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William Goetzmann, Money Changes Everything: How Finance Made Civilization Possible (Princeton University Press, 2016)

Debt mounts up faster than the means to pay. Yet there is widespread lack of awareness regarding what this debt dynamic implies. From Mesopotamia in the third millennium BC to the modern world, the way in which society has dealt with the buildup of debt has been the main force transforming political relations.

Financial textbook writers tell happy-face fables that depict loans only as being productive and helping debtors, not as threatening social stability. Government intervention to promote economic growth and solvency by writing down debts and protecting debtors at creditors’ expense is accused of causing an economic crisis (defined as bankers and bondholders not making as much money as they thought they would). Creditor lobbyists are not eager to save indebted consumers, businesses and governments from bankruptcy and foreclosure. The result is a biased body of analysis, which some extremists project back throughout history.

MoneyChangesEverything The most recent such travesty is William Goetzmann’s Money Changes Everything, widely praised in the financial press for its celebration of finance through the ages. A Professor of Finance and Management at the Yale School of Management, he credits “monetization of the Athenian economy” – the takeoff of debt – as playing “a central role in the transition to … democracy” (p. 17), and assures his readers that finance is inherently democratic, not oligarchic: “The golden age of Athens owes as much to financial litigation as it does to Socrates” (p. 1). That litigation consisted mainly of creditors foreclosing on the property of debtors.

Goetzmann makes no mention of how Solon freed Athenians from debt bondage with his seisachtheia (“shaking off of burdens”) in 594. Also airbrushed out of history is the subsequent buildup of financial oligarchies throughout the Mediterranean. Cities of the Achaean League called on Rome for military intervention to prevent Sparta’s kings Agis, Cleomenes and Nabis from cancelling debts late in the third century BC.

Violence has often turned public policy in favor of creditors, despite what philosophers and indeed most people believed to be fair, just and stable. Rome’s own Social War opened with the murder of supporters of the pro-debtor Gracchi brothers in 133 BC. By the time Augustus was crowned emperor in 29 BC, the die was cast. Creditor elites ended up stifling prosperity, reducing at least 15 percent (formerly estimated as a quarter) of the Empire’s population to bondage. The Roman legal principle placing creditor rights above the property rights of debtors has been bequeathed to the modern world.

The Bronze Age was not yet ripe for oligarchies to break anywhere near as free of palace control as occurred in classical Greece and Rome. But to Goetzmann the creditor takeover is the essence of progress, despite the economic polarization and Dark Age it brought on for the 99 Percent.

 

Misrepresenting why individuals ran into debt in ancient economies

Ignoring the abundant documentation, the author misrepresents why early economies ran up personal debt. He falls into the modernist trap of depicting all debt as resulting from borrowers taking out loans, eager to invest the proceeds profitably. He does not recognize debts as accruing in the form of unpaid taxes or fees. Yet this was the case with most Mesopotamian debts, which is where he starts his narrative. Personal debts subject to royal Clean Slate edicts did not result from money lending, but accrued as obligations owed to the palace and its collectors – for example, to providers of temple or palace services such as boatmen, “ale women” and so forth.[1]See Cornelia Wunsch, “Debt, Interest, Pledge and Forfeiture in the Neo-Babylonian and Early Achaemenid Period: The Evidence from Private Archives,” in Michael Hudson and Marc Van De Mieroop, eds., Debt and Economic Renewal in the Ancient Near East (CDL Press 2002), pp. 221-255. These payments were to be made at harvest time. But sometimes the harvests failed, as a result of drought, flooding or war.

Taking it as an article of faith that debt always benefits the “borrower,” Goetzmann does not recognize any need to write down debts under such conditions. His blind spot regarding the problems that arose when crop failure or military hostilities prevented cultivators from paying their debts leads him to single out a royal edict from Rim-Sin of Larsa (1822-1763) that allegedly caused the quite modern-sounding “great crash of 1788.”

 

The idea that Clean Slate edicts were a “crash”

Mesopotamian rulers are documented as protecting their citizenry from foreclosing creditors by cancelling debts since at least as early as Enmetena of Lagash c. 2400 BC. By the Old Babylonian epoch (2000-1800 BC) it was customary for nearly every Near Eastern ruler to cancel personal debts upon taking the throne, and again as economic or military conditions required – e.g., if a flood or other natural disaster or military disturbance prevented harvest debts from being paid on a widespread basis. Goetzmann treats this normal practice of protecting debtors from losing their liberty (and hence their ability to serve in the army and provide corvée labor on public building projects) as if it were an isolated example, not the rule – and as if it caused a crisis, not prevented it.

Rim-Sin is reported to have cancelled debts on three occasions.[2]F. R. Kraus, Königliche Verfügungen in altbabylonischer Zeit (Leiden, 1984). On Rim Sin’s measures see Charpin, Archives familiales et propriete privee in Babylonie ancienne Geneva Paris 1980), pp. 273f. and 133f. and W. G. Lambert, Babylonian Wisdom Literature (Oxford, 1960; 2nd ed. 1967), pp. 54f. But only agrarian debts for consumption or public fees were subject to such Clean Slate edicts. Like other rulers of his epoch, Rim-Sin evidently recognized that if he permitted usury and debt bondage to persist, much of the population would lose its land and be unable to provide labor services or fight in the army. He needed “warriors from abroad, from the surrounding deserts, who had to be attracted by agreeable conditions.” That may have been the proximate cause of Rim-Sin’s moves to break the influence of powerful creditors “and to favor his soldiers, for example, by means of the loan of fields, upon which taxes were levied when the soldiers were not on active service.”[3]W. F. Leemans, The Old Babylonian Merchant: His Business and Social Position (Leiden, 1950), p. 122. The economy was saved, not the creditors (mainly collectors or officials in the palace bureaucracy).

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As for commercial “silver” loans and investments in trade ventures, they were not affected by these royal decrees. And even in this commercial sphere, economies hardly could have worked (nor can they survive today) without leeway to bring debts in line with the ability to pay. In the case of long-distance trade, financial “silent partners” typically consigned goods or lent money to travelling merchants in exchange for receiving double the value of their original advance after five years. But if a ship were lost or its cargo taken by pirates, or if a caravan were robbed, the merchant was not liable to pay. This debt forgiveness under extenuating circumstances remained a common legal feature from the Laws of Hammurabi down through Roman law.

After misrepresenting Rim-Sin’s edict as “eliminating all debt by royal decree,” he speculates: “Perhaps he himself or those close to him had gotten into debt” (pp. 57f.) But Goetzmann’s reading reverses the actual situation. Bronze Age palaces were society’s major creditors, not debtors! The agrarian “barley debts” that Rim-Sin cancelled were not those that he owed, but those that the population owed to his palace.

Abundant historical documentation exists that could have saved Goetzmann from his embarrassing insistence that finance and money itself arose as individualistic arrangements by private-sector creditors with no role for government, and that it always is best to pay all debts, without regard for the social and economic consequences. When Hammurabi lay dying in 1749 BC, his son Samsuiluna wrote a letter saying that he found the land so burdened by debt that he remitted arrears owed by many types of royal tenants. To revive their economic position he “restored order (misharum) in the land,” directing that tablets recording non-commercial debts be broken so as to cancel the agrarian debts that had accumulated since the last such misharum act thirteen years earlier (in Hammurabi’s 30th year, 1762). “In the land, nobody shall move against the ‘house’ of the soldier, the fisher, and other subjects.”[4]Translations of this letter (TCL 17 76) in Leo Oppenheim. Ancient Mesopotamia (1965), p. 157, and Letters from Mesopotamia (1967), and F. R. Kraus, Königliche Verfügungen (1984), p. 67.

Goetzmann does acknowledge that, “perhaps it was a political move to restore popularity with his subjects.” But more than just popularity was involved. Rim-Sin needed their support for his looming fight with Hammurabi, who soon conquered Larsa in 1763. Goetzmann believes that Rim-Sin’s debt cancellation was a disaster – as if it ended a golden age. Writing that Larsa lost power as if “the crash of 1788” was to blame, he seems not to understand that the victor, Hammurabi, proclaimed four debt cancellations to protect his own citizen army during his reign.

Goetzmann cites as his source the respected assyriologist Marc Van De Mieroop of Columbia University. As it happens, he and I co-edited a well-known colloquium in 2000 on debt cancellations in the ancient Near East (see fn 1). Leading assyriologists and Egyptologists traced over a thousand years of royal Clean Slates cancelling agrarian debts owed to the palace, its collectors and other creditors. David Graeber’s bestseller, Debt: The First 5,000 Years (2011) summarizes this volume’s findings for the popular audience. This research would have saved Goetzmann from imagining that Larsa’s debts were owed by rulers to merchants. His aversion to such findings has the effect of wiping his narrative clean of logic that would show any logic for endorsing regulation or cancellation of debt.

Goetzmann does cite the first historical example of compound interest: the Stele of the Vultures boundary stone erected on the irrigated buffer territory between Lagash and Umma citing the reparations that Umma had accrued to Lagash c. 2440 BC. But he does not note that this debt had grown far too large ever to be paid – and hence became a cause of future war. That is the problem with compound interest (and too large reparations debt demands). The rate of interest outruns the debtor’s capacity to pay.

The starting point of financial theory should be recognition of this tendency of debts to be unpayable – that is, unpayable without a massive property transfer, economic polarization and impoverishment. However, today’s vested financial interests do not want to see a reasoned discussion of the repertory and consequences of policy responses to this problem through the ages. The guiding motto is: “If the eye offends thee, pluck it out.” In order to insist that all debts must be paid, the thousands of years of Bronze Age Mesopotamian examples and those of Graeco-Roman antiquity must be censored, because the policy lesson is that bad debts should be written down or annulled.

Asserting that in the abstract, finance “is not intrinsically good or bad,” Goetzmann is unwilling to draw the seemingly obvious conclusion that what determines whether its effects are good or bad depends on whether debts are cancelled when they grow beyond much of the population to pay. To have kept Mesopotamia’s personal debts on the books (or more accurately, on the clay tablets) would have reduced debtors to bondage and led to loss of the land rights that gave them their status as citizens.

It is not hard to see the modern ay relevance. Keeping bad bank loans on the books in 2008 saved bankers and bondholders from taking a loss, but left austerity in its wake by passing the financial losses onto the economy at large.

 

The false assumption that all loans are “productive” and readily payable

Goetzmann’s misreading of antiquity (on which he grounds his bombastic big assumptions about the long sweep of financial history) follows from his narrow view of debt only in terms of personal bargains between creditors and borrowers – to share in a supposedly mutual gain. In reality, the tendency was for debtors to lose their liberty and land to foreclosing creditors – who put their usurious gains into more land acquisition instead of investing in means of production to expand economies.[5]“Entrepreneurs: From the Near Eastern Takeoff to the Roman Collapse,” in David S. Landes, Joel Mokyr, and William J. Baumol, eds., The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times (Princeton: Princeton University Press, 2010):8-39.

It has been to avoid repeating this impoverishing debt dynamic that the past few centuries have seen more humanitarian treatment of debtors. But the past century’s “Austrian” and kindred individualistic “free market” financial theories have created a junk archaeology that depicts monetary and fiscal reform as being against nature and leading to a crash – such as Goetzmann’s fantasy of “the crash of 1788” – instead of avoiding financial distress by restoring economic balance and equity.

 

Goetzmann’s obsolete theory of money as a commodity, not a fiscal institution

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Georg Friedrich Knapp’s State Theory of Money (1905), defines money as what governments accept in payment of taxes or fees. This theory also is called Chartalism. It is confirmed by the assyriological research noted above: Mesopotamian mercantile debts typically were denominated in silver, while personal debts were denominated in grain, above all to the temples and palaces.[6]I trace the background in “The Cartalist/Monetarist Debate in Historical Perspective,” in Edward Nell and Stephanie Bell eds., The State, The Market and The Euro (Edward Elgar, 2003):39-76; “The Archaeology of Money in Light of Mesopotamian Records,” in L. Randall Wray (ed.), Credit and State Theories of Money: The Contributions of A. Mitchell Innes (Edward Elgar, 2004); and “The Development of Money-of-Account in Sumer’s Temples,” in Michael Hudson and Cornelia Wunsch, ed., Creating Economic Order: Record-Keeping, Standardization and the Development of Accounting in the Ancient Near East (CDL Press, Bethesda, 2004):303-329. Their acceptability to these large institutions led the economy at large to accept its valuation.

To defend his “free market” ideology, Goetzmann ignores the character of money as debt, headed by debts owed to governments for taxes or other payments. It is as if we are talking about barter, with money being just a commodity, given value by “markets” with no apparent linkage to government to denominate and pay tax debts. He repeats the century-old threefold view of money as a means of exchange, a measure of value and store of value.

For starters, according to this view, metal was a handy medium of exchange, presumably to barter. A buyer simply pulled out a coin or broke off a piece of metal to pay for food, wool or whatever product was wanted.

Problems quickly arise with this scenario. Who produced the silver? How was counterfeiting avoided? The Bible and Babylonian “wisdom literature” are rife with condemnations of crooked merchants using false weights and measures – a light weight for lending money or buying commodities, and a heavy weight for measuring out repayment of debts.

To avoid such problems, metallic money had to be public in order to be used as a means of payment. Babylonian contracts typically called for settlement in silver of 5/6 or some similar specified purity. From third millennium Sumer down through Greece to Rome (the Temple of Juno Moneta), temples produced the monetary metals and coins. Their role as minters dovetailed with that of overseeing honest weights and measures to prevent fraud.

Money’s second function cited in modern textbooks (which Goetzmann repeats) is to serve as a unit of account, a common measure of value against which other commodities (and labor) are priced. The paradigmatic historical example would seem to be the parity between a Babylonian shekel-weight of silver and a “liter” of barley, fixed by royal edict in for a thousand years, mainly to determine how debts could be paid. Such money was a price schedule of how a specialized economy could make payments, apparently evolving as part of the accounting system that enabled the large institutions to allocate food and raw materials to their labor force, to evaluate output consigned to (or bought from) traders, keep their administrative accounts and denominate debts owed to them. (Later, when Rome developed coinage, its nominal value was maintained even while adulterating its purity.)

But this debt dimension is missing from Goetzmann’s survey.

 

Goetzmann’s failure to understand that “finance” has something to do with debt

Goetzmann’s desire to credit finance for almost everything good and positive in civilization leads him to attribute the origin of writing to finance. This distorts the researches of the archaeologist whom he credits as acting as his informant, Denise Schmandt-Besserat. Her research started half a century ago at Harvard’s Peabody Museum on Neolithic and Early Bronze Age ceramics. It seems that when traders (chieftains or individuals) sent animals, wool or textiles over a distance for trade from about the 9th millennium to the 4th millennium BC, they would indicate each item with a small animal- or geometric-shaped baked clay token, and wrap it in a clay envelope. The recipient of such deliveries would compare what was received with the itemized set of tokens.

In time, Schmandt-Besserat proposed, impressions of these tokens were imprinted on the clay envelope, to indicate the contents. (Many such envelopes have survived). Such tokens were accounting devices. In time, according to the plausible theory, the design of the impression evolved into cuneiform writing.[7]Denise Schmandt-Besserat, Before Writing (2 vols., University of Texas Press, 1992), and How Writing Came About (University of Texas Press, 1996).

The vast majority of cuneiform tablets are accounting records, debt notes and temple and palace accounts, e.g., to distribute rations to the temple labor force and track the delivery and allocation of wool, grain and other raw materials. Prices for silver, grain and a few other basic commodities were administered to create an accounting system to co-measure and allocate resources as well as to denominate payments to themselves. But such fiscal accounting practice is not finance. It is an economic and administrative use of writing, but finance involves debt, not just trade or account-keeping. Goetzmann’s narrative suggests that “finance” exists without a debt dimension.

This basically public institutional setting for writing, accounting, money and archaic interest rates is precisely what the anti-government and pro-creditor Austrian and Chicago Schools of “free market” financial relations oppose. Their censorial view defends the privatization of money as a “market creation,” and hence today’s bank monopoly on credit creation as opposed to government creation of money (They claim that this would be hyperinflationary and lead economies on the road to Zimbabwe – as if bank credit has not fueled a vast asset-price inflation bubble that burst in the 2008 crash.) And as noted above, they also insist that all debts must be paid, even at the cost of impoverishing the economy – as the world has seen most recently in Greece.

Some years ago, a German assyriologist told me why so many members of that discipline choose to publish in German or French instead of in English. The reason is that so many Americans (and also Englishmen) take documentation out of context to force into “crazy” theories. To protect itself from such intervention, the assyriological discipline is isolated from other academic departments. An unfortunate byproduct is that cuneiform studies are rapidly shrinking throughout Europe.

No doubt a contributing factor is that the practices of Bronze Age Mesopotamia and its neighbors controvert the most basic assumptions of today’s free market orthodoxy, above all its denigration of public enterprise and opposition to government money creation (leaving this as a private bank monopoly), and its refusal to acknowledge logic justifying debt writedowns. Goetzmann has used the exclusion of early economic history from the academic curriculum, and hence from popular discussion, as an opportunity to substitute unrealistic pro-creditor assumptions for the reality that he seems to find too abhorrent to inform his readers about.

[1] See Cornelia Wunsch, “Debt, Interest, Pledge and Forfeiture in the Neo-Babylonian and Early Achaemenid Period: The Evidence from Private Archives,” in Michael Hudson and Marc Van De Mieroop, eds., Debt and Economic Renewal in the Ancient Near East (CDL Press 2002), pp. 221-255.

[2] F. R. Kraus, Königliche Verfügungen in altbabylonischer Zeit (Leiden, 1984). On Rim Sin’s measures see Charpin, Archives familiales et propriete privee in Babylonie ancienne Geneva Paris 1980), pp. 273f. and 133f. and W. G. Lambert, Babylonian Wisdom Literature (Oxford, 1960; 2nd ed. 1967), pp. 54f.

[3] W. F. Leemans, The Old Babylonian Merchant: His Business and Social Position (Leiden, 1950), p. 122.

[4] Translations of this letter (TCL 17 76) in Leo Oppenheim. Ancient Mesopotamia (1965), p. 157, and Letters from Mesopotamia (1967), and F. R. Kraus, Königliche Verfügungen (1984), p. 67.

[5] “Entrepreneurs: From the Near Eastern Takeoff to the Roman Collapse,” in David S. Landes, Joel Mokyr, and William J. Baumol, eds., The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times (Princeton: Princeton University Press, 2010):8-39.

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[6] I trace the background in “The Cartalist/Monetarist Debate in Historical Perspective,” in Edward Nell and Stephanie Bell eds., The State, The Market and The Euro (Edward Elgar, 2003):39-76; “The Archaeology of Money in Light of Mesopotamian Records,” in L. Randall Wray (ed.), Credit and State Theories of Money: The Contributions of A. Mitchell Innes (Edward Elgar, 2004); and “The Development of Money-of-Account in Sumer’s Temples,” in Michael Hudson and Cornelia Wunsch, ed., Creating Economic Order: Record-Keeping, Standardization and the Development of Accounting in the Ancient Near East (CDL Press, Bethesda, 2004):303-329.

[7] Denise Schmandt-Besserat, Before Writing (2 vols., University of Texas Press, 1992), and How Writing Came About (University of Texas Press, 1996).

 
• Category: Economics • Tags: Banking System, Financial Debt 
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  1. empty says:

    After Jesus had fasted in the desert and was tempted by the Devil, He started His public career by proclaiming the Acceptable Year of the Lord (reading from the Book of Isaiah):

    The Spirit of the Lord is on me, because he has anointed me to preach the gospel to the poor; …., to preach deliverance to the captives, and recovering of sight to the blind, to set at liberty them that are bruised

    The Acceptable Year was the Jubileum Year when the debts were to be cancelled; so Jesus was running a debt cancellation program, no wonder He gained popular support

    “forgive us our debts, as we forgive our debtors”

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  2. It’s nice to read Hudson’s erudite views on these matters. When I look at America’s political system, I am disheartened. The entrenched interests have no desire to mitigate their greed or lust for power.

    Even if we get a crash of the system it is hard to see how it could be corrected.

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  3. Rome’s own Social War opened with the murder of supporters of the pro-debtor Gracchi brothers in 133 BC.

    Almost every word in this sentence is wrong. The Social War began with the assassination of Marcus Livius Drusus. His concern was not debt but the extension of Roman citizenship to all Latin citizens in Latin cities allied with Rome. I’m guessing that you misunderstand even that the term Social War involves a misunderstanding. In Latin Socii means allies. The Latin term “War of/with the Allies” is inappropriately translated into the English “Social War”. If you got the basic history right you might just begin to get the economic history right and maybe eventually gain a grasp of basic economic principles.

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    • Replies: @Oscar Peterson
    You're right about the Social War which took place in 91-88 BC, decades after the Gracchi. Hudson clearly got that wrong. But your implied criticism of his economic analysis does not follow. That's a separate issue and requires a substantive criticism, which you have not provided.
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  4. Thanks for your excellent piece.

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  5. “so Jesus was running a debt cancellation program, no wonder He gained popular support.”

    And no wonder the Jews hated him.

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  6. AndyBoy says:

    From Mesopotamia in the third millennium BC to the modern world, the way in which society has dealt with the buildup of debt has been the main force transforming political relations.

    However, I believe racial changes are the biggest transformative force in a nation’s history.

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  7. Interesting piece.
    Just where do you have it from that the Austrian school “protects” the creditors from the debtors. Where do you see an Austrian taking sides in this conflict? How does it folow that beeing pro market means being pro debtor (it seems you were yourself led astry by some bank lobbyists)…
    Short summary:
    Certainly no Austrian has ever advocated debt bondage/slavery as collecting payments or tweaking the rules after the deal.(there might have been debates on whether one might Voluntarily agree on that as part of the contract design. This is an ethical question, etc). Certainly no Austrian would confer this right unilaterally to the government for the nonpayment of taxes which you say was the main source of bondage in antiquity.
    Further, no Austrian has ever defended “the right” to create money, for ANY institution private or state (you seem to have less problems with the state inflating). On the contrary, they want this right to be taken away from anybody. The reason is that due to the non-neutrality of money it can be shown that money creation is akin to fraud (and it causes nasty business cycless)….independently of whether the state or private sector inflates, btw.
    This is why they like gold, as its supply is more or less free from the whims of banks and governments (generally the supply of gold from mines is minuscule compared to the stock, obviously not true when you discover a new continent or california)..not perfect, but better than a printing press…
    Hope that helps

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    • Replies: @Bill
    Oh, come on. If indentured servitude (or organ harvesting, say) is permitted as a collection device, it will be present in most consumer debt contracts. It's either illegal or common. The reason indentured servitude, debtors' prisons, and organ harvesting are bad ideas is that the world is full of stupid people who will sign contracts not in their own interest.

    Right wing economists don't really fail to understand this. They pretend to fail to understand it in public. In private, it's all "then don't be stupid, you morons!!! Ha, ha, ha. More cheese for me!"
    , @Clearpoint
    Have you ever read Mises's "Theory of Money and Credit"? Austrian economic theory is merely an extension of Jewish morality, and was created and is still supported solely to defend the lending of money at interest. Of course they want to keep money and credit as a private enterprise. In what other "business" can you "earn" a lot of money without doing anything productive? Jesus Christ and early Christian morality went against this. There is a reason that Jesus Christ threw the money changers out of the temple. He understood that the usurious rates of interest charged by money lenders far exceeded economic productivity, and the superior position of power of the money lenders could only result in the concentration of wealth and power that society produced into very few hands, and the destitution and slavery of everyone else. This is why Austrian economics has an important role for the entrepreneur in the economy --- because the super productivity of the few gifted entrepreneurs is needed to make and keep money lending lucrative. Prof Hudson's classical economic perspective, especially its attack on rentier monopolies, is right on. Money lending is the ultimate rentier monopoly that Austrian economic theory was established to defend. This is the only reason Austrian economic theory hasn't been consigned to the dust bin of history.
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  8. @Jus' Sayin'...

    Rome’s own Social War opened with the murder of supporters of the pro-debtor Gracchi brothers in 133 BC.
     
    Almost every word in this sentence is wrong. The Social War began with the assassination of Marcus Livius Drusus. His concern was not debt but the extension of Roman citizenship to all Latin citizens in Latin cities allied with Rome. I'm guessing that you misunderstand even that the term Social War involves a misunderstanding. In Latin Socii means allies. The Latin term "War of/with the Allies" is inappropriately translated into the English "Social War". If you got the basic history right you might just begin to get the economic history right and maybe eventually gain a grasp of basic economic principles.

    You’re right about the Social War which took place in 91-88 BC, decades after the Gracchi. Hudson clearly got that wrong. But your implied criticism of his economic analysis does not follow. That’s a separate issue and requires a substantive criticism, which you have not provided.

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  9. In Latin Socii means allies.

    While I claim scholarship in neither Roman history nor Latin, I do know enough about translation in general and Latin in particular to point out that the word “socii” has more than one meaning. Here are a few of them:

    Companions, fellows partakers sharers partners, men (as a group), servants, folks…

    Furthermore, as I’m sure you’re aware, the meaning of a word also depends on the context and then there are idioms which cannot be directly translated, so your comment suffers from too limited a translation at least.

    His concern was not debt but the extension of Roman citizenship to all Latin citizens in Latin cities allied with Rome.

    If you’re saying he had only one concern, then I’d bet you’re in error here as well in a sense similar to the idea that WW1 was started by the assassination of the Ferdinand. Nothing could be further from the truth because there was a lot of background to that. The “start” of wars is generally multifactorial and it’s extremely simplistic to attribute wars or the initiation of them to one specific item.

    If you got the basic history right you might just begin to get the economic history right and maybe eventually gain a grasp of basic economic principles.

    First of all, every serious historian knows that there are many interpretations of “history,” some more valid than others. It would be most interesting to read in some detail, what your views of that history are and it would be nice to know what basic economic principles you can teach us.

    In my opinion, Hudson is second to none in his field and I look forward to reading his material. If you can do better, I invite you to do so.

    In any case, one of Hudson’s points is that the useful tool of debt can be misused to the point of abuse and any enlightened society has ways of preventing that and dealing with it if it occurs. If you have any other valid insights to add, I’d like to hear them.

    Anyway, here’s one of my favorite debt quotes.:

    “The curse of usury, it must be owned, is inveterate in Rome, a constant source of sedition and discord; and attempts were accordingly made to repress it even in an older and less corrupt society…

    Financial ruin brought down in its train both rank and reputation, till the Caesar came to the rescue by distributing hundred million sesterces among various counting-houses…”

    TACITUS, ANNALS, Book VI (beginning)1

    http://penelope.uchicago.edu/Thayer/E/Roman/Texts/Tacitus/Annals/6A*.html

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  10. Rehmat says:

    Money brings in corruption, wars and Holocaust – the hallmarks of Western Civilization.

    Werner Sombart (died 1941), German sociologist and author in his 1911 book, ‘The Jews & Modern Capitalism’, claimed that Jewish elites were the dominant beneficiary of Capitalism.

    India’s famous human rights activist and author, Arundhati Roy, in her new book, ‘Capitalism: The Ghost Story’, examines the dark side of democracy in contemporary India, and shows how the demands of the globalized western capitalist banking system has subjugated billions of peoples to the highest and most intense form of racism and exploitation. Watch a videos below to understand the evil world of capitalism and the evildoers who benefit from this system.

    British-born Jewish science journalist, author and former columnist at the Jew York Times, Nicholas Wade in book, A Troublesome Inheritance, has claimed that Jews possess a genetic “adaptation to capitalism”. Wade also argues that humans can be divided into discrete races, and that between those races, there are differences in behavior, temperament, intelligence, and even political and economic structures. Although the specifics of the arguments change, what remains constant is the idea that white people of European descent are inherently smarter, better, more “civilized” than members of other races, especially black Africans and their descendants……

    https://rehmat1.com/2015/01/22/capitalism-is-jewish/

    Read More
    • Replies: @Bill

    Although the specifics of the arguments change, what remains constant is the idea that white people of European descent are inherently smarter, better, more “civilized” than members of other races
     
    Not really. HBD types like Wade, Sailer, Derbyshire, etc typically think that East Asians are smarter and more civilized than are whites.
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  11. And Alexander Hamilton was a man of the people. Ha!

    Read More
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  12. mtn cur says:

    The idea of all this is the transfer of all property to the fat cats, such that a return to absolute monarchy, wherein citizens are property of the state, and the “nobility” are the state. That is to say, governance by those with the motives of swine.

    Read More
    • Replies: @Jacques Sheete
    Bingo!


    Also, due to Just Sayin's comment (thank you "Just!), I went back and reviewed Durant (Durant, “The History of Civilization,” Chap VI, Book 2, Vol 3, pages 111- 127) and also read the article I've linked, https://www.armstrongeconomics.com/writings/2012-2/anatomy-of-a-debt-crisis/

    The bottom line is just what mtn cur stated. The particular history is utterly fascinating, and it will take some study to become familiar with the details, but so far it appears that those who criticize Hudson regarding the "Social Wars" are somewhat off the mark if not totally in error. I hope they flesh out their arguments.

    The online Encyclopedic Britannica and others would seem to agree with Hudson on that point, but I could be wrong, and hope that a good discussion of this ensues.|

    “… Drusus made the last nonviolent civilian attempt to reform the government of republican Rome. Drusus began by proposing colonial and agrarian reform bills. He attempted to resolve the tensions between the senatorial order (the political class) and the equestrian order, or knights (the commercial class).

    Disturbances involving Drusus’s supporters among the allies increased, and the reformer was murdered. His assassin was never discovered. The immediate consequence of his murder was the Social War (91–87), the revolt of the Italian allies.”

    - From “The Encyclopedia Brittanica,” online Written by: E. Badian

    https://www.google.com/search?q=Marcus+Livius+Drusus&oq=Marcus+Livius+Drusus&aqs=chrome..69i57j69i59j69i60&sourceid=chrome&ie=UTF-8

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  13. @mtn cur
    The idea of all this is the transfer of all property to the fat cats, such that a return to absolute monarchy, wherein citizens are property of the state, and the "nobility" are the state. That is to say, governance by those with the motives of swine.

    Bingo!

    Also, due to Just Sayin’s comment (thank you “Just!), I went back and reviewed Durant (Durant, “The History of Civilization,” Chap VI, Book 2, Vol 3, pages 111- 127) and also read the article I’ve linked, https://www.armstrongeconomics.com/writings/2012-2/anatomy-of-a-debt-crisis/

    The bottom line is just what mtn cur stated. The particular history is utterly fascinating, and it will take some study to become familiar with the details, but so far it appears that those who criticize Hudson regarding the “Social Wars” are somewhat off the mark if not totally in error. I hope they flesh out their arguments.

    The online Encyclopedic Britannica and others would seem to agree with Hudson on that point, but I could be wrong, and hope that a good discussion of this ensues.|

    “… Drusus made the last nonviolent civilian attempt to reform the government of republican Rome. Drusus began by proposing colonial and agrarian reform bills. He attempted to resolve the tensions between the senatorial order (the political class) and the equestrian order, or knights (the commercial class).

    Disturbances involving Drusus’s supporters among the allies increased, and the reformer was murdered. His assassin was never discovered. The immediate consequence of his murder was the Social War (91–87), the revolt of the Italian allies.”

    - From “The Encyclopedia Brittanica,” online Written by: E. Badian

    https://www.google.com/search?q=Marcus+Livius+Drusus&oq=Marcus+Livius+Drusus&aqs=chrome..69i57j69i59j69i60&sourceid=chrome&ie=UTF-8

    Read More
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  14. In case anyone’s interested, this gives some of the background on Drusus, who was preceded by the Gracchus brothers. The whole affair, spanning decades, is incredibly interesting and is amazingly relevant today.

    Here’s a sample, from Appian, The Civil Wars
    Horace White, Ed.
    CHAPTER I

    “They did these things in order to multiply the Italian race…so that they might have plenty of allies at home.

    But the very opposite thing happened; for the rich, getting possession of the greater part of the undistributed lands… and adding to their holdings the small farms of their poor neighbors…

    The ownership of slaves itself brought them great gain from the multitude of their progeny…

    Thus the powerful ones became enormously rich and the race of slaves multiplied throughout the country, while the Italian people dwindled in numbers and strength, being oppressed by penury, taxes, and military service.

    If they had any respite from these evils they passed their time in idleness, because the land was held by the rich, who employed slaves instead of freemen as cultivators.”

    Read More
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  15. Bill says:
    @Viennacapitalist
    Interesting piece.
    Just where do you have it from that the Austrian school "protects" the creditors from the debtors. Where do you see an Austrian taking sides in this conflict? How does it folow that beeing pro market means being pro debtor (it seems you were yourself led astry by some bank lobbyists)...
    Short summary:
    Certainly no Austrian has ever advocated debt bondage/slavery as collecting payments or tweaking the rules after the deal.(there might have been debates on whether one might Voluntarily agree on that as part of the contract design. This is an ethical question, etc). Certainly no Austrian would confer this right unilaterally to the government for the nonpayment of taxes which you say was the main source of bondage in antiquity.
    Further, no Austrian has ever defended "the right" to create money, for ANY institution private or state (you seem to have less problems with the state inflating). On the contrary, they want this right to be taken away from anybody. The reason is that due to the non-neutrality of money it can be shown that money creation is akin to fraud (and it causes nasty business cycless)....independently of whether the state or private sector inflates, btw.
    This is why they like gold, as its supply is more or less free from the whims of banks and governments (generally the supply of gold from mines is minuscule compared to the stock, obviously not true when you discover a new continent or california)..not perfect, but better than a printing press...
    Hope that helps

    Oh, come on. If indentured servitude (or organ harvesting, say) is permitted as a collection device, it will be present in most consumer debt contracts. It’s either illegal or common. The reason indentured servitude, debtors’ prisons, and organ harvesting are bad ideas is that the world is full of stupid people who will sign contracts not in their own interest.

    Right wing economists don’t really fail to understand this. They pretend to fail to understand it in public. In private, it’s all “then don’t be stupid, you morons!!! Ha, ha, ha. More cheese for me!”

    Read More
    • Replies: @Viennacapitalist
    Yes, IF permitted...
    Whether it is permitted or not, depends on a hos t of cultural, etc. Factors....
    Factors, which have nothing to do with economic ananlysis per se.
    I do not see how your point invalidates my statements.
    And yes, there are lots of idiots around. So what? Whats your solution? No debt contracts at all...
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  16. Bill says:
    @Rehmat
    Money brings in corruption, wars and Holocaust - the hallmarks of Western Civilization.

    Werner Sombart (died 1941), German sociologist and author in his 1911 book, ‘The Jews & Modern Capitalism’, claimed that Jewish elites were the dominant beneficiary of Capitalism.

    India’s famous human rights activist and author, Arundhati Roy, in her new book, ‘Capitalism: The Ghost Story’, examines the dark side of democracy in contemporary India, and shows how the demands of the globalized western capitalist banking system has subjugated billions of peoples to the highest and most intense form of racism and exploitation. Watch a videos below to understand the evil world of capitalism and the evildoers who benefit from this system.

    British-born Jewish science journalist, author and former columnist at the Jew York Times, Nicholas Wade in book, A Troublesome Inheritance, has claimed that Jews possess a genetic “adaptation to capitalism”. Wade also argues that humans can be divided into discrete races, and that between those races, there are differences in behavior, temperament, intelligence, and even political and economic structures. Although the specifics of the arguments change, what remains constant is the idea that white people of European descent are inherently smarter, better, more “civilized” than members of other races, especially black Africans and their descendants......

    https://rehmat1.com/2015/01/22/capitalism-is-jewish/

    Although the specifics of the arguments change, what remains constant is the idea that white people of European descent are inherently smarter, better, more “civilized” than members of other races

    Not really. HBD types like Wade, Sailer, Derbyshire, etc typically think that East Asians are smarter and more civilized than are whites.

    Read More
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  17. @Bill
    Oh, come on. If indentured servitude (or organ harvesting, say) is permitted as a collection device, it will be present in most consumer debt contracts. It's either illegal or common. The reason indentured servitude, debtors' prisons, and organ harvesting are bad ideas is that the world is full of stupid people who will sign contracts not in their own interest.

    Right wing economists don't really fail to understand this. They pretend to fail to understand it in public. In private, it's all "then don't be stupid, you morons!!! Ha, ha, ha. More cheese for me!"

    Yes, IF permitted…
    Whether it is permitted or not, depends on a hos t of cultural, etc. Factors….
    Factors, which have nothing to do with economic ananlysis per se.
    I do not see how your point invalidates my statements.
    And yes, there are lots of idiots around. So what? Whats your solution? No debt contracts at all…

    Read More
    • Replies: @Bill
    Ideally, I think recourse lending to consumers should be illegal. A creditor should get, at most, his security in the event of default. In addition, I think there should be fairly strict price controls on interest rates. I can't think of a reason a consumer should pay more than a 10% real rate ever. Even that seems high. So, maybe lower. Business lending is different, though even there I think the current regulatory structure likely encourages too much debt.

    To see the problem, consider your likely reaction to these limitations. You're going to tell me that creditors need recourse and high interest rates to compensate them for risk of default. And that the poor won't be able to get loans if the risk of lending to them can't be compensated. But significant risk of default comes, specifically, from people taking out loans they should not take out or from people being the kind of people who should never take out loans. So, it's fine that that kind of risk should not be compensated for, and it's fine (not fine, good) that those people can't get loans. They are better off without them.

    The limitations I suggest would not interfere with responsible borrowing at all. You could still get a mortgage or a car loan, for example. Likely, you couldn't get a student loan, though. Many people wouldn't be able to get credit cards or unsecured personal loans. These are good things. And, yes, I do know better than stupid people what financial products they should use.

    Getting people addicted to credit card debt is not doing them a favor, and both Austrians and Neoclassicals are full of crap when they say it is. I was once a utilitarian, libertarian, neoclassical kind of guy, so I understand the arguments, and they really do rely on the agents being smart enough not to do obviously self-destructive things.

    The fact that airline price regulation was stupid doesn't mean usury laws are stupid. The fact that leftoids were wrong about Standard Oil being evil doesn't mean they are wrong about Capital One being evil. Stopped clocks and all that.
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  18. Bill says:
    @Viennacapitalist
    Yes, IF permitted...
    Whether it is permitted or not, depends on a hos t of cultural, etc. Factors....
    Factors, which have nothing to do with economic ananlysis per se.
    I do not see how your point invalidates my statements.
    And yes, there are lots of idiots around. So what? Whats your solution? No debt contracts at all...

    Ideally, I think recourse lending to consumers should be illegal. A creditor should get, at most, his security in the event of default. In addition, I think there should be fairly strict price controls on interest rates. I can’t think of a reason a consumer should pay more than a 10% real rate ever. Even that seems high. So, maybe lower. Business lending is different, though even there I think the current regulatory structure likely encourages too much debt.

    To see the problem, consider your likely reaction to these limitations. You’re going to tell me that creditors need recourse and high interest rates to compensate them for risk of default. And that the poor won’t be able to get loans if the risk of lending to them can’t be compensated. But significant risk of default comes, specifically, from people taking out loans they should not take out or from people being the kind of people who should never take out loans. So, it’s fine that that kind of risk should not be compensated for, and it’s fine (not fine, good) that those people can’t get loans. They are better off without them.

    The limitations I suggest would not interfere with responsible borrowing at all. You could still get a mortgage or a car loan, for example. Likely, you couldn’t get a student loan, though. Many people wouldn’t be able to get credit cards or unsecured personal loans. These are good things. And, yes, I do know better than stupid people what financial products they should use.

    Getting people addicted to credit card debt is not doing them a favor, and both Austrians and Neoclassicals are full of crap when they say it is. I was once a utilitarian, libertarian, neoclassical kind of guy, so I understand the arguments, and they really do rely on the agents being smart enough not to do obviously self-destructive things.

    The fact that airline price regulation was stupid doesn’t mean usury laws are stupid. The fact that leftoids were wrong about Standard Oil being evil doesn’t mean they are wrong about Capital One being evil. Stopped clocks and all that.

    Read More
    • Replies: @Viennacapitalist
    neither me nor any Austrian has ever advocated the heavy use of consumer loans.
    However, Empirical evidence tells us that forbidding them leads to loan sharking, price ceiligns lead to workrounds in the form of fees etc. So your measures likely wont work. But maybe that state of affairs is preferable....
    By the way: the high interest rate on consumer loans isnt only about default risk, but about the comparatively high cost of collecting a, say 3000 usd loan...
    Dont get me wrong: i have the same view on the toxic nature of these loans, but I believe they exist due to money supply expansions, i.e. In a sound money system they would barely exist.
    Consumer loans are highly unattractive for banks. The reason it looks profitable for some banks in the us, is because the money supply has been only going up, i.e. The banks have yet to pay a price for that...subprime lending did not work out to well, if you remember...

    By the way: 30 year mortgages are problematic as well, from an Austrian perspective (Tough not from a neoclassical one, so do not put these two schools in one basket please)


    Conclusion: fix the money supply, and after a wave of defaults there will be way less consumer loans. No need for usury laws that are difficult to enforce anyway...(not to say there wont be any consumer loans at all)
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  19. Art says:

    Hmm – 3036 words on the history of debt in the last 5,000 years, and not one word is – Jew!

    This is indicative of why America can never come up with the right conclusions and answers to its problems. If the problem involves Jews – then the whole truth cannot be discussed and wrong answers prevail – this is killing America.

    Look at the last thirty years – American debt has skyrocketed and the banking system that revolves around interest – pays no interest. The whole big money system has become a means to transfer wealth to the Jew tribe.

    The Federal Reserve’s job is to regulate credit and debt for the WHOLE nation. Bubbles Greenspan, Helicopter Ben Bernanke, and Granny Yellen (all Jews) have financial bubble after financial bubble — junk bonds, savings and loan, the internet, housing, collage, and now the stock market. In the process the average American has less disposable income and Jew wealth has compounded. The wealth in America now goes to the supper wealthy 1% Jews.

    Those are the hard undisputable facts. When are those facts going to be written about?

    As history must reckon – this is a crime – a stone cold criminal outcome.

    Read More
    • Replies: @Mis(ter)Anthrope
    The same thought occurred to me. But hey, all of Hildabeast's major donors are Jews and one of the biggest (Haim Saban) has come right out and said he is a one issue guy and that issue is Israel. Not America, Israel.

    So our next President will have been bought and paid for by agents of a foreign country. And they don't even try to hide it. That tells you the true power the Jews and the Holocaust narrative they never shut up about.
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  20. @Viennacapitalist
    Interesting piece.
    Just where do you have it from that the Austrian school "protects" the creditors from the debtors. Where do you see an Austrian taking sides in this conflict? How does it folow that beeing pro market means being pro debtor (it seems you were yourself led astry by some bank lobbyists)...
    Short summary:
    Certainly no Austrian has ever advocated debt bondage/slavery as collecting payments or tweaking the rules after the deal.(there might have been debates on whether one might Voluntarily agree on that as part of the contract design. This is an ethical question, etc). Certainly no Austrian would confer this right unilaterally to the government for the nonpayment of taxes which you say was the main source of bondage in antiquity.
    Further, no Austrian has ever defended "the right" to create money, for ANY institution private or state (you seem to have less problems with the state inflating). On the contrary, they want this right to be taken away from anybody. The reason is that due to the non-neutrality of money it can be shown that money creation is akin to fraud (and it causes nasty business cycless)....independently of whether the state or private sector inflates, btw.
    This is why they like gold, as its supply is more or less free from the whims of banks and governments (generally the supply of gold from mines is minuscule compared to the stock, obviously not true when you discover a new continent or california)..not perfect, but better than a printing press...
    Hope that helps

    Have you ever read Mises’s “Theory of Money and Credit”? Austrian economic theory is merely an extension of Jewish morality, and was created and is still supported solely to defend the lending of money at interest. Of course they want to keep money and credit as a private enterprise. In what other “business” can you “earn” a lot of money without doing anything productive? Jesus Christ and early Christian morality went against this. There is a reason that Jesus Christ threw the money changers out of the temple. He understood that the usurious rates of interest charged by money lenders far exceeded economic productivity, and the superior position of power of the money lenders could only result in the concentration of wealth and power that society produced into very few hands, and the destitution and slavery of everyone else. This is why Austrian economics has an important role for the entrepreneur in the economy — because the super productivity of the few gifted entrepreneurs is needed to make and keep money lending lucrative. Prof Hudson’s classical economic perspective, especially its attack on rentier monopolies, is right on. Money lending is the ultimate rentier monopoly that Austrian economic theory was established to defend. This is the only reason Austrian economic theory hasn’t been consigned to the dust bin of history.

    Read More
    • Replies: @Viennacapitalist
    The theory of money and credit is not about lending at interest rates, but about the mismatches in repayment structures between assets and liabilities of banks that lead to low interest rates and their consequences. The banks usually do not fail because the rate is too low, but because of a liqidity crisis.
    And mises never defends the banks, on the contrary...he is heavily critisizing the then prevailing practice... So you got that wrong, sorry

    Further, catholic theoligicians have had alternating view on this matter over the courseo fthe last two millenia and have revised their views, as far as I know. Pointing out a specific quote (out of context) is not really satisfactory.
    If you want to refute mises, you better bring some (logical) arguments, rather than some vague reference to jewish morality....
    As mises said: there is only ONE logic....
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  21. @Bill
    Ideally, I think recourse lending to consumers should be illegal. A creditor should get, at most, his security in the event of default. In addition, I think there should be fairly strict price controls on interest rates. I can't think of a reason a consumer should pay more than a 10% real rate ever. Even that seems high. So, maybe lower. Business lending is different, though even there I think the current regulatory structure likely encourages too much debt.

    To see the problem, consider your likely reaction to these limitations. You're going to tell me that creditors need recourse and high interest rates to compensate them for risk of default. And that the poor won't be able to get loans if the risk of lending to them can't be compensated. But significant risk of default comes, specifically, from people taking out loans they should not take out or from people being the kind of people who should never take out loans. So, it's fine that that kind of risk should not be compensated for, and it's fine (not fine, good) that those people can't get loans. They are better off without them.

    The limitations I suggest would not interfere with responsible borrowing at all. You could still get a mortgage or a car loan, for example. Likely, you couldn't get a student loan, though. Many people wouldn't be able to get credit cards or unsecured personal loans. These are good things. And, yes, I do know better than stupid people what financial products they should use.

    Getting people addicted to credit card debt is not doing them a favor, and both Austrians and Neoclassicals are full of crap when they say it is. I was once a utilitarian, libertarian, neoclassical kind of guy, so I understand the arguments, and they really do rely on the agents being smart enough not to do obviously self-destructive things.

    The fact that airline price regulation was stupid doesn't mean usury laws are stupid. The fact that leftoids were wrong about Standard Oil being evil doesn't mean they are wrong about Capital One being evil. Stopped clocks and all that.

    neither me nor any Austrian has ever advocated the heavy use of consumer loans.
    However, Empirical evidence tells us that forbidding them leads to loan sharking, price ceiligns lead to workrounds in the form of fees etc. So your measures likely wont work. But maybe that state of affairs is preferable….
    By the way: the high interest rate on consumer loans isnt only about default risk, but about the comparatively high cost of collecting a, say 3000 usd loan…
    Dont get me wrong: i have the same view on the toxic nature of these loans, but I believe they exist due to money supply expansions, i.e. In a sound money system they would barely exist.
    Consumer loans are highly unattractive for banks. The reason it looks profitable for some banks in the us, is because the money supply has been only going up, i.e. The banks have yet to pay a price for that…subprime lending did not work out to well, if you remember…

    By the way: 30 year mortgages are problematic as well, from an Austrian perspective (Tough not from a neoclassical one, so do not put these two schools in one basket please)

    Conclusion: fix the money supply, and after a wave of defaults there will be way less consumer loans. No need for usury laws that are difficult to enforce anyway…(not to say there wont be any consumer loans at all)

    Read More
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  22. @Art
    Hmm – 3036 words on the history of debt in the last 5,000 years, and not one word is - Jew!

    This is indicative of why America can never come up with the right conclusions and answers to its problems. If the problem involves Jews – then the whole truth cannot be discussed and wrong answers prevail – this is killing America.

    Look at the last thirty years – American debt has skyrocketed and the banking system that revolves around interest – pays no interest. The whole big money system has become a means to transfer wealth to the Jew tribe.

    The Federal Reserve’s job is to regulate credit and debt for the WHOLE nation. Bubbles Greenspan, Helicopter Ben Bernanke, and Granny Yellen (all Jews) have financial bubble after financial bubble --- junk bonds, savings and loan, the internet, housing, collage, and now the stock market. In the process the average American has less disposable income and Jew wealth has compounded. The wealth in America now goes to the supper wealthy 1% Jews.

    Those are the hard undisputable facts. When are those facts going to be written about?

    As history must reckon – this is a crime – a stone cold criminal outcome.

    The same thought occurred to me. But hey, all of Hildabeast’s major donors are Jews and one of the biggest (Haim Saban) has come right out and said he is a one issue guy and that issue is Israel. Not America, Israel.

    So our next President will have been bought and paid for by agents of a foreign country. And they don’t even try to hide it. That tells you the true power the Jews and the Holocaust narrative they never shut up about.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  23. @Clearpoint
    Have you ever read Mises's "Theory of Money and Credit"? Austrian economic theory is merely an extension of Jewish morality, and was created and is still supported solely to defend the lending of money at interest. Of course they want to keep money and credit as a private enterprise. In what other "business" can you "earn" a lot of money without doing anything productive? Jesus Christ and early Christian morality went against this. There is a reason that Jesus Christ threw the money changers out of the temple. He understood that the usurious rates of interest charged by money lenders far exceeded economic productivity, and the superior position of power of the money lenders could only result in the concentration of wealth and power that society produced into very few hands, and the destitution and slavery of everyone else. This is why Austrian economics has an important role for the entrepreneur in the economy --- because the super productivity of the few gifted entrepreneurs is needed to make and keep money lending lucrative. Prof Hudson's classical economic perspective, especially its attack on rentier monopolies, is right on. Money lending is the ultimate rentier monopoly that Austrian economic theory was established to defend. This is the only reason Austrian economic theory hasn't been consigned to the dust bin of history.

    The theory of money and credit is not about lending at interest rates, but about the mismatches in repayment structures between assets and liabilities of banks that lead to low interest rates and their consequences. The banks usually do not fail because the rate is too low, but because of a liqidity crisis.
    And mises never defends the banks, on the contrary…he is heavily critisizing the then prevailing practice… So you got that wrong, sorry

    Further, catholic theoligicians have had alternating view on this matter over the courseo fthe last two millenia and have revised their views, as far as I know. Pointing out a specific quote (out of context) is not really satisfactory.
    If you want to refute mises, you better bring some (logical) arguments, rather than some vague reference to jewish morality….
    As mises said: there is only ONE logic….

    Read More
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