“For us (Western civilization) freedom has been understood to sanction the ability of creditors to demand payment from debtors without restraint or oversight. This is the freedom to cannibalize society. This is the freedom to enslave. This is, in the end, the freedom proclaimed by the Chicago School and the mainstream of American economists.” —John Siman, reviewing Michael Hudson’s “And forgive them their debts” (2018).
Hudson argues that prior to the Roman Empire, previous agrarian Western civilizations enforced periodic debt amnesty in recognition of the inevitable, inevitably corrosive relationship between financial speculators and smallholding producers. After the Romans, Western economic elites were able to outrun the negative consequences of forcing those with the least degrees of freedom to carry the costs of market failure.
Why were elites able to dump economic failure on nonelites, cut and run, from the Romans onward–which is generally, popularly considered the geographic and historical boundary of Western civilization? Perhaps Hudson answers this? My guess: Incentives or balance of power changed in the relation between the king and the oligarchy/financiers. Why from the Romans on did it not usually pay for the king to intervene between financiers and their slaver tendency? Did monarchs become more dependent upon financiers, for example to fight wars and imperial wars? That Sweden was a late exception is interesting–In that country, there was alienation between the king and the aristocracy into the 19th century, which produced a heritage of space for non-elite semi-sovereign agency. Did something–for example the capacity to concentrate agriculture ownership and production–change in societies’ ability to contain economic and political damage within their enslaved smallholder class? This was clearly a part of the British advantage in achieving early capitalism.
But what permitted this shift? Transportation technology, permitting export-oriented agriculture? Perhaps this is why economists are so insistent that agricultural production be export-oriented: Export-oriented agriculture removes control over the means of reproduction from non-elites. [Note to self: Draw the following mechanism out with examples:] Centrally controlling the means of reproduction, as means of production, coheres otherwise-divided elite interests, permits elite solidarity around a shared interest in advancing slavery.
As Siman says, this reproductive-productive controlling ownership is what we define as “economic growth;” it creates certain kinds of heavily-touted benefits, but certainly we recognize it produces vast, deep, endemic costs: epigenetic, environmental, war and violence, institutionalized incapacity to shift into ecologically- and socially-rational directions, stunting smallholders’ development, imposing a sin and shame psychological burden upon smallholders, racialized and genderized alienation and defection, inducing corrupt governance, etc.
With the French Revolution and the mass emigration, however, all of Europe’s financial class were restrained from enslaving the domestic population…slavery was instead imposed in the colonies. To this day, nonelite sovereignty is fragile or highly compromised in the colonies.
Research note: Seems like you could trace this ultra-burden/ultra-freedom discrepancy epigentically.
While debt is the slavery-instituting mechanism, Hudson’s analysis complements and goes back in history beyond Losurdo (2011) and Blyth (2002), locating the connection between Western political economy and slavery not just in liberalism, but liberalism as an extension of that Roman elitist innovation in transferring risk and culpability for market failure onto debtors rather than on gambling financiers.
“Moral Hazard” My Ass
…The last bit of Siman’s article, having to pedantically explain that it’s a little weird that conservative economists’ “Moral Hazard” only applies to smallholders, and doesn’t apply to financial speculators, despite their theory that these speculators are the agents, principally doing everyone a liquidity solid (favor), reminds me of a grad geographic economics class I took as a student. This, and how other blind spots were strutted out as if they were logical achievements, rather than formalized marketing and legitimation flim-flammery, went a long way toward revealing what the Economics discipline actually is and does.