Oligarchy will never cancel the debt
In the Sumerian and Babylonian
era around 2000 BC, it was common for all of the society canceling the debt
when that was too large and wouldn’t able to be paid. Erasing the debt to make
a clean slate is a good way to start economy once again after they had been
burdened with no money left could be spent to buy goods and services after the
debt had absorbed all of the surplus in economy. This was easy to do in the
society when they have a debt which was owned by the state and that’s harder to
do when the debt was owned by private hands that frequently called oligarchy.
And the lasting they wanted is to have a king that would be canceling the debt
and restore the equality.
Rome was the first country in
the history that not cancel the debt, it went to war in Sparta, in Greece to
overthrow the government because of the kings that were not canceling the debt.
The war in the first century BC ended up stripping these countries of everything
they had, not only stripped the temples and gold, it was stripping the public
building, the economy that they were in reproductive capacity, and also water
that made that location similar like desert out of that land. At that time,
Rome said “debt was a debt,” foreclosure and collapsing the land had been something
inevitable that should be done which was creating ecological devastation led to
social, economic, and military problems. The early stages of roman republic you
only had a very gigantic egalitarian land owning system in which peasant got an
opportunity accessing public land and planting crops there, but as the roman
republic became powerful, the lords and generals became appropriate entitled
the land to a private hands, more and more peasants became lack of access that
was only resulting in reducing number of food availability, and other social
destruction occurrence.
What was an absolutely new in
roman-empire which was irreversible concentration of wealth in the top of the
economic pyramid and that was also had a progress in system “you (society) will
never get back what we take from you.” This had been a product of the dark-age
that was written and will led to bring the dark-age again if society doesn’t realize
it. This was the precursor in which when the debt holder is highly concentrated
to the hand of few (oligarchs) that refers to financial class which is only
absorbing the surplus of the economy and converting it into the exponential
growing of debt, the tangible result when the real economy has been surpassed
of debt (couldn’t able to pay the debt) is society should give their asset
(land, building, etc) to the hand of creditor. The another payment in exchange
without asset was to hand over the entire life of individual to serve what the creditor
wanted including body nor soul back then, furthermore, that was the consequences
when the political vehicle (government) was being held by the creditor groups. The
only solution was to create people power movements to overthrow the regime
which hadn’t canceled the debt, this was the only way creating the prosperity
inside the society since this situation is zero sum game (when one party wins,
another should be lose).
Every society in history for
the last 4000 years has found that the debt grow more rapidly than people can
pay, the problem is a small oligarchy of 10% of the population at the top to
whom all of these net debt are owed to. You want to annul the debts to the top
10% that is not going to do, the oligarchy is running things, they would rather
annul to the bottom 90% right to live than to annul the money that’s due to
them. They would rather strip the planet and shrink the population and be paid
rather than give up their claim, that’s the political fight of the 21st
century, how to bring back prosperity and political control in the hand of
society not oligarchy to create the clean slate.
Inclusivity is the key
Deepening how to revive the
economy at once creating prosperity, there are many kinds of countries which
have a close border with their neighbor that almost have the same condition
sociologically or geographically but in fact, they have different level of prosperity.
South Korea and North Korea, USA and Mexico are little examples picturing the
discrepancy of different state’s management on how to create an economic
institution to deliver the justice, access, opportunity especially political
decision that can make a progress on economic development. Economic institution
which is able to shape the outcome of economy significantly is pivotal enough
to be created and used with intervening it through de facto political power since
it is a medium for collecting the interest of voice holders that will be
processed to create a desirable policies. The question is, who control that
institution? Mostly, throughout of history, the elites or famous with the name
of “oligarchs” are the influential groups who control the government. They
always implement their value and interest through legal policy administration
from the government that has been steered by them. There is naïve to excluded
groups outside the oligarch’s circle expecting they will grasp a benefit from
the issued policies without involving directly in public decision making arena.
In a lot of analysis in the
political study area, there are two distinct entities in the political dynamic
which can be described as an elite group and majority group. In every situation
since Sumerian or Babylonian era up to now, the conflict of interest between
them is always happened no matter where the society live on certain systems or
situations, the clash always brings up as society grows up. They have contradictory
behavior toward public policy that they have wanted, for instance is in tax
redistribution, majority group wants higher while the elite group wants less. Meanwhile,
they have conflicting interest that brings zero sum game in the play role that
only could be intervened through controlling the government. When one group
lose its position in that area let say majority group, they should prepare for themselves
for receiving the undesired policies such as being disenfranchised on their
right to get social security and so forth.
When elites or oligarchs
sitting in the public position, they have several kind of behavior to do in
order to prevent their interest is always keeping in place. When society feels
they want to create a movement like a reformation or even revolution because of
injustice that has existed, the elites will do the repression first. It is
purposed to kill the wave of social movement itself. The second, when doing
repression is too costly, the elites will let some of agreements with the
majority (win-win solution) tune up through legal administration, it is called “concession.”
And the third, when the society thinks it isn’t sufficient enough to create a
pressure and overthrow the existing government outright with creating and
distributing justice and prosperity, and they have done to do it, it’s called
bottom up consolidation political power. Finally the last resort after doing
such as revolution by the society is to implement their value and interest
through de jure (legal administration) political power.
Forming up the political power,
it should be distributed to entire of population not only in the hand of few. The
idea is to construct an economic institution which can boost the economy and
share the wealth equally that’s called inclusivity. So, what is the
consequences when a country has the opposite? Nations fail economically because
of extractive institutions. These institutions keep poor countries poor and
prevent them from embarking on a path to economic growth. This is true today in
Africa, in places such as Zimbabwe and Sierra Leone; in South America, in
countries such as Colombia and Argentina; in Asia, in countries such as North
Korea and Uzbekistan; and in the Middle East, in nations such as Egypt. There
are notable differences among these countries. Some are tropical, some are in
temperate latitudes. Some were colonies of Britain; others, of Japan, Spain,
and Russia. They have very different histories, languages, and cultures. What
they all share is extractive institutions. In all these cases the basis of
these institutions is an elite who design economic institutions in order to
enrich themselves and perpetuate their power at the expense of the vast
majority of people in society. The different histories and social structures of
the countries lead to the differences in the nature of the elites and in the
details of the extractive institutions. But the reason why these extractive
institutions persist is always related to the vicious circle, and the
implications of these institutions in terms of impoverishing their citizens are
similar—even if their intensity differs. Finally, we can conclude, in order to generate
the path to achieve prosperity, equality and so on, building up the inclusive
institution grounded by bottom up consolidation movement is the first
foundation that should’ve to be done!
The tendency toward a crisis by misapprehend the
problem
Such forgiveness debt policy
which is aiming to eradicate all of the debt except the debt inside of
relationship between employer and employee to revive the economy actually has a
long pedigree. Long time before Islamic and Christian denunciations of usury,
and even before the Jewish jubilee year of debt forgiveness that Jesus sought
to revive, Sumerian and Babylonian clean slates freed debtors from debt bondage
and prevented land and wealth being owed in the hand of foreclosing creditor. Activists
who lived around the first of Industrial Revolution recognized the problem of
savings and debts mounting up at compound interest. With an almost religious
fervor Saint Simon and his followers in 19th-century France advocated that
banks shift their lending away from interest-bearing loans to equity-based
investment, taking their returns as a share in profits rather than a stipulated
interest charge. Marx described the periodic business crashes of his day as a
result of interest-bearing debt building up. The question is whether our
financial sector today promotes economic growth and rising living standards, or
create unproductive credit and use government to enforce creditor claims by
imposing austerity reducing large swaths of the world population to debt
peonage? The longer we look back in time, the more clearly we find this issue
defined. During World War I, for example, British economists debated whether
German industrial banking, based on equity financing and long-term relationship
with clients, was superior to the more hit-and-run Anglo-Dutch-American
merchant banking that had evolved out of trade financing. Sadly, after the
Allies defeated Germany, banking in most countries took the Anglo-American
path. The stock market has remained a game for insiders rife with fraud.
Banking has focused on real estate mortgages and takeover loans for properties
and companies already in place.
The path toward more reckless
lending was led by the “monetarist” Chicago School. This seems ironic at first
sight, because they follow the Austrians in drawing a picture of the economy as
if it operates on barter. Prices are considered only a “veil,” and so money
also is only a set of “counters,” not a financial system of credit and debt.
Instead of relating credit to the dynamics of debt, they focused narrowly on
the correlation between the money supply (variously measured) and commodity
prices — but not asset prices! Yet most money is spent in the capital markets
by “investing ” in real estate, stocks and bonds, not paid for goods and
services. Heavily endowed by the financial sector, monetarism’s “learned
ignorance” — or as Thorstein Veblen expressed it, an educated incapacity to
understand economic problems — has become mainstream and gained control of the
major refereed journals, where they have imposed a tunnel vision where the role
of debt is concerned. The analysis of debt along these lines helps explain why
economies polarize as creditors in the top 1% of the economic pyramid receive
debt service as financial tribute from the bottom 99%. It also explains why the
solutions being proposed by policy makers to keep the debt overhead (and hence,
payments to the financial sector) on the books are so dysfunctional. And the
fact that today’s academic curriculum excludes this line of analysis helps
explain why so many observers announce their surprise when economies buckle
under the debt overhead.
Hyman Minsky explained how
the business cycle is basically a financial cycle, characterized by
increasingly risky bank credit. Lending standards are loosened as debt service
grows so large that borrowers no longer are able to amortize their loans, and
ultimately not even to pay the interest. At this point (which Minsky called the
Ponzi phase of the credit cycle) banks postpone default by lending their
customers the money to pay whatever amounts are falling due. The effect is to
add the interest onto the debt principal. The process continues until banks or
their regulators realize that the loan balances are largely fictitious,
exceeding the debtors’ ability to pay. Unfortunately, socialists who stand on
the sidelines repeating the rhetoric of class war between industry and labor (a
conflict that never has disappeared, to be sure) miss the threat to labor and
industry posed by banks joining with rentiers from the real estate and
insurance sectors and monopolies. This makes criticism of financial
malstructuring neither left nor right wing. It spans the political spectrum,
because the entire economy is threatened by the austerity that results from
financial dynamics operating unchecked — and ultimately bankrupts the banking
sector itself.
Now, comeback to clean slate
policy and inclusive economic institution. As a writer, I have a questions that
are always going around inside of my mind, will our people today remember
nothing of this lesson? Will our people today do nothing to fight against the
parasite role of financial sector? Will our people today let the host’s brain
is fabricated by the interest of parasite? The answer is yours!
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