years later, should establish that the
debt/credit dynamic and polarization of wealth is a central
problem of Western civilization.
JS: So what were - and are - the political and social dynamic at
MH: The key is the concept of wealth addiction and how it leads
to hubris - arrogance that seeks to increase power in ways that
hurt other people. Hubris is not merely over-reaching; it is
socially injurious. The wealthy or power injure other people
knowingly, to establish their power and status.
That is what Aristophanes meant when his characters say that
wealth is not like bananas or lentil soup. Wealth has no object
but itself. Wealth is status - and also political control. The
creditor's wealth is the debtor's liability. The key to its
dynamic is not production and consumption, but assets and
liabilities - the economy's balance sheet. Wealth and status in
the sense of who/whom. It seeks to increase without limit, and
Socrates and Aristotle found the major example to be creditors
charging interest for lending "barren" money. Interest had to be
paid out of the debtor's own product, income or finally,
forfeiture of property; creditors did not provide means of
making interest to pay off the loan.
This is the opposite of Austrian School theories that interest
is a bargain to share the gains to be made from the loan
"fairly" between creditor and debtor. It also is the opposite of
neoclassical price theory. The economics taught in universities
today is based on a price theory that does not even touch on
this point. The liberty that oligarchs claim is the right to
indebt the rest of society and then demand full payment or
forfeiture of the debtor's collateral. This leads to massive
expropriations, as did the Junk Mortgage foreclosures after 2008
when President Obama failed to write down debts to realistic
market values for real estate financed on loans far beyond the
buyer's ability to pay. The result was 10 million foreclosures.
Yet today's mainstream economics treats the normal tendency to
polarize between creditors and debtors, the wealthy and the
have-nots, as an anomaly. It has been the norm for the last five
thousand years, but economics sidesteps actual empirical history
as if it is an anomaly in the fictional parallel universe
created by the mainstream's unrealistic assumptions. Instead of
being a science, such economics is science fiction. It trains
students in cognitive dissonance that distracts them from
understanding Classical Antiquity and the driving dynamics of
JS: This gets us back to the question of whether universities
should just be shut down and started up all over again.
MH: You don't shut them down, you create a new group of
universities with a different curriculum. The path of least
resistance is to house this more functional curriculum in new
institutions. That's what America's Republican and
pro-industrial leaders recognized after the Civil War ended in
1865. They didn't shut down Harvard and Yale and Princeton and
the Christian free-trade Anglophile colleges. They created state
colleges funded by land grants, such as Cornell in upstate New
York, and business schools such as the Wharton School at the
University of Pennsylvania, endowed by industrialists to
providing an economic logic for the state's steel-making and
related industrial protectionism. The result was an alternative
economics to describe how America should develop as what they
saw as a new civilization, free of the vestiges of Europe's
feudal privileges, absentee ownership and colonialist mentality.
The Republicans and industrialists saw that America's prestige
colleges had been founded long before the Civil War, basically
as religious colleges to train the clergy. They taught British
free trade theory, serving the New England commercial and
banking interests and Southern plantation owners. But free trade
kept the United States dependent on England. My book America's
Protectionist Takeoff describes how the American School of
Political Economy, led by Henry Carey and E. Peshine Smith
(William Seward's law partner), developed an alternative to what
was being taught in the religious colleges.
This led to a new view of the history of Western civilization
and America's role in fighting against entrenched privilege.
William Draper's Intellectual Development of Europe, and Andrew
Dixon White's History of the Warfare of Science with Theology saw
the United States as breaking free from the feudal aristocracies
that were a product of the way in which antiquity collapsed,
economically and culturally.
JS: So business schools were originally progressive!
MH: Surprising as it may seem, the answer is Yes, to the extent
that they described the global economy as tending to polarize
under free trade and an absence of government protectionism, not
to become more equal. They incorporated technology, energy-use
and the environmental consequences of trade patterns into
economic theory, such as soil depletion resulting from
plantation monocultures. Mainstream economics fought against
such analysis because it advocated markets "free" for polluters,
"free" for nations to pursue policies that made them poorer and
dependent on foreign credit.
JS: So this is how the Wharton School's first professor of
economics, Simon Patten, one of the founders of American
sociology, fits into this anti-rentier tradition! That is such a
revelation to me! They developed an analysis of technology's
effects on the economy, of monopoly pricing and economic rent as
unearned income that increases the cost of living and cost of
production. They explained the benefits of public infrastructure
investment. Today that is called "socialism," but it was
industrial capitalists who took the lead in urging such public
investment, so as to lower their cost of doing business.
MH: The first U.S. business schools in the late 19thcentury
described rentiers as unproductive. That is why today's
neoliberals are trying to rewrite the history of
Institutionalism in a way that expurgates the Americans who
wanted the government to provide public infrastructure to make
America a low-cost economy, undersell England and other
countries, and evolve into the industrial giant it became by the
JS: That was Simon Patten's teaching at the Wharton School
- government-subsidized public infrastructure as the fourth factor
MH: Yes. America's ruling political class tried to make the
United States a dominant economy instead of a rentier economy of
landlords and financial manipulators.
JS: How did the robber barons fit into this story?
MH: Not as industrialists or manufacturers, but as monopolists
opposed by the industrial interests. It was Teddy Roosevelt's
trust-busting and the Republicans that enacted the Sherman
antitrust act. Its spirit was continued by Franklin Roosevelt.
JS: Is today's economy a second age of robber barons?
MH: It's becoming a second Gilded Age. An abrupt change of
direction in economic trends occurred after Ronald Reagan and
Margaret Thatcher were elected in 1979/80. The result has been
to invert what the 19th-century economists understood to be a
free market - that is, a market free from a privileged
hereditary class living on unearned income in the form of land
rent, monopoly rent and financial extraction.
JS: I was in my first few years of college when Thatcher came in
in 1979, and when Reagan was elected in 1980. I asked my
economics professors what was going on, but I could not find a
single professor to coherently describe the U-turn that was
occurring. It certainly wasn't in Paul Samuelson's textbook that
we were given.
MH: There's little logic for neoliberalism beyond a faith that
short-term greed is the best way to optimize long-term growth.
It is natural for the wealthiest classes to have this faith.
Neoliberalism doesn't look at the economy as a social system,
and it excludes as "externalities" concerns with the
environment, debt dependency and economic polarization. It only
asks how to make a short-term hit-and-run gain, regardless of
whether this is done in a way that has a positive or negative
overall social effect. Realistic economic logic is social in
scope, and distinguishes between earned and unearned income.
That is why economists such as Simon Patten and Thorstein Veblen
decided to start afresh and create the discipline of sociology,
to go beyond narrow individualistic economics being taught.
Today's mathematical economics is based on circular reasoning
that treats all that has happened as having been inevitable. It
is all survival of the fittest, so it seems that there is no
alternative. This policy conclusion is built into economic
methodology. If we weren't the fittest, we wouldn't have
survived, so by definition (that is, circular reasoning), any
alternative is less than fit.
Regarding the fact that you had to read Samuelson when you were
in college, he was famous for his Factor Price Equalization
Theorem claiming to prove mathematically that everybody and
every nation tends naturally to become more and more equal (if
government stands aside). He denied that the tendency of the
global economy is to polarize, not equalize. The political
essence of this equilibrium theory is its claim that economies
tend to settle in a stable balance. In reality they polarize and
then collapse if they do not reverse their polarizing financial
and productivity and wealth dynamics are.
The starting point of economic theorizing should explain the
dynamic that lead economics to polarize and collapse. That is
the lesson of studying antiquity that we have discussed in our
earlier talks. Writers in classical antiquity, like Bronze Age
Near Eastern rulers before them and the Biblical prophets,
recognized that a rentier economy tends to destroy the economy's
productivity and widespread prosperity, and ultimately its
survival. In today's world the Finance, Insurance, and Real
Estate [FIRE] sector and monopolies are destroying the rest of
the economy, using financial wealth to take over the government
and disable its ability to prevent their operating in corrosive
and predatory ways.
JS: Why aren't more people up in arms?
MH: They're only up in arms if they believe that there is an
alternative. As long as the vested interests can suppress any
idea that there is an alternative, that matters don't have to be
this way, people just get depressed. In our third interview you
spoke about Socrates and the Stoics producing a philosophy of
lamentation and resignation. By his day there seemed no solution
except to denounce wealth. When matters got much worse in the
Roman Empire, wealth was abhorred. That became the message of
What is needed is to define the scope of the alternative that
you want. How can the economy grow when households, business,
and government have to pay more and more of their revenue to the
financial sector, which then turns around and lends its interest
and related income out to indebt the economy even more? The
effect is to extract even more income. Rising government debt
and tax cuts for the rentiers lead to the privatization of
public infrastructure and natural monopolies. Higher prices are
charged for tolls to pay for public healthcare, education, roads
and other services that were expected to be provided for free a
century ago. Financialized privatization thus creates a
high-rent, high-cost economy - the opposite of industrial
capitalism evolving into socialism to finally free society from rentier income.
JS: Wouldn't that be based on the insatiable desire [ἀπληστία,
aplêstia] for money and the super-rich [ὑπέρπλουτοι,hyper-ploutoi]
oligarchs in Book 8 of Plato's Republic? So we get back to my
question: Is the behavior of the super-rich a constant in human
MH: Money-love [φιλοχρηματία, philochrêmatia] has always been
extreme because wealth is addictive. But their dynamic of credit
- other peoples' debts— increasing at compound interest is mathematized and the economy is put on automatic pilot to
self-destruct. Its business plan to "create wealth" by making
financial gains at somebody else's expense, without limit. This
kind of financial wealth is a zero-sum activity. The wealth of
the creditor class, the One Percent, is achieved by indebting
the 99 Percent.
JS: Why is it a zero-sum activity?
MH: A zero-sum activity is when one party's gain is another's
loss. Instead of income paid to creditors being reinvested in
means of production to help the economy grow, it's spent on
buying more assets. The most wasteful examples are corporate
stock buyback programs and financial raids. And the largest
effect of financialization occurs as loans and Quantitative
Easing simply bid up the price of real estate, stocks, bonds and
other assets. The effect is to put housing and a retirement
income further out of range of people who have to live by
working for wages and salaries instead of living off absentee
ownership, interest and financial asset-price gains.
JS: Why is this being done instead of investing in the economy
to help the population live a better and more prosperous life?
MH: The tax and regulatory system is set up to make financial
gains or create monopoly privileges. That is quicker and more
certain, especially in an economy shrinking as a result of
financialization and the austerity it imposes. It's hard to make
profits by investing in a shrinking economy suffering from debt
deflation and a squeeze on family budgets to pay for health
care, education and other basic needs.
JS: So it becomes more about extraction. Let's come back to
Global Climate Change and rising sea levels as a foundation of
American foreign policy.
MH: Since the 19th century, American policy has been based on the
recognition that GDP growth reflects rising energy use per
capita. Rising productivity is almost identical with the curve
of energy use per worker. That was the basic premise of E.
Peshine Smith in 1853, and subsequent writers, whom I describe
in America's Protectionist Takeoff: 1918-1914. The policy
conclusion is that if you can control the source of energy - which remains mainly oil and coal
- then you can control global
GDP growth. That is why Dick Cheney invaded Iraq: to grab its
oil. It is why Trump announced his intention to topple Venezuela
and take its oil.
If other nations are obliged to buy their oil from the United
States or its companies, then it's in a monopoly position to
turn off their electricity (like the United States did to
Venezuela) and hurt their economies if they don't acquiesce in a
world system that lets American financial firms come in and buy
out their most productive monopolies and privatize their public
domain. That's why America's foreign policy is to monopolize the
world's oil, gas and coal in order to have a stranglehold on the
rate of growth of other countries by being able to deny them
energy. It's like denying countries food in order to starve them
out. The aim is to exploit Europe, Asia, Africa and Latin America
what Rome exploited its Empire.
JS: Would you be comfortable using words like evil to describe
what's going on now?
MH: Evil essentially is predatory and destructive behavior.
Socrates said that it ultimately is ignorance, because nobody
would set out intentionally to do it. But in that case, evil
would be an educational system that imposes ignorance and tunnel
vision, distracting attention from understanding how economic
society actually works in destructive ways. On that logic,
post-classical neoliberal economics and the Chicago Boys are
evil because their ideology breeds ignorance and leads its
believers to act in ways that are injurious to society,
preventing personal fulfillment through economic growth. Evil is
a policy that makes most of society poorer, simply in order to
enrich an increasingly wealth-addictive rentier layer at the
top. Werner Sombart described the bourgeoisie as floating like a
globules of fat on top of a soup.
JS: This is now happening on a path that follows an exponential
extreme. I guess global warming makes it particularly evil.
We're not simply talking about taking advantage of other people
within a society, we're talking about destruction of the planet
and its environment.
MH: Economists dismiss this as an "externality," that is,
outside the scope of their models. So these models are
deliberately ignorant. You could say that this makes them evil.
JS: That is what I've suspected since we started the Iraq War in
MH: America's military buildup, its anti-environmental policy
and global wars are part of the same symbiotic strategy. The
reason why America will not be part of a real effort to mitigate
global warming is that its policy is still based on grabbing the
oil resources of the Near East, Venezuela, and everywhere else
that it can. Also, the oil industry is the most tax-exempt and
politically powerful sector. If it also happens to be the
primary cause of global warming, that is viewed as just
collateral damage to America's attempt to control the world by
controlling the oil supply. In that sense the environmental
impasse is a byproduct of American imperialism.
JS: What's hopeful in the United States right now? What is a
possible good outcome?
MH: T he precondition would be for people to realize that there
is an alternative. Starting with wiping out of student debts,
they can realize that the overall debt overhead can be wiped out
without hurting the economy - and indeed, rescuing it from the
financial rentier class inasmuch as all debts on the liabilities
side of the balance sheet have their counterpart on the asset
side as the savings of today's financial oligarchy, which is
doing to the U.S. economy what Rome's Senate did to the ancient
JS: How can people proceed from here?
MH: Understanding must come first. Once you have to have a sense
of history, you realize that there is an alternative. You also
see what happens when a creditor oligarchy gets strong enough to
prevent any public power from writing down debts and to prevent
attempts to tax it.
You have to do to America today what the Republicans did after
the Civil War: You have to have a new university curriculum
dealing with economic history, the history of economic thought
and the real world's long-term development.
JS: And what would be the premise for such economic history?
MH: T he starting point is to realize that civilization began in
the ancient Near East, and made a turn to oppose a strong public
regulatory sector in Classical Greece and Rome. The long-term
tension is the eternal fight by the oligarchy of creditors and
large land owners to reduce the rest of society to serfdom, and
to oppose strong rulers empowered to act in the economy's
long-term interest by creating checks against this polarization.
JS: So how much longer does this go on - for months, for years,
MH: It always goes on longer than you think it will. Inertia has
a great elastic self-reinforcing power. Polarization will widen
until people believe that there is an alternative and decide to
fight for it. Two things are required for this to happen: First,
a large proportion of people need to see that the economy is
impoverishing them, and that the existing picture of what is
happening is misleading. Instead of wealth trickling down, it is
defying gravity and sucking income up from the base of the
economic pyramid. People are having to work harder just to stay
in place, until their life style breaks down.
Second, people must realize that it doesn't have to be this way.
There is an alternative
JS: Right now most people think that government regulation and
progressive taxation will make things worse, and that the
wealthy are job creators, not job destroyers. They think that
the system needs to be bolstered, not replaced, because the
alternative is "socialism" - that is, what the Soviets did, not
what Franklin Roosevelt was doing. But today bailing out the
banks and giving subsidies to new employers is said to be for
our own good.
MH: That's what the Romans told their provinces. Everything they
did was always to preserve "good order," meaning open
opportunities for their own wealth grabbing. They never said
they were out to destroy and loot other societies. Madeline
Albright followed this rhetorical pattern in describing as
being, like the Romans and France's brutal mission civilisatrice,
a program to uplift the world free-market efficiency. For
performing this service, the imperial power takes all the money
that its colonies, provinces and allies can generate. That's why
the U.S. meddles in foreign politics, as we have just seen in
Ukraine, Libya and Syria.
JS: You've described the greatest meddling as distorting the
narrative of history to depict creditor and rentier drives
toward oligarchy as being democratic and helping to raise living
standards and culture. Your books show just the opposite.
MH: Thank you.