So “what’s happening in the banking crisis today is that debts grow faster than the economy can pay. And so when the interest rates finally began to be raised by the Federal Reserve, this caused a crisis for the banks.”
The verdict is merciless: “What impoverished the population of the Roman Empire” bequeathed a “creditor-based body of legal principles to the modern world.”
Predatory oligarchies and “Oriental Despotism”
Prof Hudson develops a devastating critique of the “social darwinist philosophy of economic determinism”: a “self-congratulatory perspective” has led to “today’s institutions of individualism and security of credit and property contracts (favoring creditor claims over debtors, and landlord rights over those of tenants) being traced back to classical antiquity as “positive evolutionary developments, moving civilization away from ‘Oriental Despotism’”.
“Rome’s law of contracts established the fundamental principle of Western legal philosophy giving creditor claims priority over the property of debtors – euphemized today as ‘security of property rights’. Public expenditure on social welfare was minimized – what today’s political ideology calls leaving matters to ‘the market’. It was a market that kept citizens of Rome and its Empire dependent for basic needs on wealthy patrons and moneylenders – and for bread and circuses, on the public dole and on games paid for by political candidates, who often themselves borrowed from wealthy oligarchs to finance their campaigns.”
Any similarity with the current system led by the Hegemon is not mere coincidence. Hudson: “These pro-rentier ideas, policies and principles are those that today’s Westernized world is following. That is what makes Roman history so relevant to today’s economies suffering similar economic and political strains.”
Prof. Hudson reminds us that Rome’s own historians – Livy, Sallust, Appian, Plutarch, Dionysius of Halicarnassus, among others – “emphasized the subjugation of citizens to debt bondage.” Even the Delphic Oracle in Greece, as well as poets and philosophers, warned against creditor greed. Socrates and the Stoics warned that “wealth addiction and its money-love was the major threat to social harmony and hence to society.”
And that brings us to how this criticism was completely expunged from Western historiography. “Very few classicists,” Hudson notes, follow Rome’s own historians describing how these debt struggles and land grabs were “mainly responsible for the Republic’s Decline and Fall.”
Hudson also reminds us that the barbarians were always at the gate of the Empire: Rome, in fact, was “weakened from within”, by “century after century of oligarchic excess.”
So this is the lesson we should all draw from Greece and Rome: creditor oligarchies “seek to monopolize income and land in predatory ways and bring prosperity and growth to a halt.” Plutarch was already into it: “The greed of creditors brings neither enjoyment nor profit to them, and ruins those whom they wrong. They do not till the fields which they take from their debtors, nor do they live in their houses after evicting them.”
Beware of pleonexia
It would be impossible to fully examine so many precious as jade offerings constantly enriching the main narrative. Here are just a few nuggets (And there will be more: Prof. Hudson told me, “I’m working on the sequel now, picking up with the Crusades.”)
Prof. Hudson reminds us how money matters, debt and interest came to the Aegean and Mediterranean from West Asia, by traders from Syria and the Levant, around 8th century B.C. But “with no tradition of debt cancellation and land redistribution to restrain personal wealth seeking, Greek and Italian chieftains, warlords and what some classicists have called mafiosi [ by the way, Northern European scholars, not Italians) imposed absentee land ownership over dependent labor.”
All of us who studied Plato and Aristotle in college may remember how they framed the whole problem in the context of pleonexia (“wealth addiction”) – which inevitably leads to predatory and “socially injurious” practices. In Plato’s Republic, Socrates proposes that only non-wealthy managers should be appointed to govern society – so they would not be hostages of hubris and greed.
The problem with Rome is that no written narratives survived. The standard stories were written only after the Republic had collapsed. The Second Punic War against Carthage (218-201 B.C.) is particularly intriguing, considering its contemporary Pentagon overtones: Prof. Hudson reminds us how military contractors engaged in large-scale fraud and fiercely blocked the Senate from prosecuting them.
Prof. Hudson shows how that “also became an occasion for endowing the wealthiest families with public land when the Rome state treated their ostensibly patriotic donations of jewelry and money to aid the war effort as retroactive public debts subject to repayment”.
After Rome defeated Carthage, the glitzy set wanted their money back. But the only asset left to the state was land in Campania, south of Rome. The wealthy families lobbied the Senate and gobbled up the whole lot.
With Caesar, that was the last chance for the working classes to get a fair deal. In the first half of the 1st century B.C. he did sponsor a bankruptcy law, writing down debts. But there was no widespread debt cancellation. Caesar being so moderate did not prevent the Senate oligarchs from whacking him, “fearing that he might use his popularity to ‘seek kingship’” and go for way more popular reforms.
After Octavian’s triumph and his designation by the Senate as Princeps and Augustus in 27 B.C., the Senate became just a ceremonial elite. Prof Hudson summarizes it in one sentence: “The Western Empire fell apart when there was no more land for the taking and no more monetary bullion to loot.” Once again, one should feel free to draw parallels with the current plight of the Hegemon.
Time to “uplift all labor”
In one of our immensely engaging email exchanges, Prof. Hudson remarked how he “immediately had a thought” on a parallel to 1848. I wrote in the Russian business paper Vedomosti: “After all, that turned out to be a limited bourgeois revolution. It was against the rentier landlord class and bankers – but was as yet a far cry from being pro-labor. The great revolutionary act of industrial capitalism was indeed to free economies from the feudal legacy of absentee landlordship and predatory banking — but it too fell back as the rentier classes made a comeback under finance capitalism.”
It’s no wonder “socialism with Chinese characteristics” spooks the Hegemon creditor oligarchy to the point they are even risking a Hot War. What’s certain is that the road to Sovereignty, across the Global South, will have to be revolutionary: “Independence from U.S. control is the Westphalian reforms of 1648 — the doctrine of non-interference in the affairs of other states. A rent tax is a key element of independence — the 1848 tax reforms. How soon will the modern 1917 take place?”
Let Plato and Aristotle weigh in: as soon as humanly possible.