Thursday, September 01, 2011

Debt and Debt Peonage: Sumerian Style

More from David Graeber: Debt, The First 5000 Years.

Debt was invented in ancient Mesopotania, and ditto consumer debt.  A persistent problem with consumer debt was that one bad harvest could ruin a huge fraction of the farmers, with bankers seizing their homes, farms, families, and persons.  Farm and village was abandoned as endangered farmers fled, often to become bandits.

Kings countered this vast social disruption with occasional consumer debt cancellations.  Eventually, it became common for a new king to do this kind of debt forgiveness at his ascension to the throne.  I expect that loans got harder to get when the King got old.

This is the kind of drastic medicine that neither Europe nor the US has the stomach for - but might be preferable to the kind of slow death by bankruptcy that we see before us.