When the Millennium Development Goals reached their formal conclusion in 2015, there was a full review of the goals and whether or not they were achieved. Goal 1.A was one of the success stories. Not only did the world halve the number of people living on less $1.25 a day, it did so five years ahead of the deadline. That’s great of course, but it doesn’t mean the end of poverty.
If I was living on £1 a day, and my circumstances improved ever so slightly and I got an extra 10p a day, I wouldn’t consider my problems solved. I’d have a few things to say to anyone suggesting I had been ‘lifted out of poverty’.
There are still 800 million people living on less than $1.25 a day, which is appalling. But that’s an extremely low and mostly arbitrary line. Move the benchmark to a more realistic measure of poverty, and it gets worse – at $2.5o a day we’re talking about 2.7 billion people. Add a dollar more and we’re approaching half the world’s population.
In other words, half the world still lives in extreme poverty. That’s easy to forget if we just focus on the absolute poorest. We have a long way to go.
Here’s a graph from the book Reducing Global Poverty that shows the poverty headcount at several different levels, and projects the change in the decades to come. In the year 2040, half of the world is likely to be taking home less than $10 a day.
Of course, we want everyone to enjoy a healthy and fulfilling life, to reach their full potential and get an honest day’s wages. But when you consider how many people there are to raise up to anything like the Western standard of living, the environmental challenge should be obvious. Delivering that level of wealth to one billion people has brought side effects such as climate change and the 6th global extinction event. It can’t be universalized.
And that begs a question: are we content with a two tier world, or are we prepared to lower our own ecological impact to make room for others?
ERADICATE EXTREME POVERTY & HUNGER
Halve, between 1990 and 2015, the proportion of people whose income is less than $1.25 a day
The target of reducing extreme poverty rates by half was met five years ahead of the 2015 deadline.
More than 1 billion people have been lifted out of extreme poverty since 1990.
In 1990, nearly half of the population in the developing regions lived on less than $1.25 a day. This rate dropped to 14 per cent in 2015.
At the global level more than 800 million people are still living in extreme poverty.
Achieve full and productive employment and decent work for all, including women and young people
Globally, 300 million workers lived below the $1.25 a day poverty line in 2015.
The global employment-to-population ratio – the proportion of the working-age population that is employed – has fallen from 62 per cent in 1991 to 60 per cent in 2015, with an especially significant downturn during the global economic crisis of 2008/2009.
Only four in ten young women and men aged 15-24 are employed in 2015, compared with five in ten in 1991.
Halve, between 1990 and 2015, the proportion of people who suffer from hunger
The proportion of undernourished people in the developing regions has fallen by almost half since 1990.
Globally, about 795 million people are estimated to be undernourished.
More than 90 million children under age five are still undernourished and underweight.
India’s PM Narendra Modi has embarked on a ‘demonetisation’ policy, which saw around 85 percent of India’s bank notes becoming invalid overnight.
Emerging evidence indicates that demonetisation was not done to curb corruption, ‘black money’ or terrorism, the reasons originally given. That was a smokescreen. Modi was acting on behalf of powerful Wall Street financial interests. Demonetisation hascaused massive hardship, inconvenience and chaos. It has affected everyone and has impacted the poor and those who reside in rural areas (i.e. most of the population) significantly.
Who does Modi (along with other strategically placed figures) serve primarily: ordinary people and the ‘national interest’ or the interests of the US?
We don’t have to dig too deep to see where Modi feels at home. Describing itself as a major ‘global communications, stakeholder engagement and business strategy’ company, APCO Worldwide is a lobby agency with firm links to (part of) the Wall Street/US establishment and functions to serve its global agenda. Modi turned to APCO to help transform his image and turn him into electable pro-corporate PM material. It also helped Modi get the message out that what he achieved in Gujarat as Chief Minister was a miracle of economic neoliberalism, although the actual reality is really quite different.
In APCO’s India brochure, there is the claim that India’s resilience in weathering the global downturn and financial crisis has made governments, policy-makers, economists, corporate houses and fund managers believe that the country can play a significant role in the recovery of the global economy. APCO’s publicity blurb about itself claims that it stands “tall as the giant of the lobbying industry.”
The firm, in its own words, offers “professional and rare expertise” to governments, politicians and corporations, and is always ready to help clients to sail through troubled waters in the complex world of both international and domestic affairs.
Mark Halton, former head of Global Marketing and Communications for Monsanto, seemed to agree when he praised APCO for helping the GMO giant to:
… understand how Monsanto could better engage with societal stakeholders surrounding our business and how best to communicate the social value our company brings to the table.
If your name isseverely tarnishedand you need to get your dubious products on the market in countries that you haven’t managed to infiltrate just yet, why not bring in the “giant of the lobbying industry.”
As a former client of APCO, Modi now seems to be the go-to man for Washington. His government is doing the bidding of global biotech companies and is trying to push through herbicide-tolerant GM mustard based on fraudulent tests and ‘regulatory delinquency‘, which will not only open the door to further GM crops but will possibly eventually boost the sales of Monsanto-Bayer’s glufinosate herbicide. In addition, plans have been announced to introduce 100% foreign direct investment in certain sectors of the economy, including food processing.
This opening up of India to foreign capital is supported by rhetoric about increasing agricultural efficiency, creating jobs and boosting GDP growth. Such rhetoric mirrors that of the pro-business, neoliberal dogma we see in APCO’s brochure for India. From Greece to Spain and from the US to the UK, we are able to see this rhetoric for what it really is: record profits and massive increases in wealth (ie ‘growth) for elite interests and, for the rest, disempowerment, surveillance, austerity, job losses, the erosion of rights, weak unions, cuts to public services, bankrupt governments and opaque, corrupt trade deals.
APCO describes India as a trillion-dollar market. Note that the emphasis is not on redistributing the country’s wealth among its citizens but on exploiting markets. While hundreds of millions live in poverty and hundreds of millions of others hover above it, the combined wealth of India’s richest 296 individuals is $478 billion, some 22% of India’s GDP. According to the ‘World Wealth Report 2015’, there were 198,000 ‘high net worth’ individuals in India in 2014, while in 2013 the figure stood at 156,000.
APCO likes to talk about positioning international funds and facilitating corporations’ ability to exploit markets, sell products and secure profit. In other words, colonising key sectors, regions and nations to serve the needs of US-dominated international capital.
Paving the way for plunder
Modi recently stated that India is now one of the most business friendly countries in the world. The code for this being lowering labour, environmental, health and consumer protection standards, while reducing taxes and tariffs and facilitating the acquisition of public assets via privatisation and instituting policy frameworks that work to the advantage of foreign (US/Western) corporations.
When the World Bank rates countries on their level of ‘Ease of Doing Business’, it means nation states facilitating policies that force working people to take part in a race to the bottom based on free market fundamentalism. The more ‘compliant’ national governments make their populations and regulations, the more attractive foreign capital is tempted to invest.
The World Bank’s ‘Enabling the Business of Agriculture’ – supported by the Bill and Melinda Gates Foundation and USAID – entails opening up markets to Western agribusiness and their fertilisers, pesticides, weedicides and patented seeds.
Anyone who is aware of the Knowledge Initiative on Agriculture and the links with the Indo-US Nuclear Treaty will know who will be aware that those two projects form part of an overall plan to subjugate Indian agriculture to the needs of foreign corporations (see this article from 1999). As the biggest recipient of loans from the World Bank in the history of that institution, India is proving to be very compliant.
The destruction of livelihoods under the guise of ‘job creation’
According to the neoliberal ideologues, foreign investment is good for jobs and good for business. Just how many actually get created is another matter. What is overlooked, however, are the jobs that were lost in the first place to ‘open up’ sectors to foreign capital. For example, Cargill may set up a food or seed processing plant that employs a few hundred people, but what about the agricultural jobs that were deliberately eradicated in the first place or the village-level processors who were cynically put out of business so Cargill could gain a financially lucrative foothold?
The Indian economy is being opened-up through the concurrent displacement of a pre-existing (highly) productive system for the benefit of foreign corporations.For farmers, the majority are not to be empowered but displaced from the land. Farming is being made financially non-viable for small farmers, seeds are to be privatised as intellectual property rights are redefined, land is to be acquired and an industrialised, foreign corporate-controlled food production, processing and retail system is to be implemented.
The long-term plan is tocontinue to starve agricultureof investment and have an urbanised India with a fraction of the population left in farming working on contracts for large suppliers and Wal-Mart-type supermarkets that offer highly processed, denutrified, genetically altered food contaminated with chemicals and grown in increasingly degraded soils according to an unsustainable model of agriculture that is less climate/drought resistant, less diverse and unable to achieve food security. This would be disastrous for farmers, public health and local livelihoods.
Low input, sustainable models of food production and notions of independence and local or regional self-reliance do not provide opportunities to global agribusiness or international funds to exploit markets, sell their products and cash in on APCO’s vision of a trillion-dollar corporate hijack; moreover, they have little in common with Bill Gates/USAID’s vision for an Africa dominated by global agribusiness.
And, finally, to demonetisation
Modi rode to power on a nationalist platform and talks about various ‘nation-building’ initiatives, not least the ‘make in India’ campaign. But he is not the only key figure in the story of India’s capitulation to Washington’s agenda for India. There is, for instance,Avrind Subramanian, the chief economic advisor to the government, and Raghuram Rajan who was until recently Governor of the Reserve Bank of India.He was chief economist at the International Monetary Fund from 2003 to 2007 and was a Distinguished Service Professor of Finance at the University of Chicago Booth School of Business from 1991 to 2013. He is now back at the University of Chicago.
Aside from Rajan acting as a mouthpiece for Washington’s strategy to recast agriculture in a corporate image and get people out of agriculture in India, in arecent article, economist Norbert Haring implicates Rajan in the demonestisation policy. He indicates that the policy was carried out on behalf of USAID, MasterCard, Visa and the people behind eBay and Citi, among others, with support from the Gates Foundation and the Ford Foundation.
Haring calls Rajan the Reserve Bank of India’s “IMF-Chicago boy” and based on his employment record, memberships (not least of the elite Group of Thirty which includes heads of central, investment and commercial banksand links, place him squarely at the centre of Washington’s financial cabal.
Haring says that Raghuram Rajan has good reason to expect to climb further to the highest rungs in international finance and thus play bow to Washington’s game plan:
He already was a President of the American Finance Association and inaugural recipient of its Fisher-Black-Prize in financial research. He won the handsomely endowed prizes of Infosys for economic research and of Deutsche Bank for financial economics as well as the Financial Times/Goldman Sachs Prize for best economics book. He was declared Indian of the year by NASSCOM and Central Banker of the year by Euromoney and by The Banker. He is considered a possible successor of Christine Lagard at the helm of the IMF, but can certainly also expect to be considered for other top jobs in international finance.”
The move towards a cashless society would secure a further degree of control over India by the institutions who are pushing for it. Securing payments that accrue from each digital transaction would of course be very financially lucrative for them. These institutions are therefore pursuing a global ‘war on cash’.
Small, wealthy countries like Denmark and Sweden can bear the impact of a transition to a cashless economy, but for a country such as India, which runs on cash, the outcomes so far have been catastrophic for hundreds of millions of people, especially those who don’t have a bank account (almost half the population) or do not even have easy access to a bank.
But, regardless of the large-scale human suffering imposed as a result of demonetisation, it could kill two birds with one stone: 1) securing the interests of international capital, including the eventual displacement of the informal (i.e. self-organised) economy; and 2) acting as another deliberate nail in the coffin of Indian farmers, driving even more of them out of the sector. The US’s game plan remains well and truly on course.
Not really a case of ‘make in India’. Some 50 years after independence, as a state India remains compromised, weak and hobbled. More a case of made in Washington.
Cannot fully accept these reasons for demonetization. I think its just because BJP dont want other parties take advantage of vote for money system in the state elections. All the major elections BJP won. because other parties dont have black money to buy votes. But BJP got lot of new money using the administration. Lot of unaccounted new currency was caught from BJP leaders all over india.
First came Martin Shkreli, the brash young pharmaceutical entrepreneur who raised the price for an AIDS treatment by 5,000 percent. Then, Heather Bresch, the CEO of Mylan, who oversaw the price hike for its signature Epi-Pen to more than $600 for a twin-pack, though its active ingredient costs pennies by comparison.
Now a small Virginia company called Kaleo is joining their ranks. It makes an injector device that is suddenly in demand because of the nation’s epidemic use of opioids, a class of drugs that includes heavy painkillers and heroin.
Called Evzio, it is used to deliver naloxone, a life-saving antidote to overdoses of opioids. More than 33,000 people are believed to have died from such overdoses in 2015. And as demand for Kaleo’s product has grown, the privately held firm has raised its twin-pack price to $4,500, from $690 in 2014.
Founded by twin brothers Eric and Evan Edwards, 36, the company first sought to develop an Epi-Pen competitor, thanks to their own food allergies.
Now, they’ve taken that model and marketed it for a major public health crisis. It’s another auto-injector that delivers an inexpensive medicine.
One difference, though, is that Evzio talks users through the process as they inject naloxone. The company says the talking device is worth the price because it can guide anyone to jab an overdose victim correctly, leave the needle in for the right amount of time and potentially save his or her life.
According to Food and Drug Administration estimates, the Kaleo product, which won federal approval in 2014, accounted for nearly 20 percent of the naloxone dispensed through retail outlets between 2015 and 2016, and for nearly half of all naloxone products prescribed to patients between ages 40 and 64 — the group that comprises the bulk of naloxone users.
And the cost of generic, injectable naloxone — which has been on the market since 1971 — has been climbing. A 10-mililiter vial sold by one of the dominant vendors costs close to $150, more than double its price from even a few years ago, and far beyond the production costs of the naloxone chemical, researchers say. The other common injectable, which comes in a smaller but more potent dose, costs closer to $40, still about double its 2009 cost.
Still, experts say the device’s price surge is way out of step with production costs, and a needless drain on health-care resources.
“There’s absolutely nothing that warrants them charging what they’re charging,” said Leo Beletsky, an associate professor of law and health sciences at Northeastern University in Boston.
Kaleo, which is trying to blunt the pricing backlash and turn Evzio into the trusted brand, is dispensing its device for free — to cities, first responders and drug treatment programs. Such donations were also essential to the Epi-Pen’s business strategy.
The device has been invaluable to patients, said Eliza Wheeler of San Francisco’s Harm Reduction Coalition, a nonprofit that works to combat overdoses and has received donations of Evzio. But at $4,500 a package?
“I might have $10,000 to spend on naloxone for a year, to supply a whole city,” Wheeler said. “If I have 10 grand to spend, I certainly can’t buy two Evzios.”
Mark Herzog, Kaleo’s vice president of corporate affairs, said in an email that most earlier naloxone devices were “developed, designed and intended” for use in medically-supervised settings.
Prior kits contained a pre-filled syringe. The Evzio was the first to help laypeople dispense the drug. And competition is limited: One of the few consumer-friendly alternatives to Evzio is a nasal spray device for naloxone.
A growing market
The opioid crisis has led more experts to call for expanded access to naloxone — for people navigating addiction and for those around them. The idea is that if someone nearby could overdose, dispensing the drug should be as easy as pulling the fire alarm.
Federal and state governments have spent millions of dollars equipping police officers and other first responders with naloxone. In communities particularly hard-hit by drug overdoses, places such as schools, libraries and coffee shops are keeping the antidote on hand. Physicians are prescribing it to patients who are taking prescription painkillers in an effort to make sure they — and their families and friends — are prepared.
The Evzio could be ideal, especially when medical professionals are not nearby, noted Traci Green, an associate professor at Boston University’s School of Medicine. But the price limits access.
“It’s a really good product,” she said. “It’s elegant. People do like it — but they can’t afford it.”
“There’s a lot of value to this formulation,” said Ravi Gupta, a medical student and lead author of a December op-ed on the pricing issue, published in the New England Journal of Medicine. “But it’s not justified. This pricing is not justified.”
But consumers may not yet be pinched. In another Mylan parallel, Kaleo offers coupons to patients with private insurance, so they don’t have any co-pay when they pick up the device.
So Kaleo would say the price hikes are essentially moot. Herzog said they are necessary to subsidize programs that do not offer copayments. In a follow-up email, he added that the list price is “not a true gauge,” because insurance companies can sometimes negotiate rebates and discounts. And, he said, since the price increase, more patients have gotten Evzio prescriptions filled — so the cost doesn’t seem to be stopping them.
Mylan provides a similar Epi-Pen discount — a move that’s helped cement it as the dominant epinephrine provider. But even if consumers don’t directly pay for the price increases, they’re affected, analysts cautioned.
“When you have these kinds of programs, the cost is still borne by patients, because insurance premiums go up,” Beletsky said.
That, analysts say, undermines Kaleo’s argument that they’re somehow increasing access. After all, while some government agencies and private organizations get the drug for free or at a deep discount, that isn’t true across the board. For those who don’t get that deal, the list price matters.
Take Vermont. The state’s been particularly hard-hit by the epidemic — more than 70 people died of opioid overdose in 2015, and it’s been dubbed America’s “heroin capital.”
Its health department is trying to get naloxone into the hands of people using opioids, setting up distribution sites around the state. But because of its high cost, Evzio isn’t an option, said Chris Bell, who runs the state health department’s emergency preparedness and injury prevention division. So it is opting for the nasal spray that costs a fraction of the price.
That’s not true everywhere, though. The Veterans Health Administration, known for its especially high rate of patients taking opioid-based prescription painkillers, covers the auto-injector. It can do so, though, because of its bargaining power — the agency is legally authorized to negotiate with pharmaceutical companies.
As a result, the VA is paying “far, far less” than the Evzio list price, said Joseph Canzolino, deputy chief consultant for pharmaceutical benefits management at the VA. (He would not release the precise figure.)
The agency’s buying power is such, he added, that even when companies drive up prices, what the VA pays will stay more or less stable — far below a figure he called “pretty exorbitant.”
Thanks to an infusion of public funding to combat opioid overdoses, other institutional buyers may also be able to afford Evzios. Their budgets are larger right now, so they’re less price sensitive, said Nicholson Price, an assistant professor at the University of Michigan Law School.
But that money comes from somewhere — most likely taxpayers. And it’s hardly sustainable, Price noted, saying “at some point in time the rubber’s got to hit the road.”
Kaleo has given away more than 180,000 devices, Herzog said, distributed in 34 states among about 250 organizations such as police departments and nonprofit groups that distribute naloxone to people at risk of overdose.
Advocates and pharmacy groups have made videos touting the product. In neighborhoods where overdose is common, businesses — like fast-food restaurants, grocery stores and other retail establishments — are interested in keeping readily dispensable naloxone on hand.
But those who’ve accepted free Evzio devices and have come to rely on it may soon face withdrawal. Last year, Kaleo’s donation supply was exhausted by July. Herzog said the company has added to its donation supply and is taking applications from groups hoping for free devices.
Barring a meaningful expansion, the free device program could run out of supplies even sooner if the current opioid crisis keeps up.
The problem, law professor Price noted, is that policymakers haven’t found a solution to get people needed medication and keep pricing in line with value.
“Epi-Pen happened, and everyone was like, ‘Wow, this is terrible, we shouldn’t allow this to happen,’” he said. “And we haven’t done anything about that, and it’s not clear what the solution is. Now, shocker, it’s happening again.”
Irony isn’t a concept with which President Donald J. Trump is familiar. In his Inaugural Address, having nominated the wealthiest cabinet in American history, he proclaimed, “For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost. Washington flourished — but the people did not share in its wealth.” Under Trump, an even smaller group will flourish — in particular, a cadre of former Goldman Sachs executives. To put the matter bluntly, two of them (along with the Federal Reserve) are likely to control our economy and financial system in the years to come.
Infusing Washington with Goldman alums isn’t exactly an original idea. Three of the last four presidents, including The Donald, have handed the wheel of the U.S. economy to ex-Goldmanites. But in true Trumpian style, after attacking Hillary Clinton for her Goldman ties, he wasn’t satisfied to do just that. He had to do it bigger and better. Unlike Bill Clinton and George W. Bush, just a sole Goldman figure lording it over economic policy wasn’t enough for him. Only two would do.
The Great Vampire Squid Revisited
Whether you voted for or against Donald Trump, whether you’re gearing up for the revolution or waiting for his next tweet to drop, rest assured that, in the years to come, the ideology that matters most won’t be that of the “forgotten” Americans of his Inaugural Address. It will be that of Goldman Sachs and it will dominate the domestic economy and, by extension, the global one.
At the dawn of the twentieth century, when President Teddy Roosevelt governed the country on a platform of trust busting aimed at reducing corporate power, even he could not bring himself to bust up the banks. That was a mistake born of his collaboration with the financier J.P. Morgan to mitigate the effects of the Bank Panic of 1907. Roosevelt feared that if he didn’t enlist the influence of the country’s major banker, the crisis would be even longer and more disastrous. It’s an error he might not have made had he foreseen the effect that one particular investment bank would have on America’s economy and political system.
There have been hundreds of articles written about the “world’s most powerful investment bank,” or as journalist Matt Taibbi famously called it back in 2010, the “great vampire squid.” That squid is now about to wrap its tentacles around our world in a way previously not imagined by Bill Clinton or George W. Bush.
No less than six Trump administration appointments already hail from that single banking outfit. Of those, two will impact your life strikingly: former Goldman partner and soon-to-be Treasury Secretary Steven Mnuchin and incoming top economic adviser and National Economic Council Chair Gary Cohn, former president and “number two” at Goldman. (The Council he will head has been responsible for “policy-making for domestic and international economic issues.”)
Now, let’s take a step into history to get the full Monty on why this matters more than you might imagine. In New York, circa 1932, then-Governor Franklin Delano Roosevelt announced his bid for the presidency. At the time, our nation was in the throes of the Great Depression. Goldman Sachs had, in fact, been one of the banks at the core of the infamous crash of 1929 that crippled the financial system and nearly destroyed the economy. It was then run by a dynamic figure, Sidney Weinberg, dubbed “the Politician” by Roosevelt because of his smooth tongue and “Mr. Wall Street” by the New York Times because of his range of connections there. Weinberg quickly grasped that, to have a chance of redeeming his firm’s reputation from the ashes of public opinion, he would need to aim high indeed. So he made himself indispensable to Roosevelt’s campaign for the presidency, soon embedding himself on the Democratic National Campaign Executive Committee.
After victory, he was not forgotten. FDR named him to the Business Advisory Council of the Department of Commerce, even as he continued to run Goldman Sachs. He would, in fact, go on to serve as an advisor to five more presidents, while Goldman would be transformed from a boutique banking operation into a global leviathan with a direct phone line to whichever president held office and a permanent seat at the table in political and financial Washington.
Now, let’s jump forward to the 1990s when Robert Rubin, co-chairman of Goldman Sachs, took a page from Weinberg’s playbook. He recognized the potential in a young, charismatic governor from Arkansas with a favorable attitude toward banks. Since Bill Clinton was far less well known than FDR had been, Rubin didn’t actually cozy up to him from the get-go. It was another Goldman Sachs executive, Ken Brody, who introduced them, but Rubin would eventually help Clinton gain Wall Street cred and the kind of funding that would make his successful 1992 run for the presidency possible. Those were favors that the new president wouldn’t forget. As a reward, and because he felt comfortable with Rubin’s economic philosophy, Clinton created a special post just for him: first chair of the new National Economic Council.
It was then only a matter of time until he was elevated to Treasury Secretary. In that position, he would accomplish something Ronald Reagan — the first president to appoint a Treasury Secretary directly from Wall Street (former CEO of Merrill Lynch Donald Regan) — and George H.W. Bush failed to do. He would get the Glass-Steagall Act of 1933 repealed by hustling President Clinton into backing such a move. FDR had signed the act in order to separate investment banks from commercial banks, ensuring that risky and speculative banking practices would not be funded with the deposits of hard-working Americans. The act did what it was intended to do. It inoculated the nation against the previously reckless behavior of its biggest banks.
Rubin, who had left government service six months earlier, wasn’t even in Washington when, on November 12, 1999, Clinton signed the Gramm-Leach-Bliley Act that repealed Glass-Steagall. He had, however, become a board member of Citigroup, one of the key beneficiaries of that repeal, about two weeks earlier.
As Treasury Secretary, Rubin also helped craft the North American Free Trade Agreement (NAFTA). He subsequently convinced both President Clinton and Congress to raid U.S. taxpayer coffers to “help” Mexico when its banking system and peso crashed thanks to NAFTA. In reality, of course, he was lending a hand to American banks with exposure in Mexico. The subsequent $25 billion bailout would protect Goldman Sachs, as well as other big Wall Street banks, from losing boatloads of money. Think of it as a test run for the great bailout of 2008.
A World Made by and for Goldman Sachs
Moving on to more recent history, consider a moment when yet another Goldmanite was at the helm of the economy. From 1970 to 1973, Henry (“Hank”) Paulson had worked in various positions in the Nixon administration. In 1974, he joined Goldman Sachs, becoming its chairman and CEO in 1999. I was at Goldman at the time. (I left in 2002.) I remember the constant internal chatter about whether an investment bank like Goldman could continue to compete against the super banks that the Glass-Steagall repeal had created. The buzz was that if Goldman and similar investment banks were allowed to borrow more against their assets (“leverage themselves” in banking-speak), they wouldn’t need to use individual deposits as collateral for their riskier deals.
In 2004, Paulson helped convince the Securities and Exchange Commission (SEC) to change its regulations so that investment banks could operate as if they had the kind of collateral or backing for their trades that goliaths like Citigroup and JPMorgan Chase had. As a result, Goldman Sachs, Lehman Brothers, and Bear Stearns, to name three that would become notorious in the economic meltdown only four years later (and all ones for which I once worked) promptly leveraged themselves to the hilt. As they were doing so, George W. Bush made Paulson his third and final Treasury Secretary. In that capacity, Paulson managed to completely ignore the crisis brewing as a direct result of the repeal of Glass-Steagall, the one I predicted was coming in Other People’s Money, the book I wrote when I left Goldman.
In 2006, Paulson was questioned on his obvious conflicts of interest and responded, “Conflicts are a fact of life in many, if not most, institutions, ranging from the political arena and government to media and industry. The key is how we manage them.” At the time, I wrote, “The question isn’t how it’s a conflict of interest for Paulson to preside over our country’s economy but how it’s not?” For men like Paulson, after all, such conflicts don’t just involve their business holdings. They also involve the ideology associated with those holdings, which for him at that time came down to a deep belief in pursuing the full-scale deregulation of banking.
Paulson was, of course, Treasury Secretary for the period in which the 2008 financial crisis was brewing and then erupted. When it happened, he was the one who got to decide which banks survived and which died. Under his ministrations, Lehman Brothers died; Bear Stearns was given to JPMorgan Chase (along with plenty of government financial support); and you won’t be surprised to learn that Goldman Sachs thrived. While designing that outcome under the pressure of the moment, Paulson pled with Nancy Pelosi to press the Democrats in the House of Representatives to support a staggering $700 billion bailout. All those taxpayer dollars went with the 2008 Emergency Financial Stability Act that would save the banking system (under the auspices of saving the economy) and leave it resplendently triumphant, bonuses included), even as foreclosures rose by 21% the following year.
Once again, it was a world made by and for Goldman Sachs.
Goldman Back in the (White) House
Running for office as an outsider is one thing. Instantly inviting Wall Street into that office once you arrive is another. Now, it seems that Donald Trump is bringing us the newest chapter in the long-running White House-Goldman Sachs saga. And count on Steven Mnuchin and Gary Cohn to offer a few fresh wrinkles on that old alliance.
Cohn was one of the partners who ran the Fixed Income, Currency and Commodity (FICC) division of Goldman. It was the one that benefited the most from leverage, trading, and the complexity of Wall Street’s financial concoctions like collateralized debt obligations (CDOs) stuffed with derivatives attached to subprime mortgages. You could say, it was leverage that helped propel Cohn up the Goldman food chain.
Steven Mnuchin has proven particularly adept at understanding such concoctions. He left Goldman in 2002. In 2004, with two other ex-Goldman partners, he formed the hedge fund Dune Capital Management. In the wake of the 2008 financial crisis, Dune went shopping, as Wall Street likes to do, for cheap buys it could convert into big profits. Mnuchin and his pals found the perfect prey in a Pasadena-based bank, IndyMac, that had failed in July 2008 before the financial crisis kicked into high gear, and had been seized by the Federal Deposit Insurance Corporation (FDIC). They would pick up its assets on the cheap.
At his confirmation hearings, Mnuchin downplayed his role in throwing homeowners (including members of the military) out of their heavily mortgaged homes as a result of that purchase. He cast himself instead as a genuine hero, the guy who convened a cadre of financial sharks to help, not harm, the bank’s customers who, without their benevolence, would have fared so much worse. He looked deeply earnest as he spoke of his role as the savior of the common — or perhaps in the age of Trump “forgotten” — man and woman. Maybe he even believed it.
But the philosophy of swooping in, attacking an IndyMac-like target of opportunity and converting it into a fortune for himself (and problems for everyone else), has been a hallmark of his career. To transfer this version of over-amped 1% opportunism to the halls of political power is certainly a new definition of, in Trumpian terms, giving the government back to “the people.” Perhaps what our new president meant was “the people at Goldman Sachs.” Think of it, in any case, as the supercharging of a vulture mentality in a designer suit, the very attitude that once fueled the rise to power of Goldman Sachs.
Mnuchin repeatedly blamed the FDIC and other government agencies for not helping him help homeowners. “In the press it has been said that I ran a ‘foreclosure machine,’” he said, “On the contrary, I was committed to loan modifications intended to stop foreclosures. I ran a ‘Loan Modification Machine.’ Whenever we could do loan modifications we did them, but many times, the FDIC, FNMA, FHLMC, and bank trustees imposed strict rules governing the processing of these loans.” Nothing, that is, was or ever is his fault — reflecting his inability to take the slightest responsibility for his undeniable role in kicking people out of their homes when they could have remained. It’s undoubtedly the perfect trait for a Treasury secretary in a government of the 1% of the 1%.
Mnuchin also blamed the Federal Reserve for suggesting that the Volcker Rule — part of the Dodd-Frank Act of 2010 designed to limit risky trading activities — was harming bank liquidity and could be a problem. The way he did that was typically slick. He claimed to support the Volcker Rule, even as he underscored the Fed’s concern with it. In this way, he managed both to make himself look squeaky clean and very publicly open the door to a possible Trumpian “revision” of that rule that would be aimed at weakening its intent and once again deregulating bank trading activities.
Similarly, at those confirmation hearings he said (as Trump had previously) that we needed to help community banks compete against the bigger ones through less onerous regulations. Even though this may indeed be true, it is also guaranteed to be another bait-and-switch move likely to lead to the deregulation of the big banks, too, ultimately rendering them even bigger and more dangerous not just to those community banks but to all of us.
Indeed, any proposition to reduce the size of big banks was sidestepped. Although Mnuchin did say that four monster banks shouldn’t run the country, he didn’t say that they should be broken up. He won’t. Nor will Cohn. In response to a question from Democratic Senator Maria Cantwell, he added, “No, I don’t support going back to Glass-Steagall as is. What we’ve talked about with the president-elect is that perhaps we need a twenty-first-century Glass-Steagall. But, no I don’t support taking a very old law and saying we should adhere to it as is.”
So, although the reinstatement of Glass-Steagall was part of the 2016 Republican election platform, it’s likely to prove just another of Trump’s many tactics to gain votes — in this case, from Bernie Sanders supporters and libertarians who see too-big-to-fail institutions and a big-bank bailout policy as wrong and dangerous. Rest assured, though, Mnuchin and his Goldman Sachs pals will allow the largest Wall Street players to remain as virulent and parasitic as they are now, if not more so.
Goldman itself just announced that it was the world’s top merger and acquisitions adviser for the sixth consecutive year. In other words, the real deal-maker isn’t the former ruler of The Celebrity Apprentice, but Goldman Sachs. The government might change, but Goldman stays the same. And the traffic pile up of Goldman personalities in Trump’s corner made their fortunes doing deals — and not the kind that benefited the public either.
A former Goldman colleague recently asked me whether it was just possible that Mnuchin was a good person. I can’t answer that. It’s something only he knows for sure. But no matter how earnest or sympathetic to the little guy he tried to be before that Senate confirmation committee, I do know one thing: he’s also a shark. And sharks do what they’re best at and what’s best for them. They smell blood in the water and go in for the kill. Think of it as the Goldman Sachs effect. In the waters of the Trump-Goldman era, don’t doubt for a second that the blood will be our own.
The focus of my talk today will be Jesus’ first sermon and the long background behind it that helps explain what he was talking about and what he sought to bring about. I’ve been associated with Harvard University’s Peabody Museum for over thirty years in Babylonian economic archeology. And for more than twenty years I’ve headed a group out of Harvard, the International Scholars Conference on Ancient Near Eastern Economies (ISCANEE),writing a new economic history of the ancient Near East.
The five colloquia volumes that we’ve published began in 1994. We decided we have to re-write the history to free it from the modern ideological preconceptions that have distorted much popular understanding.
When I began to study Sumer and Babylonia in the 1980s, there wasn’t any economic history of the ancient Near East. There were histories of the ancient Near East, but I had to go through every volume with general history, look in the index, and sometimes I would find debt, but more often there wasn’t.
I had to go through the whole literature, and I realized that assyriologists didn’t want anything to do with economists. There was a very good reason for that. Since the 1920s there was an idea of what was called “Babylonianism”: The idea that everything came from Babylon. In practice this meant that everybody would project their own belief about how civilization began in the ancient Near East and the Neolithic.
It was like a Rorschach test. The Vatican, who had Sumerian translators, thought that it was a temple state and temples ruled everything. Socialists thought that it was all communal. The free enterprise boys – the Austrians and other liberals –just ignored the palaces and the temples, and thought that markets and individuals traded, and that was that.
From the actual people who study cuneiform records, 90% of which are economic, what we have surviving from Sumer and Babylonia, from about 2500 BC to the time of Jesus, are mainly marriage contracts, dowries, legal contracts, economic contracts, and loan contracts. Above all, loans.
We decided at Harvard to do three volumes of colloquia. The first was on privatization in the ancient Near East: how did private property emerge. The second was on land tenure. And from the very beginning the main focus was going to be on the third volume. That was on debt and economic renewal, that is, debt cancellation.
I didn’t read Babylonian or Sumerian. My degree is in Germanic philology, not in ancient languages. So I had to read all these royal proclamations of debt cancellations in translation. And that turned out to be a great benefit. Because the translations of the Sumerian and the Babylonian, in every language are completely different.
In America, it’s a tax reduction. Samuel Kramer, who wrote the most popular book on Sumer, wrote a letter in 1981 to The New York Times urging newly elected President Reagan to do what Urukagina did in Lagash in 2350 BC and lower taxes. That’s not what happened. The esteemed professor was projecting his own right-wing economic beliefs onto the ancient past.
The English thought – how English can you get – that these were free trade agreements. The Germans got much closer to the reality, and said they were debt cancellations. Finally came the French translations. They got it right: Dominique Charpin translated the Sumerian term as a restoration of order. The word for the clean slate in Sumerian was “amargi” and the root is “ma”: The “mother” of all situations.
The rulers had what we would call an economic model. They realized that every economy tended to become unstable as a result of compound interest. We have the training tablets that they trained scribal students with, around 1800 or 1900 BC. They had to calculate: How long does it take debt to double its size, at what we’d call 20% interest? The answer is 5 years. How does long it take to multiply four-fold? The answer is 10 years. How much to multiply 64 times? The answer is 30 years. Well you can imagine how fast the debts grew.
So they knew how the tendency of every society was that people would run up debts. Now when they ran up debts in Sumer and Babylonia, and even in in Judea in Jesus’ time, they didn’t borrow money from money lenders. People owed debts because they were in arrears: They couldn’t pay the fees owed to the palace. We might call them taxes, but they actually were fees for public services. And for beer, for instance. The palace would supply beer and you would run up a tab over the year, to be paid at harvest time on the threshing floor. You also would pay for the boatmen, if you needed to get your harvest delivered by boat. You would pay for draught cattle if you needed them. You’d pay for water. Cornelia Wunsch did one study and found that 75% of the debts, even in neo-Babylonian times around the 5th or 4th century BC, were arrears.
Sometimes the harvest failed. And when the harvest failed, obviously they couldn’t pay their fees and other debts. Hammurabi canceled debts four or five times during his reign. He did this because either the harvest failed or there was a war and people couldn’t pay.
What do you do if you’re a ruler and people can’t pay? One reason they would cancel debts is that most debts were owed to the palace or to the temples, which were under the control of the palace. So you’re canceling debts that are owed to yourself.
Rulers had a good reason for doing this. If they didn’t cancel the debts, then people who owed money would become bondservants to the tax collector or the wealthy creditors, or whoever they owed money to. If they were bondservants, they couldn’t serve in the army. They couldn’t provide the corvée labor duties – the kind of tax that people had to pay in the form of labor. Or they would defect. If you wanted to win a war you had to have a citizenry that had its own land, its own means of support.
Basically what you had in the Bronze Age and every ancient society was a different concept of time than you have today. You had the concept of time as circular. That meant economic renewal. The idea was that every new ruler, every new reign, began time all over again. It wasn’t really time, it was really the economy had to start from a new position of equilibrium. This equilibrium – basically freedom from debt, the ability to support yourself – had to start afresh.
Economists look at ancient Near Eastern history and think: “You couldn’t have had Clean Slates, you couldn’t have canceled the debts, because then you would have had anarchy.” The fact is that proclaiming a Clean Slate was the way to avoid anarchy. It was the way to restore people to self-sufficiency. So in Sumer and in Babylon, every major ruler would proclaim a Clean Slate. We have the records to detail this century after century.
People know Hammurabi’s Laws, that’s in all the textbooks. But those laws were never official: They are more a literary document. What actually had legal binding force – and we know this from the cuneiform court records – were the debt cancellations that Hammurabi proclaimed in the second year of his rule, and later when he went to war with Larsa, and proclaimed it on other occasions.
The word that they used was andurarum, a word that has the sense of “a river flowing.” You sort of restore the flow. It really meant that bond servants were free to go back to their families.
These Clean Slates had three elements: Number one, they would cancel the personal debts – not the business debts, not the debts denominated in silver among merchants and other rich people. These debts were business contracts, and they remained in place. It was the petty debts, the consumer debts, that were canceled. Number two, lands that had been forfeited were restored: the crop rights, if they’d been pledged to creditors. And three, all the human beings who had been pledged as bondservants would be free to return to their families.
This word andurarum reappears in the Bible as the word deror. The Hebrew word is deror, which is obviously a direct cognate. And the jubilee year that appears in Leviticus 25 is a direct translation of Babylonian practice.
There’s a question: What happened between writing the Bible, including the laws about deror, and Jesus? There are hardly any documents, there aren’t any that have come down to us. We don’t know about if there were any jubilee years in Judea.
We don’t know really what happened up until the time of Jesus, except that there was at that time the same war between creditors and debtors that there was in Rome. Every Roman historian of the time – Livy, Plutarch, Diodorus – they all blamed the fall of the Roman republic on the creditors behavior of assassinating the debtors’ leaders, the rule by violence and the takeover of the economy by creditors after centuries of debt war. We know that this was going on throughout the whole ancient world, including in the Near East.
We know that in the very first sermon that Jesus gave when he returned to Nazareth, he went out on the Sabbath to the synagogue, and unrolled the scroll to Isaiah 61 and read that Isaiah, had been sent to preach the good news to the poor. “Good news” translates literally to “Gospel.” And he said it was to proclaim freedom for the captives, and release for the prisoners, and to proclaim the year of the Lord’s favor, deror, which meant, basically, a Clean Slate.
What does this mean? There have been a lot of translations. As the time the King James Bible is translated, and at the time it was translated to other languages, people just thought the year of our Lord meant: “Obey God.” They’re not quite sure what it means. An even greater argument occurs over the Lord’s Prayer. What does it mean: Is he saying forgive us our sins, or forgive us the debts? Well, most of religion’s leaders, certainly the vested interests, say: “He’s talking about sins,” that religion and Christianity is all about sin, it’s not about debt.
Actually, the word for sin and debt is the same in almost every language. Schuld, in German, means the debt as well as the offense or the sin. It’s devoir in French. Basically you had exactly the same duality in meaning Akkadian, the Babylonian language. The reason goes back to an idea, called wergeld in parts of Europe, which is universal – we have it in Babylonia too. If you injure somebody: if you hurt him or you kill him, either you have to go into exile in the city of refuge, or the family gets to kill you, or you settle matters by paying. And the payment – the Schuld or the obligation – expiates you of the sin. So the word for the payment of the offense is the same as the offense, and you’d expect this similarity to occur in every language.
Some of the Qumran [Dead Sea] scrolls really proved that what was at issue was debt. The most important scroll is 11q melchizedek. “Q” is for the Qumran cave where they were found, cave number 11. And in this scroll collects everywhere in the Bible that talks about debt cancellation: deror.
Leviticus 25 is about the year of the jubilee: “Each of you will return to his possession.” In Deuteronomy 15: “Let every creditor release that which he’s lent to his neighbor.” In Isaiah 61: “Release the captives, release the bond servants.” In Psalm 82, the Psalms of David: “God stands in the divine assembly, he’s going to give his judgment. God will judge his people and punish the wicked.” There’s a whole collection and there’s no question that this is what is meant by the idea of debt and sin and obligation.
Well, you can imagine how upset most religions were when they found these scrolls. They said they must be by this sectarian group, the Essenes. They must be a radical group, sort of like the Trotskyists. We can just sort of ignore them. But it turns out now that biblical scholars have found that the Qumran caves seem to be the library of the Temple of Jerusalem. During the wars with Rome they moved the library to the caves of Qumran in order to keep them from being destroyed when the Temple was sacked and burned down. So these scrolls were the very core of Judaic religion.
The fight of Jesus against the Pharisees was about this. At first Jesus said: “Good to be back in Nazareth, let me read to you about Isaiah.” In Luke 4 says it that this was all very good, and they liked him. But then he began talking about debt cancellation, and they tried to push him off a cliff.
So basically you have the whole origin of Christianity was a last gasp, a last fight, to try to reimpose this idea of the economic renewal – of a Clean Slate – that goes back at least to the 3rd millennium BC and probably all the way to the Neolithic.
So you have this last attempt to try to get a Clean Slate, and we know what happened to Jesus. His followers were not able to bring it about. So by the 1st and 2nd centuries of our era, what could the Christians do? You’re never going to get the Roman Empire to announce a Clean Slate. As a matter of fact, when the kings of Sparta, at the end of the 3rd millennium BC, tried to cancel the debts, the oligarchs of Greece called in Rome. Rome went to war against Agis, Cleomenes and then Nabis and destroyed Sparta. They were going to fight against anyone who wanted to cancel the debts. Mithridates in Asia Minor in the 1st millennium fought against Rome, canceled the debts, and also killed about 30,000 Romans in the ancient Near East. It was a long bloody fight, and they all lost.
So all the Christians could do was have charity. Well, the problem with charity is that you have to be rich in order to lend to somebody. It’s like what David Graeber did with Strike Debt. You can buy the debt and pay somebody else’s debt and give money away, but that doesn’t really fix the system. The result was, it really was the end times. The choice was: either you’re going to have economic renewal and restore people’s ability to support themselves; or you’re going to have feudalism.
That basically is how the Roman historians described Rome as falling. The debtors were enslaved, not only the debtors but just about everybody was enslaved, put in barracks on the land. Finally, you needed to have a population, so you let people marry and you gave them land rights – and you had slavery develop into serfdom. Well we’re going into a similar situation today, where I think we’re going into a kind of neo-feudalism. The strain of today’s society is as much a debt strain as it was back then.
It’s very funny: If you go into Congress – I was the economic advisor to Dennis Kucinich – you go into Congress and there’s a big mural with Moses in the center and Hammurabi on his right. Well, you know what Moses did? He gave the law. Leviticus, right in the center of Mosaic law, canceled the debt. What did Hammurabi do? Debt cancellation as well. You’re not going to see Congress canceling the debts like that.
If you look at the Liberty Bell, it is inscribed with a quotation from Leviticus 25: “Proclaim liberty throughout all the land.” Well now we have translation problems again. The word really isn’t liberty: The real word means Clean Slate. It means freeing society from debt, letting everybody have their own basic housing and means of self-support. And by striking coincidence, what does the Statue of Liberty do? She’s holding aloft a flame. And in the Babylonian historical records, when Hammurabi would cancel the debts they would say: “The ruler raised the sacred torch.” So here you have a wonderful parallelism.
It’s been written out of history today, It’s not what you’re taught in Bible school, or in ancient studies, or in economic history. So you have this almost revolution that’s been occurring in Assyriology, in Biblical studies and Hebrew studies, and it’s all kept up among us specialists. It hasn’t become popular at all, because almost everything about the Bronze Age and about the origins of Christianity is abhorrent to the vested interests today.
I want to start by just saying thank you. This kind of interdisciplinary work that you are doing between ancient Near Eastern studies, economics, and Biblical studies is very rare and very important. And I am really overjoyed because that happens very rarely that somebody, especially an economist, talks about Biblical matters so insightfully, and talks about something that through the imposition of the dominant power structure on the reading of the Bible, has been totally suppressed.
We no longer know about aphesis, the core New Testament term for forgiveness, but that is indeed the term you have brought up: the term for deror, for shmita, for yobul, for all the kind of debt release, for release of people from captivity, for release of land from being given away. And that is very much present in the New Testament. We just have kind of suppressed it. It’s suppressed in the theology that most of us have learned somewhere, and not accidentally.
We pray the Lord’s Prayer: “Forgive us our debts.” But we think, “It’s not really debts, it’s sin.” If you listen to the stories from the New Testament you can see that debt and sin forgiveness are not apart. This separation only happens when Christianity was integrated into the whole system of Constantinian state theology: of an empire that lived on debt mechanisms.
I do have a question for you. You say very well that the king in the Bible is in a very peculiar position. The King is not a very positive figure in the Bible. In fact, the king is the person who messes everything up. The whole story, the big story of the Bible from Genesis to 2 Kings – basically what we call the Deuteronomistic history – is a history very much focused on debt release: On restoration of what you called the good order, the sustainable economic and also ecological order. The kings could be good for that but they are much more the ones who actually lead to the core tragedy of exile.
We see this in 2 Chronicles 36:21, where it says the Jews in the Temple are killed, everything goes up in flames, everybody is gone. And now finally the land can go back and have its Sabbath. So it seems to me that this comes very close to what you’re saying: that the Bible draws to conclusion because we went into a misguided economic system that really destroyed the people. That is the disaster that is coming. But again, the king is the one who produced it in the Bible.
And linked to that is another thing that belongs in this whole system: the Sabbath. The Sabbath year is every 7 years, and Jubilee years are every 49 years. The Sabbath is every 7 days. And the Sabbath is basically the Clean Slate day, to use your terminology. It’s a day when people are released. Not only I and my daughter and my son rest, but also my female slaves, my male slaves, and any debt-slaves. And my animals. And every seven years the Earth then, also rests. So the land rests, everybody rests, that means everybody goes back into that equilibrium of original goodness that is established in Genesis 1. So it’s a different social order that is celebrated every seven days, if we take the Sabbath seriously.
So really the movement in the New Testament, it’s not just charity. In the New Testament they have a movement that is more horizontal: that is the collection, where people support each other. And also you had the village economy in the Old Testament. So those are all sort of social movements. I would just like to know from you how you see the intervention from the bottom and how you see the movement from the ground then and its influence in these laws.
Society changed drastically from the 3rd and even the 2nd millennium to the 1st millennium, throughout the Near East. If you’re in Babylonia or Sumer and you’re a debt-servant, you’re only going to be free when a new King is inaugurated and proclaims a Clean Slate. Or you wait until there’s a war, or until there’s a crop failure.
But by the 1st millenium, kings are overthrown in Rome by the aristocracy, which didn’t want any King to have power over them. The same happened in Greece, Rome and every other part of the ancient world. At the time, if you were living in Judea or Israel, you’re going to have a king just like all the other regions. They’re not the kind of kings that are going to cancel the debts. They’re the kind of kings that are going to want to get more and more power in their hands, or their family and their cronies. So what Judaic religion did was take it out of the hands of kings and put it right in the center of Masaic law. No matter who’s the ruler, no matter what the king does – it doesn’t matter who’s the king – every 50 years you have to have a debt cancellation.
You bring up Deuteronomy, the seventh year. Unlike the case in Babylonia, where we have all of the records that they kept on cuneiform and clay records, the records in the Mediterranean lands haven’t survived. So we don’t know what happened. We just don’t know any details. We don’t know how much of this was actually applied. We do know how widely it was applied in the Near East because we have the lawsuits over it.
Regarding what you said about communities at those stages and on: Yes, absolutely, you have to band together. That’s the only way you can survive And yes, you need communalism at a point where everybody is ground down to near poverty, because if you don’t have mutual support, you’re going to succumb.
Rev. Claudia de la Cruz:
I want to thank you, Dr. Hudson for sharing. I think that there is a glimpse of hope in my mind right now in terms of how debt cancellation can be potentially one of the things that folks struggle for.
I want to share what a very important theologian in my life shared, my grandmother: She would say, in Spanish, “No one can possibly become wealthy unless they steal from someone.” And we know that those who are wealthy have stolen from the majority of the population throughout history. And so to be on this panel and be part of this conversation reminds me a lot of everything my grandmother’s taught me, so I’m grateful for that.
I could speak from my experience as a minister. I could speak from my experience as an educator and an organizer. I’m not an economist, although I appreciate your type of economic analysis.
I just recently participated in a delegation that went to Rome to meet with the Pope, who called a gathering of social movements from around the world. And I was very troubled that I would be going into the Vatican: Because as someone who’s coming from Latin America, I know what imperialism looks like and I know what capitalism looks like. And I was not happy – Willie Baptist could attest to that. I was trying to expropriate the wealth, but that’s another sermon.
As a Christian – as someone who follows Jesus the revolutionary, the historical figure – it was very troubling for me to go in there and see the amount of wealth that the Church has stolen from the people. And I say the Church with a capital ‘C,’ because there’s also church that’s made in communities that are doing that communal surviving that the Bible teaches us.
As someone who came to this institution, Union, Columbia, I want to ask: How many of you are students? God bless your hearts. Hopefully when you graduate you don’t have the same amount of debt that I do: $110,000 that I will never repay because I have no means to pay it. I was born poor, and I will die poor. And it’s not a condition that God created for me, it’s a condition a capitalist system created.
And capitalism has taken its forms throughout history. We know now we have finance capitalism, we know global capitalism, and it continues, unfortunately, like the most brutal demon, to re-invent itself. So when I hear you talk about debt cancellation, in my mind I have a question: Is that something that we can strive for?
But if we do strive for it, there’s still a king. There’s still a system in place that will continue to enslave us, every so often. So what is the proposal that comes from us, from communities, from people that are thinking about political economy?
In church we’re taught charity, and from my experience as someone who comes from a church that embraced liberation theology, we always understood that religion does not live in a vacuum. There’s a social, economic, and political system in place that always influences what religion is.
And so as folks who are, Christians, Jews, whatever our faith tradition is, if we are really on the side of the poor, those who are indebted, those who are made slaves by debt: What is our economic proposal? Because we cannot continue to build on social politics, because charity doesn’t cut it. I could have 10,000 questions, but I have that question: What is the proposal if we understand that even if we strive for debt cancellation, there’ll still be a king in place?
Dr. Michael Hudson:
Many people who oppose debt cancellation try to pooh-pooh the Babylonian and Sumerian cancellation. Samuel Kramer, the right-wing Sumerologist, said they were all failures because once they canceled the debts, they all grew back again. You have to realize that every society is going to run up debts, every society is going to run up bills, every society is going to polarize. So it has to be a permanent, ongoing revolution. You have to continually keep restoring it. Obviously, today, you’re not going to begin with a debt cancellation.
What has caused this basic shift away from debt cancellation is the privatization of credit. In Sumer and Babylonia the temples and the palace were the source of credit. In medieval Japan it also was the temples that were the creditors. Most people ran up debts, in Japan, to the temples for sake – the temples were also sake-makers. There were revolts against the sake-makers to cancel the debts, and they were successful.
The problem is the privatization of credit. The government today could cancel the student debts that are owed to the government. But they can’t cancel the debts that are owed, say, to David Rockefeller or to other banks – to somebody else.
The banks should be a public option, just like health care should be a public option. Even the University of Chicago right-wingers, in the 1930s, proposed a 100% reserve. The idea is that banks should not be able to create credit, meaning create debt. When you create credit, you’re creating somebody’s debt. That should be a government function, because the government can relieve the debts.
The bankruptcy law was re-written in 2005. It made it almost impossible to declare bankruptcy. It used to be you could declare bankruptcy and have a clean slate, on an individual basis, not a social basis, but now even that has been closed here. And for student loans you can’t have bankruptcy at all.
Obviously this has to be a big fight. Dennis Kucinich tried to fight for it and immediately the Democrats redesigned his district, gerrymandered the voting districts to get him out of Congress so that he wouldn’t talk about it anymore. So it’s obviously going to be a very hard fight.
Rev. Dr. Liz Theoharis:
After listening to Dr. Hudson, and my old advisor Dr. Kahl, and my dear friend Claudia de la Cruz, there isn’t much to add. And yet I want to talk a little bit about my favorite passage of the Bible and what this kind of analysis does to a reinterpretation of it.
It seems to me that since I was a child I have heard almost every week of my life a quote from the Bible: “The poor you will always have with you.” This is in Matthew 26, with parallels in Mark 14 and John 12. And this passage has been used to argue that poverty is inevitable, that it can never be ended, and that my work – my vision – for ending poverty, alongside that of thousands of poor and dispossessed people in this country and across the world, is futile.
I have known since I was little, in the heart of my hearts, that the inevitability of poverty argument is incorrect. But it took me many many years as a scholar and as an activist to understand just why and how it is incorrect, which is why I’m so excited about this discussion.
The Bible, a text replete with calls for economic justice and denunciations of the scourge of indifference to the poor, has been mis-used and cynically politicized to suggest that poverty is the result of the moral failures of poor people sinning against God. And I say sinning on purpose here. It has been used to say that ending poverty is impossible and that the poor themselves have no role to play in efforts to respond to their poverty.
All these arguments are predicated on the idea that the cancellation of debts never happened and is completely impossible. And so to me what is so vitally important about the conversation we’re having today is that what I would call the biggest Biblical roadblock to the defining issue of our day – which is poverty, inequality, and the dispossession of the many for the wealth of the few – is upheld by this lack of historical and Biblical analysis.
I want to say a little bit about why this matters, and why particularly talking about debt cancellation really revolutionizes our understanding of the Bible.
I do not believe that we will be able to end poverty until we actually bring things like the cancellation of debts – a reality over thousands of years of history – into the public discussion of what has happened and therefore can happen again.
The quotation echoes Deuteronomy 15:4-11, which is one of the most liberating sabbath year or Jubilee-connected prescriptions of the Bible. The Jewish Publication Service says that Matthew 26 is quoting Deuteronomy 15:4, but the NRSV says that Matthew 26 is quoting Deuteronomy 15:11. And why does this matter?
Deuteronomy 15:4 says: “You will have no needy person among you if you follow the commandments that I am giving to you today.” And then proceeds to explain what those commandments are. The forgiveness of debts is first. The release of slaves is connected. And the lending of money, even though you know you’ll never get paid back, is third.
And what does Deuteronomy 15:11 say? First it says: “But you all are a greedy people that will be disobedient to me,” and then: “The poor will never cease to be in the land, so open your hand to the poor and needy neighbor.”
So what Christians have done with “the poor will be with your always,” even when they recognize that it’s a quote of Deuteronomy 15, is to make it a quote about charity. It’s about: “Okay we can’t do anything about it.”
And this is not just conservatives, this is not just reactionaries. This is liberal Christians who say: “We can’t end poverty, Jesus says so. Even when he quotes the Hebrew scriptures, they’re reminding us that we can’t end poverty, we can’t cancel debts, we can’t release slaves, but what we can do is give a little bit of the extra to folks.” Which should sound very familiar to us. This sounds like the solutions that we have on offer for addressing poverty and inequality and dispossession.
But what’s so important and groundbreaking about the work that Dr. Hudson is doing is to see that you can’t actually read Matthew 26 and Deuteronomy 15:4 and 11 separately. So to me, what’s really helpful, even though there’s a whole history of debating whether this really happened, is the fact that these very radical economic verses are in our scriptures and are regularly referenced, including in this most famous passage about poverty. Jim Wallace says that this is the most famous passage, other people say that this is the most famous passage too, and it somehow trumps all the passages that talk about the release of slaves, the coming here to proclaim a year of God’s favor.
What I think is really important then about this work around debt cancellation in relationship to this really important passage, is to look both at Deuteronomy and the ancient Near East economies that existed beforehand, as well as to look at the Roman Empire and the ancient economy that Jesus was responding to.
To look at Deuteronomy you have to look at terms like sin, which we were just talking about. Where sin is talked about in Deuteronomy, is that it will be considered a sin against God if your brother or sister has to call out against you because you’re robbing their wages or because you’re not releasing their debts or because you’re making them slaves. So this common notion, that people are poor because they’re sinners and not right with God, and that the rich are blessed by God, just does not hold. It does not work.
And what’s also, to me, very important – and I learned this from the work that Dr. Hudson and Dr. Kahl and others have done – is that you can’t separate the economy from piety. So sin is an economic term and it’s a pietistic term. And so the way that you honor God is by how you care for yourself and your neighbor. And there’s no way of separating those two things.
There’s no way to be right with God if your neighbor is being oppressed. There’s no way for you to do what God requires of you if debts exist in your society. And to me this is one of the things that has been really separated, including from any interpretations of the poor. We somehow preach that Jesus was here to preach good news, but then somehow we separate that from what is the content of that good news: and that is release of slaves, remission of debts, and the year of the Jubilee.
So to me it changes, radically, this idea that poverty is inevitable, and instead puts the onus on human beings and followers of the scriptures that if poverty exists it’s because you are failing the commandments of God. And it also says that if you continue to do what you’re doing, which is charity and economic repression, then you will always have poverty with you. But don’t put that on God, put that on you and put that on your society and how it’s organized.
And I want to pose the question: How do we bring this into the public consciousness? How do we popularize the very important work that Dr. Hudson and others are doing, to say that debt cancellation is possible, debt cancellation has happened before, and that it’s healthy for our economy to cancel debts.
Walter Brueggemann says that Deuteronomy 15 is one of the most radical parts of the Bible without people really knowing. Because what it says is that forgiving debts, releasing slaves, and lending out money knowing you’ll never get paid back, is what God says is how you will have community prosperity. And so when you say that to communities these days, the ways people have been told that you’re going to have community prosperity is if you save, if you take from somebody else, if you store up your treasure on earth. These kinds of concepts from Deuteronomy 15 are totally foreign, I would say.
And so to me what’s so important about this work – and then I pose this question of how do we get this out there – says that this is not just an academic question, this isn’t just a theological and Biblical interpretation question, this is a question about life and death in our society today. And if we don’t actually start to see that you’re being disobedient to God and to the scriptures by letting debt play the role that it plays in killing people, then we’re screwed. So I would love to hear a little bit more about what has worked in terms of getting some of this out, and how we all can help with that.
Dr. Michael Hudson:
Well you’re right, that’s the problem: How do you popularize it all? What do you do today? The first thing is I think you have to frame it in the big picture.
The way you get to people is to say: We’re at a turning point in history. If we don’t solve the problem of economic polarization, which is caused mainly by debt, we’re going to go into another dark age. We’re going to have neo-feudalism. We’re going to have neo-serfdom, except that you’re not going to be tied to the land like serfs were. You can live wherever you want, but wherever you are, you’re going to have to pay about 40% of your income just for housing. And you’re going to have to pay for water, and you’re going to have to pay for the other needs. This is the new kind of serfdom. You have to re-frame what the economy is about in a way that people can understand.
And you need a multi-pronged approach to fight on four or five fronts. You need academics so that nobody can say you don’t know what you’re talking about. You need an organ, a periodical; you need books; you need to make use of the Internet; you need films; and you need a political group. You need to institutionalize this idea and give it a critical mass of coherence, and I think that’s what you folks are doing.