Bloody Shovel 3

We will drown and nobody shall save us


A few weeks ago I had a short exchange with Nick Land on Twitter on the issue of debt.

Debt is a huge issue, a big part of what's wrong with the fabric of modernity, a big factor of what's driving modern civilization into collapse. And yet it has remained largely underdiscussed in these circles. Moldbug, who to the end still remained something of a libertarian, did have a keen interest in finance, and after the great crisis of 2008 made a series of long posts on financial crises and how to design a properly sound banking system. His "favorite topic" he even called it. Well it's certainly not my favorite topic, nor I'm sure it's Mr. Land's, but it's nonetheless a fascinating issue, and more importantly, a critical one.

Again, my approach to all intellectual issues is to think about its history, and the one thing that strikes one when thinking about debt is how easy-going the ancients were about them. Sovereign bankruptcies were routine, and nothing really happened. But most importantly, debt jubilees were *very* common. Mr. Land here seems to think it's a horrible idea, and he may be right, but I can't be faulted for liking something that Chinese emperors did every few years as part of general amnesties. New emperor? Cancel the people's debt. Emperor has a change of mood and sets a new regnal era? Cancel the debt. Cute imperial baby is born? Out with the debt. Some Emperors had general amnesties almost every year. It's interesting to note that the Song Dynasty, famous for its fabulous wealth, commercial mindset and urban culture, and thus a polity which you would expect to have more care about enforcing contracts, had over 200 debt jubilees over its 318 year history. That's one every eighteen months.

Again, you could say that the one thing that ensured the Great Divergence, the Rise of the West, the Industrial Revolutions and basically everything that's nice and productive about the modern world (and there's plenty of that, I do like fast transport, air conditioning and modern hygiene, thank you very much), was the establishment of the Sanctity of Contracts as an important part of Western culture. There's certainly something to that. A non-negligible part of reactionary authors will spit on Libertarianism a dozen times a day, but they will stay give you a 2 hour speech in praise of the Joint Stock Corporation as the fundamental basis of the modern economy and Western Civilization as we know it. By that line of reasoning, the only reason we ever got away of the Malthusian trap was when we stopped forgiving damn debtors and we used state authority to enforce commercial contracts.

And yet, reactionaries since Moldbug have also been very concerned with the problem of sovereignty. Most precisely, the lack of it. We bemoan the lack of ability of the holders of political power in the West to take hard measures that could fix many of the social problems which afflict us. But, you know, that's not surprising given that we don't allow our political authorities to mess with "the sanctity of contracts". If routine commercial transactions are held to be above the supreme power of the land, how the hell do we expect them to get anything done at all?

Why did the kings and emperors of yore issue decree debt jubilees so often? Why at all? Not just to get debt out of their own shoulders, obviously, they had the power to do that and just that, and do not relieve the commoners from their own debt obligations. And yet they did that, all the time: have commoners be free of paying back their debts. Again this sounds outrageous to our modern sensibilities, and yet it was routinely done for millennia, and everybody thought it perfectly natural. Part of that is because anything the Sovereign did was perfectly natural. The whole point of being king is that you get to do things like issue debt jubilees and screw the merchants royally. Pun intended. There's such a thing as different sorts of power, and economic power, the power that arises from having massive amounts of wealth, is very real. And yet, all that power is good for nothing in front of the King's authority, who on a whim can wipe out all your claims of debt collection. The merchants cry, and the indebted peasants rejoice. That's just good politics for the king: gains him popular favor, and signals his power.

But was that all? Just the King, sticking it to the merchants because he can? The whole frequency of the measure seems to hint there's something more going on. Maybe debt jubilees were an actual tool of governance. A good tool, a necessary tool, in order to achieve some positive outcome. Surely in terms of political stability, the most immediate concern of kings. And maybe something more. Maybe debt relief just actually fixes something in society, corrects some imbalances which lead to not just more safety for the king, but actually a better society, in terms of economics, natality and just general happiness and prosperity.

If you have read Peter Turchin's book War and Peace and War, and if you haven't you should stop right here and just go read it right now (if you have time for my blog you really should be going and read that book), you might recall Chapter 10, which Turchin titled "The Matthew Principle". That's a rather forced coinage from a quote of the evangelist. The idea is basically that the rich always get richer and the poor always get poorer. That's a historical reality and there's plenty of evidence for it in premodern times, those very times I'm referring to as having frequent amnesties and debt jubilees, canceling everybody's debt and starting over, screwing with creditors every few years.

Now, when talking at this level of abstraction it's always important to take a pause and think carefully of the definitions we are using. Think of the proposition "the rich always get richer". Who exactly is "the rich" here? Are we talking of individuals? Do rich men, on average, grow their fortune over time until their death? I'm not sure that's true, but even if it were, analysis of a single lifetime are hardly interesting. What about families? Are rich families, again on average, richer over generations? That seems intuitively to be true, and Gregory Clark has written an interesting book arguing that case, The Son also Rises. The difference between families and individuals is that families to some extent get to choose their members, so rich family names persist by accepting rich heiresses and the like, and gently expelling underperforming sons, helping maintain or grow the family "honor".

What about the rich as a class? That was the focus of Turchin's argument. What he meant is that absent political action to counter it (i.e. violence), economic inequality always grows. And grows. And grows. It happens that it always ends, or at least has ended to this point in history, with some eruption of violence, either a popular revolt, a civil war, or some kind of crackdown by the government against the wealthy. But if you were somehow able to avoid violence from ever happening, inequality just would continue to grow, slowly but steadily, by its implacable mathematical logic, until we got a Gini coefficient of 1. That's just a law of nature. Pure, abstract math, in practical terms. Just the way humans work. The rich just keep getting richer, and the poor keep getting poorer, and there's nothing you can do about it except using organized violence (i.e. politics) to stop the process. Those processes of growing inequality and eventual freak-out tend to last about a 100 years, so Turchin calls them "secular cycles".

Turchin, who may be right or wrong but is nonetheless a great writer, describes his argument with a very easy example. In any competition, he notes, the poor are at a disadvantage against the rich, having fewer resources, and so overtime tend to lose ground. Think of land, the almost only source of wealth in civilized societies until very recently. Assume an initially completely equal distribution of land. And that's, by the way, not an absurdity. There's actually a very good example in China's Tang Dynasty, which adopted an "equal-field" system. All land was owned by the state, which allotted equal sized fields to individual peasant families.

What happened afterwards? Concentration. Little by little, some peasants were thriftier, others more prone to spend. Some were luckier, some more unfortunate with weather, or disease, or family issues. Some peasants started mortgaging away their fields to other peasants who again, due to thrift or luck had money available to spend. Those latter peasants then ended up with more land. Rince and repeat the process for several decades, and you get some very rich guys and a lot of landless vagrants. Keep the process going for even longer and you'd get even more inequality.

As Turchin himself says it:

“The mathematical model I developed, however, tells us that this mechanism by itself will not produce a vast gulf between the rich and the poor. When land becomes a scarce commodity, however, another process begins to operate. Human beings need to consume a certain amount of goods to survive. Most basically, they have to get enough food. Those who do not have enough land to feed themselves will have to start selling what they have to make up the difference. As a result, they become poorer. By contrast, those who have more land than they need to feed themselves will have a surplus income that they can use to acquire even more land. Thus, the rich get richer. The positive feedback of the Matthew principle arises as a result of threshold of the minimum consumption level. The Matthew principle ensures that all people whose land holdings are below the threshold—the poor—gradually lose their remaining property, which ends up in the hands of the rich. Finally, the population is divided into a tiny minority of wealthy landowners and a huge majority of landless proletarians.”

But that seldom happened, as eventually some ambitious man always found a way of organizing those landless vagrants into a rebel army and started a big fat war. Chinese dynasties tended to all last exactly 250 years, with a big rebellion in the middle. Two secular cycles. And the Chinese historians always agree in the culprit. 土地兼并, land concentration. Every single time. Europe had less obvious closure but also plenty of wars to stir things up. And eventually, of course, the Age of Revolutions.

Things are of course different now in our incredibly diversified economies; even landless peasants or the equivalent today can work their way up some corporate ladder or find some new economic niche and start a successful business. But the fact that poor people, on average, are at a disadvantage in resource competition against the rich. The rich just have less to lose. As Half Sigma, unsuccessful candid Jew always says, talk of "risk-taking entrepreneurs" is just bullshit. Rich people have enough money stashed away to live comfortably all their lives. They are investing their spare wealth, and yes, there's always a risk there. But big deal. They're covered.

Again, I'm following Turchin and talking like evolution ends at the neck. Which it doesn't. People are genetically different, not only in intelligence but appearance (a very important part of individual capital), and a myriad personality traits which affect one's ability to gain wealth. Those successful genes, "moxie" as Greg Cochran calls them, also get sent up to wealthier families as successful people choose to marry into them, depleting the lower classes of the most fundamental resource, the very physical basis of economic success, especially in a culture like ours, without marriage taboos or formally separate social classes.

Modern debt has perhaps little to do with the debt of a peasant mortgaging his small plot of land to pay for his father's funeral. While commoners today have plenty of student or consumer debt, most debt is hold by corporations or public entities, in a complete madness of intertwined obligations going on for trillions and trillions. But it's not unreasonable to see corporations as the perhaps foremost subjects of the modern state, and not humans, who are but appendixes to corporations in the eyes of many bureaucratic agencies. Debt in the modern economy might not be as obvious as the poor medieval peasant of Turchin's tale, but the deleterious social effects, and the existence of a class of advantaged people using their position to increase their wealth against the debt of the masses is still very similar, and fits Turchin's equations.

Back to the beginning of the post, you can now see what debt jubilees were meant to achieve. Interestingly, Turchin's book doesn't mention the word "jubilee" even once. He probably didn't think them important, as economic inequality historically did grow anyway. But surely periodic legal debt relief made the process slower. Eased societal contradictions to a more manageable level for the court. But it was never enough, it was barely a stopgap to the inexorable trend. But at least it served to lower the gas boiling the frog.

I just realized that I started this post with the intention of arguing in favor of debt relief, of learning from the ancients how to pacify society. But given the limited power it historically had, and given the trends we are seeing now, the complete obliteration of Western Civilization down the road to becoming Brazil, then South Africa and ultimately Haiti, maybe the proper accelerationist position is to make the fire stronger and make the damned frog jump from the pot once and for all. No jubilee. No peace. Let's just observe the coming of the age of the oligarchs, and hope it breaks down fast.

If it does, though.


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  • I rather wish I'd said so at the time, but to Land's assertion that a jubilee is contrary to contractual solemnity, a response would be 'ok, but that's the field the merchants knew they had to operate under.' You've simply changed the rules of the game. Now, if you're a merchant who knows that he's lent at extorionate rates, or if you're considering expending the resources to create a land monopoly you know the king may want to eventually break up for the common weal, what does that change about your behavior from a game theoretic perspective? As long as the sovereign doesn't lose his mind canceling every debt, my guess is you start doing more socially-responsible, long-term-thinking-type moves (and more responsible lending) rather than giving up on trade or wealth accumulation altogether. You know the ax can come any time if you and your compatriots overplay your hand, so your choice is to be responsible to the poor (charity, self-imposed and self-serving sharing of wealth) or to 'overthrow' the system/sovereign. Of course, incentives often favor the latter.

    • >You know the ax can come any time if you and your compatriots overplay your hand The tragedy of the commons makes your line of reasoning entirely invalid. You cannot coordinate with your compatriots not overplaying their hands, for the usual reasons humans cannot coordinate, Moloch, Gnon, same way we cannot not have people blowing stock exchange bubbles, and the winner will be that dude who absolutely overplayed his hand, had put an immense number of cattle on the commons to graze, and then got out of the game precisely at the right time.

      • How do you see him 'getting out'? Unless he can literally leave town with his accumulated wealth (he's not leaving with any land, that's for sure), he's still beholden to the sovereign, who, if this guy looks as if he's getting out of hand, can appropriate his wealth before he blows up anyway.

        • Sovereigns of large countries rarely had that micro-level knowledge. How does the ruler in London know who are the greediest usurers in Newcastle?

          • There's a trap waiting here, and it's the Lew Rockwell / Moldbug small states trap. Just because Italian and Prussian unification involved things we don't like doesn't mean that tiny micro-states are inherently better, and certainly not on the grounds that the sovereign can micro-manage everything on a daily basis, turning into a kind of glorified accountant. We already have leaders like that! No, the answer, as always, is arbitrary rule: it needs to be widely known that if you do things you expect might trigger the sovereign, very bad things are apt to follow. Rather than 'regulatory compliance officers and auditable paper trails', think how the prohibition on murder works (or used to work, and sometimes works in nice places) instead: there's no protector ensuring nobody gets murdered - at least not most of the time; instead there's the understanding that if you kill someone else, your own life is pretty much going to be over too. The King needs to be that kind of deterrent: certain things (such as payday lenders) are just so unthinkable that nobody ever takes the idea of trying them seriously. Quite frankly there's no limit to what can be achieved this way. It was just understood that you'd use the tierce de Picardie if you were indulging in the darker modes. It was just understood that blue and green should never be seen; and so on. The size of the state has nothing to do with it: bigger state (eg. Russia), bigger militia, but the proportion, the militia members per capita, stays roughly the same. If the Czar is kept busy executing people every day, he'll know something wrong's afoot. In fact from the perspective of societal health, larger states are better in that regard because the sovereign gets worried about how often he's being triggered - much sooner! (For the anti-monarchist contingent, yes indeed direct democracy can achieve the same result, given certain conditions. There'll always need to be a cultural vanguard though, and a single person granted legitimacy by the eternal presence of Mother Church worked pretty well for a very long time so it remains one of the good options on the table. As always, quite how we get there from here isn't touched on here for now.)

            • Many banks of Europe, from Italy to the North, loaned to the Pope and kings, and they were as friendly with the Protestants as with the Catholics. The florin (currency) speaks. The debts are still worth something, mostly for connected bankers with human networks, but kings -- several running out of currency -- had default on their debts to foreign bankers, as well as their own.

          • The ruler in London doesn't need to; he delegates power to the person in charge of Newcastle. The sovereign's job is to make sure he puts a person into power in Newcastle who will curb the excesses of usury there. If the local governor becomes corrupted, then it is the duty of the citizens to petition the monarch for redress of grievances, to replace him. It's all about getting people with the right personalities for administration into administration. This becomes difficult as civilization becomes more and more hedonistic, as hedonism corrodes the personalities of individuals, leaving a smaller pool of people with a proper administrative mindset.

    • The result would obviously be shorter payback periods and higher interest. Loan conditions would be much worse. I guess you could call this "responsible lending", but the main consequence for normal people would simply be that getting a loan is much more expensive (unless a jubilee happens to occur right after the loan is made).

      • Would it obviously be so? If I make the payback periods shorter and the interest higher, the sovereign has a greater incentive to drop in quickly with his 'ax' and nullify loans. What I think I'd want to do is insure that I was making the sorts of loans that never made the reaper he only comes when he feels he needs to level the playing field. But he needn't 'level' if we're making sure the populace is more or less happy and a 'richer' merchant doesn't mean 'exorbitantly richer.'

        • Yes it is obvious. The entire point of lending at interest is to make money. Assume that the real interest rate given modern default rates is 5% -- so that I can lend $1000 for a year and expect to earn $50 for the use of that money. That $50 is partly profit, and partly insurance against default. Say that $25 builds in insurance for the chance of default in our modern conditions (that is, via bankrupcy), that is, that chance is 2.5%. Now we add another method of "default", namely the jubilee, which happens 1 year in 10 on average. That's a 10% chance per year, quintupling the risk of default. That means our loan can't happen at 5% and make money. It can only happen and earn the same $25 profit if the interest rate is 15%. If we take the average time of a jubilee to be 18 months, that is a 67% chance per year. So we'd have to charge interest of ~70%. Needless to say, not a lot of borrowers are willing to pay 70% interest to borrow money.

          • Yes, but again, I'm not suggesting that jubilees happen every 18 months...I'm asking 'how do we behave knowing that conditions X, Y, and Z can trigger a jubilee but that those conditions not being met will cause the average time of a jubilee to approach infinity?'

              • Hello, friend. I'm not envisaging arbitrary rule; I'm imagining a fairly well-defined ruleset governing ways in which a jubilee might be triggered. As you are a Carlyle man, I'll be keeping up with your blog. Best.

        • If lenders could coordinate, they might take into account their own influence on the sovereign's decision. But unless there are very, very few lenders in the country, they are very unlikely to coordinate at all (see: normal markets). While each lender's influence on whether a jubilee happens or not is small, they have to shoulder the burden whatever influence they choose to have. So it's more profitable to not try to influence it either way (as this is costly), and instead freeload on the ones that do. And so noone will take actions to avoid a jubilee, and loan interest will skyrocket. (They might skyrocket even if all lenders coordinated to avoid jubilees; high interest rates are a great way to avoid making many unsustainable loans.)

  • This is something I have wondered about in a different context before. Going through Jim's posts over the years I've had it hammered into my head that anyone who seeks to denounce the rich and claims to help the "little guy" is usually a communist, a trotskyite, or some other associated lefty that in actuality will end up making things much worse. However, as you noted, wealth inequality IS a fundamentally unstable situation for a society to be in once it reaches a certain point. I suppose one could label the Gracci Brothers or Wang Mang trotskyites, but it seems to me that this is a more complex issue than simply labeling any criticism of the wealthy as communist. I'm kind of rambling I guess, the process of wealth inequality feels similar to other "cyclical theories of history" like Ibn Battuta's theory of Assabiyah, so I dont know if there's really any point in attempting to come up with solutions for it when the pattern is innate to human nature.

    • Communists exist for a reason, or as I see it, there's a reason why evil people take to communism in order to get power, i.e. they have a point. Inequality over a certain point breaks large-scale cooperation.

      • The solution is lower downward mobility combined with eugenics. The wealthy have many children, the poor have few to no children. The lousy children of the wealthy become the new poor.

          • Fixed UBI (and NOT welfare and food stamps that increase linearly per child...). Something like 1/3 of white and 2/3 of black births are paid for by Medicaid. End this immediately. Amortize it, comes out of your UBI $100/month until repaid. Obviously free and well advertised abortion, birth control etc. Honestly the rate of IUDs is vastly too low. They're near 100% effective, take real effort to go and have removed, etc. Perfect for a few year period during which people shouldn't be having babies. Offer a cash incentive for getting one, ie increase your welfare payment a bit for doing this. Easy game. Births go down 10-20% but they're births that are heavily heavily heavily subsidized by the state (medical, food, etc.) and then on average a net tax drain as adults.

          • The funny thing is it's not that hard to LOWER the fertility rate. Simple cash incentives to not have children, birth control that's reliable (honestly the pill and condoms both have a consciousness and future-discounting involved that is very prohibitive for the poor), and it's done. As far as increasing high IQ fertility most evidence shows it can't be done. But what if all these moms got a payment based on the IQ of the father. Pick an intelligent father or use a donor, and add 10-20 IQ points to the child versus using the random 80-90 iq thug. 10-20 IQ is a massive difference in that kid's likelihood to be a net taxpayer, stay out of jail, off welfare etc. Some would say that's out there, but who ever thought it was a good idea to pay women MORE the poorer, dumber, and less planned their pregnancy and more than they'd get staying childless....

            • And a bit more: pay men to have a vasectomy. Just means-test it. If you have a college degree or decent income, no dice. Dropped out of high school, and willing to spare us the chances of your child getting 10-20k in education and food stamps and Medicaid, then 50% chance of a lifetime of drawing 20k in govt handouts...great saves us 10k/yr in perpetuity, so we can afford to pay you a couple thousand dollars upfront and money each year for verifying you're shooting blanks. Same for drawing any welfare, medicaid, prison time, etc. Worth paying thousands to avoid you sparking any pregnancies. Right there with welfare reform, paying poor women to get IUDs, and poor men to get vasectomies, we'd cut the lowest class of births by a third, and make child bearing suddenly a high status thing again, which might just help the educated birth rate...

            • Now for those immigrants and their babies.... Very simple. No welfare. None. No medicaid. Nothing. In fact your children can't even register for school, instead we're very willing to pay for your ticket and two years wages back in your country. Your coming here and working for nothing is not a net benefit after factoring in all the transfer payments you're drawing plus giving us low IQ offspring to support in perpetuity. Employers may be getting a good deal but the country gets a super shitty one, so we stop. Citizens get payments, no one else does. But we're very generous in paying for repatriation and a bonus to give you money to live in your own country. For citizens: if you are not educated, are on medicaid or welfare, etc. we will gladly pay you $10-20k to leave. Go to Africa, go to Mexico, go to South America, go wherever. Go to a place where you have a higher standard of living, higher status, and are more matched to the country. Plus you get cash, even better. We save hundereds of thousands of dollars and you get money that will go much further in a more suitable country.

              • (A lot could be accomplished if the government had the balls to say: we're shoveling you money. So we damn well have a right to suggest some ways to improve your quality of life and earn a bit more. Fully voluntary.) Watch for an immediate nonbrain-drain and eugenic fertility.

          • Now for those criminals (8 percent of Americans are convicted felons...hey, that's just about as many as have graduate degrees...) Early release. All expenses paid trip to one of 54 African Republic and select high-crime Latin American destinations that will agree to receive you in exchange for cold hard cash. With prison costing $100/day we can afford for you to live quite well over there and a solid bribe to your new country. Further cash bonus for renouncing your citizenship equal to a couple years earnings in the average country participating... It really is this easy. Not cheap but way cheaper than prison, welfare and medicaid, or the myriad of payments we're making already. Rehabilitation is a joke. And genetics are real. Might as well go about culling the population like some sort of reverse Singapore. The differential in cost of living is so great everyone wins...

          • You can't make that happen with an untrustworthy elite and in the US elite, trust is ultra low Even an outright theocracy like Iran can't make people have babies or want to participate. Opiate abuse is a huge problem there and the TFR is lower than the US White TFR Anyway is anyone sure that they want to lower fertility? If you do this you hand society to the Amish There doesn't seem to be much of a lower bound to fertility the Western low is 0.7 in East Germany which is 1/3 replacement and the Eastern 0.4 in parts of China The solution is economic anyway, it takes roughly 20 years and change to get a child to adulthood and if your productive class doesn't have stable jobs and can't lay down roots, they won't have children And note they will not sacrifice for it as rightly they see this just being abused by the elite. Its not unlike the climate change issue. If climate change is so important, why aren't the advocates refusing air travel and moving into a yurt They clearly aren't so therefore is obviously some combination of scam and social signalling What I wrote at the Z blog is this An appreciation for ones people and culture and a stable way to live (in modern cities ) is what brings the babies not one religion or another Problem there is our corporate leaders want us rootless amoral strivers like them Hell I’ve seen them write freak out articles when people stop moving around chasing jobs because they need family nearby to get by saying we should subsidize people moving . Culture comes from being rooted , babies come from culture and without roots, culture dies Since rootless capitalism is ending fertility, its going to have to go and be replaced with a market economy that serves nations and people Doing this will not be easy, the current people in charge considered ending all life in the Western hemisphere better than changing economic paradigms but they are getting weaker Go populist, go rooted, save the West Obviously repatriation is the start but where do we go from there ? Nothing else will work and unless people have stable work and community, society will fail

  • Anyone who hasn't dwelt with Zippy's Usury FAQ should do so ASAP: That man spent a lot of time doing some very clear thinking on the subject of debt, how it works and how we abuse it, starting from the viewpoint of an asset owner and occasional venture capitalist. Be aware you're unlikely to get responses from the host, as he has gone on to his reward.

    • Never really understood it. Basically he is saying lending $100 at 5% for a year for someone who wants to buy a lawn mower is usurious if the borrower has to give a personal guarantee to repay the loan, with all his wealth, while not usurious if the loan is only against the lawn mower and only that can be repossessed. But if you buy a lawn mower for $100 and someone rents it from you for a year and you charge an $5 rental fee for that (BTW these tend to be far higher than the going rate of interest), and if it cannot be returned because it was broken or stolen by a third party, of course expect compensation, a personal guarantee. Would that be usury? Not. So this is why it gets weird. Mortgage is not usury as long as only the house can be repoed and the borrower does not owe anything more. But of course in a rental property the landlord has a right to demand compensation if the property is damaged by the intent or carelessness of the tenant. And that is not usury. So of course the mortgager should not be happy with repoeing a house that was used for heavy partying every weekend and no maintenance done for 20 years. So let's assume that is okay to demand compensation for that. So it seems to be, the only practical difference between personally guaranteed loans and loans given for and guaranteed by a specific thing is that the market price of of that thing can change. No other value reduction is really valid. Of course it is not okay to buy a car on a loan, wreck it in an accident and then just return the wreck shrugging. So it seems that usury is fake wealth only in the sense that a $100K house can five years later worth only $40K because the market crashed. If it is a loan against the house, the books of the lender show $40K. If it is a loan to the person, the books of the lender show $100K. And that is fake wealth. A car is even more interesting, because it depreciates, about 15% a year. A loan against a car, if the lender is correct at bookkeeping, does the same, taking into consideration the current repo value. A loan against the person owning the car does not depreciate. So yeah maybe it really does cause financial bubbles and a suchlike. But I didn't really get that from Zippy's line of reasoning, had to run it through my own, accounting-oriented one.

      • Wait! It gets even more confusing! So you lend someone $50K to buy a brand new car and you know that by the end of the first year its resale, repo value is $40K. 1. Charge interest and demand $50K: usury. 2. Charge interest and demand $40K or basically just the car back: NOT usury. 3. NOT charge interest and demand $50K: NOT usury. Wat? I guess the idea is that nobody will do the third option as a business. Only charity. And thus of course no one ever lends against a brand new car for charity, charity means lending against a basic old beater that gets the job done.

        • Consumer loans would be rare in an anti-usury system because lenders would only want to be lending for productive assets. If someone has to borrow to consume, you can bet they're a bad credit. You wouldn't lend $100 for your neighbor to buy a lawnmower so he can mow his own lawn, but you might lend $100 to your neighbor's 12-yo son so he can start a lawn mowing business.

          • It used to be that car loans didn't exceed 2-5 years. As the Feds have increased CAFE & "safety" standards, and producers have continued to offer moar to consumers to get market share, the cost of vehicles relative to wages has skyrocketed (a similar thing happened in housing). Perhaps a workable fix for our lifetimes would be to hard-limit auto loan terms to 5 years, and mortgages to 20. A land tax with a high minimum threshold as the only tax is the ultimate solution IMO (see my other comment on this), but I doubt it could be archived before I croak.

      • The very basic, which you seem to have grasped, is that in order for a loan to be just it either a) must only demand back the amount of the loan, or b) terminate its guarantee in some separable asset. Clearly the first is no way to make money. The second could, and indeed does, happen all the time, though usually not for consumer loans. (The obvious exception is pawn shops.) However, the way loans are usually structured these days is based upon the personal guarantee of the borrower, which is nothing less than debt-slavery. This is where your first paragraph goes wrong, because a personal guarantee is not a claim against 'all his wealth' but against him. Thus, debtors' prisons, crushing repayment schemes, etc. This is immoral, but more to the present purpose what it does is generate funny accounting. Personal guarantees are counted as if they were money, but they are not. A bank enslaves a man and then enters that enslavement on its books as if it were the agreed-upon repayment amount. But that money isn't really there, and there is no real ironclad guarantee of repayment, because people can depreciate just like any other asset. So usury is a way of not properly accounting for risk, and therefore causes all kinds of serious hidden problems in any financial system built upon it. Which ours is. To take your examples with the lawn-mower: 1) Yes, that's usury. Expecting to get the 'the value' of the lawn-mower back regardless of use and circumstance and taking it out of the renter's income is exactly usury. Instead what you should expect to get back is the lawnmower, in whatever condition it's in. (Obviously we mean here normal wear and tear and acts of God, not fraud or negligence.) 2) Again, provable fraud is different. As for partying every night or neglecting maintenance, I'd advise against offering such people a mortgage. And if an arson sets the house on fire, the home-owner shouldn't be in trouble with the bank. All investments carry risks, and perhaps the bank (and the homeowner!) should take out fire insurance. 3) Yes, it would be OK to buy a car on loan, wreck it in an accident, and then surrender it to the loaner, walking away scot-free. Emphasis on accident, of course, because fraud is never OK. The person giving out loans to buy cars should probably secure his loan in a different asset as well.

  • Wouldn't those jubilees just cause lenders to charge higher interest rates, thus resulting in poor having fewer opportunities and increasing the inequality?

    • The poor didn't take loans to start businesses. They took loans to cover for unexpected expenses. Then they lost their property over time.

      • A loan to make an investment and a loan to cover for unexpected expenses are completely different things. Jubilees work for the second, not for the first. And in the modern western world, people don't take loans to cover for unexpected expenses. They have private insurances, state insurances, personal bankruptcy laws and social services to cover their asses. Jubilees are obsolete finance technology.

        • "people don't take loans to cover for unexpected expenses." In the USA at least, they most certainly do, and quite frequently. They're referred to as "payday loans" or "cash advances" and are targeted at those who can't meet expenses before the next paycheck, typically at 36%-40% APR.

      • In that case, the anticipation of a possible jubilee would cause the rich to be less likely to lend money, hurting the poor, who need the money to survive, the most.

  • Would hyperinflation effect a debt jubilee, or would wealthy creditors pass a law that all old debts must be repaid in the new currency?

    • It usually worked to that effect, yes. In post-WW2 Japan the aristocracy was killed in one stroke with hyperinflation, in a move engineered by the bureaucrats and the US occupation.

    • When FDR revalued gold, the govt voided gold clauses in public and private contracts. Cases went to the Supreme Court.

  • "But that seldom happened, as eventually some ambitious man always found a way of organizing those landless vagrants into a rebel army and started a big fat war. Chinese dynasties tended to all last exactly 250 years, with a big rebellion in the middle. Two secular cycles. And the Chinese historians always agree in the culprit. 土地兼并, land concentration. Every single time. Europe had less obvious closure but also plenty of wars to stir things up. And eventually, of course, the Age of Revolutions." Now you're talking my language, brother. All internal taxes should be eliminated except for land tax (structures are improvements and are not taxed). Land tax should be applied progressively, with a high minimum threshold (say $500k), and becomes punitive at high levels (say 90% @ >$20M). All land must be held by a natural living person (no trusts or corporations to evade taxes). This eliminates rent-seekers by limiting the control of the only truly scarce resource. Here's just one example of why this needs to happen: Half of England is owned by less than 1% of its population''' Import tariffs are OK and likely desirable, except on commodities. they should be minimal. Finished goods, tariff as you wish.

    • Taxes are effectively a punishment. I don't really get why land ownership should be seen as a public bad that deserves punishment. My idea would be taxing luxury, conspicious consumption, as that is a waste of resources and the best part is that they don't even mind: demand for Veblen goods does not decrease with price, i.e. if a $500 necktie is a good signal of wealth then an $500 necktie $300 VAT is an even better signal of wealth and nobody gets pissed off nor incentivized to cheat.

      • Because you need food and a place to live, and you can't grow crops or build a house on jewelry & Lambos. You can only do that on land.

  • Good post. When William the Conqueror came to England the first thing he did was create debt by making taxes payable only in gold and silver. Previously, they were payable in the increase of the land... just like the Biblical tithe. The Catholics have a lot to pay for. Officially they were against usury, but the Church itself kept the Jews around to do the usury for them.

    • The Church itself didn't keep them; it was usually the royal courts who protected them, with the Church shitting on them periodically.

  • First, will reply to Mike. Jim is an old christian retard & his entire spiel about women being views as angels instead of Violent has to do with the virgin birth. He could fix it by converting to a religion with a Goddess of War but won't. As far as Debt: A Brahmin once told me that essentially, Warriors (Ksytrias) are the highest. It is worse to kill an Emperor than a Brahmin The Brahmin guides/advises the Ksytria The Ksytria controls the merchants/usurers to help out the poor. Those who claim to help the poor end up making things worse in the interim because only the King can help the poor.

  • I just disagree that you can compare "debt jubilees" in societies without strong credit markets or a real merchant class to "debt jubilees" today. First, in ancient societies -- let's take ancient middle east, where the biblical example of a "jubilee" comes from. Most debts were social and informal -- the ones you owed to your local community. These were never cancelled. These were the mutual obligations that all communities form. Your neighbor helps you repair a roof and you owe them to help repair their roof. These debts were not cancelled by jubilees and were the dominant form of credit. What was cancelled were the debts you owed to the local temple, a pseudo governmental organization anyway. You might have borrowed some grain and needed to pay it back after harvest. So it makes sense that the government, which ran the temple, as an act of graciousness would offer a jubilee. Now, let's fast forward to the present. The informal of debts you owe to your community have been formalized. They are now traded in credit markets and make up people's retirement accounts just as investing in your local community helped assure you of being cared for in the past. There are still some debts owed to the government -- say IRS debt or student loan debt. The equivalent of a "debt jubilee" at the founding of a new government would be to free those debts. But the debts you owe for buying your house are the modern version of the debt you owed your community who helped you build your house, and obligated you to build theirs. Cancellation of these types of debts would be socially disruptive now just as they would have been disruptive in the past. They would throw pensions into risk. Whereas the cancellation of a debt owed to a temple did not throw the temple's pension into risk. The government lives forever and isn't going to move to Florida and retire. Then there is the issue of scale. There was just very little lending back then -- the amount of lending was so small that cancellation of debts was akin to throwing an expensive party. Even a moderately strong government could afford that. Today, we have so much credit that it would throw the entire economy into upheaval. Today, money _is_ credit, so the equivalent ancient act would be to cancel the entire currency, declare it worthless, and offer to introduce a new currency. How often did that happen in the past? And how often did the government voluntarily do it rather than being forced into it in time of massive social collapse?

  • Spandrell, you are not asking the important question. Who would bother to lend money under the Song dynasty? It looks like an incredibly risky thing to do. One would only do it very short term and with high interests. There are safer way to invest excess money. Or not invest. Just sit on it. Money does not spoil. Food does spoil. This may explain part of it. The Catholic-Aristotelean discussions on why usury is bad were mostly not about direct money lending, but more selling goods on credit. Mostly food, to survive the winter. And food does spoil. So here is my hypothesis. If there were rules that Song peasants had to produce as much as they can and merchants must buy all, merchants had little choice but to sell some of it on credit and hope there won't be a jubilee, because otherwise the food would have spoilt. So they had to take that risk.

      • I was wondering that myself....... I'm curious to know what steps lenders would take to hedge against the risk of jubilee. I'm sure the interest rates could be wonky. On that topic, do you know how the Song financiers computed loans/use rates? Curious what their conceptualization of finance was like vis-à-vis ours.

    • How about debt becomes an incredibly rare thing? There are alternatives: you could request that a shop lay something away for you, perhaps with fixed fees. Or you could keep things in the family for generations and/or club together as a group then worry about the time-share aspect afterwards and/or sell on within the family. All of these are healthy. Layaway mitigates time preference, while the rest solidifies a sense of permanence and belonging while strengthening the family. Historically it's an unusual and perverted way of looking at the world to assume everything requires mountains of debt, yet to us westerners it's completely natural and its absence strikes us as weird.

      • If debt becomes an incredibly rare thing, why would the Emperor declare jubilees every 18 months? Don't you think rulers generally don't do that until debt becomes a significant problem?

  • What kind of "debt" did these Chinese jubilees forgive? Only debts generated by loans? Or also unpaid paid bills for goods or services received? Unpaid taxes? Unpaid wages? "Debt" in the modern world is any money owed, regardless of why. If someone gives a loan, both parties want the debt to be created. That's different from other situations where immediate payment was expected.

  • Genetically pacified races like east asians and europeans have probably had too many of their violence genes eugenicized. Take the Chinese in asean. Increased brutality of violence triggers their risk aversion. A shrinking population decreases the chances of success. As the situation decays, the chances of fighting back decrease. The premise for accelerationist collapse is that the violence is eventually going to get "so bad" that the productive elements of the economy are going to not be able to continue or choose to fight back. But they're already having their daughters raped, self castrating, etc. The worst possible outcome has already arrived. People continue to pay into the system after their children are beheaded. I am skeptical that a debased currency is going to accelerate some sort of collapse, rebellion, etc. narrative. I think only a sovereign government can do anything about this. Maybe it's time to start begging the mainland Chinese for help.

  • And if the purpose would be to reduce inequality and stop the Matthew Principle, then (although I find this whole topic distasteful) then taxes are obviously better than random debt jubilees and pretty sure sovereigns understood that. Random debt jubilees inject unpredictability into the system. Just do it once, and no lender will know anymore if he will be paid back or not. This should logically mean interests go up with risk. Not good for the poor. Remember the core Hoppean truth: civilization implies low time-preferences, investing into the future, which requires not only IQ but a predictable future. Just like nobody plants a farm if any random bandit can burn it, same with lending. A tax whose rate never changes because the sovereign vows on his mother's feet that it will never change is predictable, hence does not harm future-orientedness and thus civilization so much. And there is also the matter of what kind of tax. Georgian taxes have some good arguments behind them. My favorites are sumptuary taxes on luxury consumption. The rich buy expensive things mostly just because they are expensive, to show off their wealth. Already Veblen noticed th demand for these goods does not drop with the price increasing. So just tax these, the rich won't even be offended too much as these goods becoming even more expensive work even better as as a wealth signal, and it can be used for financing the state. Or if one really wants to, reduce inequality. Compared to something like this a debt jubilee is crude and barbaric. As it scares lenders and makes lending scarce and expensive. Or it can lead to private, mafia-style debt enforcement.

    • I responded to you above, but I disagree with your characterization of debt jubilees as 'random.' It seems to me that it would be well know what sort of conditions would lead to a jubilee and that the jubilee could be a 'release valve' of sorts for too much accumulated land or usury or what-have-you. The merchant class would be aware of the things likely to bring the scythe, and would react appropriately (note, I'm not saying how things DID play out, just playing devil's advocate about how such a system might very well work).

      • This requires the merchant class to coordinate with each other. Any individual merchant has very little incentive to care what happens to the class as a whole because of the actions of the class as a whole; he's better off hoping everyone else does the "right thing". You might get similar results either way, since merchants certainly would make less loans. But it would be to avoid losses when the next jubilee happens; not to try to avoid the enactment of a jubilee.

  • Definitely a worthwhile subject. I started looking at this a while ago but got sidetracked. The one useful step I think I made was to decide you can't look at "debt" in isolation. From prehistory to the middle ages, you have three subjects that are entangled: Poor Relief (what we would now call "welfare"), Debt, and Slavery. Some people -- "neoabsolutist?" T. A. Jackson? -- were pushing this book and posting interesting extracts. It talked about the earliest civilisations (Babylon etc.), the gist I got was that debt mostly came about when a farmer's harvest was inadequate and they needed to borrow to get through. The other thing I remember is the theory that rulers used jubilees because commoners farming their own land would fight for the kingdom, but slaves/serfs/peasants wouldn't, so it was in the ruler's interest to restore their freedom periodically to keep the armies going. Without thinking it all through, it seems plausible that debts incurred to survive a bad harvest could or should be treated differently from debts incurred to, say, buy a new car. That's what I mean by saying that debt and "welfare" aren't separate subjects. Again, if everyone is subsistence farming, then working what used to be your land but is now Fred Bloggs's because he now owns it because he fed you through last winter when your stores ran out is not substantially different from being Fred Bloggs's slave. The Old Testament concept of jubilee is not simply forgiving debts, but returning land to the families that originally held it. Or rather, iirc, every 7 years money debts were cancelled and every 50 land was transferred back. To the hardcore libertarian "welfare" is an invalid concept, but in practice watching your neigbours starve is generally not an option, so some welfare/debt/slavery treatment is necessary.

    • Graeber's Debt is a good book. A more rational treatment of servitude (I'd outright ban the word "slavery" to be honest) is also something we need to do.

      • If Moldbug could use Hindu words for social castes, we can use Hebrew ones too. Avodah for "service", abd for "servant/slave", avodim as the plural form.

  • I also want to challenge the notion that eliminating credit is going to reduce inequality. With zero debt, everything is equity financed. That means you rent. No mortgages. You pay for your house with cash. Now, who is going to be able to buy the house, if not the rich? Everyone else will rent from them. And it's very hard to save up enough to buy a house if your are competing with the landlord who is taking 1/3 of your income and rolling that over to buy more houses while you tighten your belt and try to save after paying rent. A society in which people are denied credit benefits the rich, and a society in which ordinary people have access to credit is an ownership society, even if the wealthiest people are richer in the latter society. Take the virtuous, frugal, risk averse Germans and the heavily indebted credit addicted Spaniards. Compare home ownership rates in Germany (52%) and Spain (82%). The Spanish own their own homes and as a result, median household net worth (after accounting for debt) is higher in Spain (182K) than in Germany (51K). Yes, owing a mortgage sucks, but paying rent every month and not owning your home sucks even more. Germans are virtuous and avoid debt, with high downpayment requirements, whereas the Spanish have much easier credit access to credit. And who knows, maybe even more 'inequality', but they are still better off with ready access to credit than if they were credit constrained.

    • Of course the debt leverage affect the average price of a house. In a heavily indebted society such as ours asset prices have been inflated to absurd levels while wages remain stagnant. A jubilee causes asset prices to fall to more realistic levels, but we call this a crash because it is painful. Is there a less painful alternative to jubilee that fixes asset inflation? The frontier served this purpose for the first 100 years of the USA's existence. The commoners need a means of establishing a homestead, else they will demand a jubilee, or free stuff/UBI.

    • In what sense are Spaniards "better off" than Germans? Surely that's counterintuitive. Spaniards may have higher net worth but how useful is that? Germans seem to have more money to spend around.

      • Not exactly to the point, but the Spaniards are better off than the Germans because a) they still have a King with real power, even if he is a republican pantywaist, and (I think related) b) they can still say and think things Germans for which Germans would be crucified on the cross of racism. Does that mean I think Spain doesn't have a whole host of problems, or that quite frankly the gross mismanagement of the Spanish and Portuguese Empires aren't part of what got us in this mess, or that Spain is somehow going to be the saviour of Western civilisation? Don't be absurd.

  • I very much like Turchin but I don't like how he is so hung up on inequality. You can take the boy out of the Soviet Union but you cannot... or more likely because he is insisting on creating an empirical, quantitative science of history. I think he has some very good basic ideas, but trying to make history a numbers science is not a possible aim. Anyway so like the man who lost his car keys in the dark but is looking for it under the streetlight, he is quantifying whatever can be quantified, not what really matters. I think for him inequality is simply the only quantitative number he can find of internal divisions, for less cooperation and cohesion in a society. But status inequality matters more, but that is not a numbers game. And I don't even see why would inequality necessarily lead to less cohesion. All the cohesive people he mentions, like conquering Mongols, had rather inequal ways of sharing the war loot. The important part was that there was war loot, war loot is a tide that lifts all boats. Think Caesar. He had immense amounts of war loot. This was not distributed equally. But there was enough loot to pay his soldiers, have cohesion in his side. He had far more cohesion in his soldiers than in Roman society in general where there was a bit of a rich vs. poor thing going on. But his soldiers got enough loot so were happy and loyal. And still a lot left. Perhaps when a people cannot loot others anymore they start looting each other. But I don't see money being the more important factor in this. Internal cohesion can be lost just as well by fighting for power or status, rather than money. But that is not quantifiable. The poor really do care about money, but history is not decided by the poor, it is decided by elites who often care more about power and status. Okay, let's say it actually matters how many discontented poor supporters the rebellious elites can find. But whether the poor can be mobilized against the rich depends not really on the level of inequality but whether they have a Plan B. Of starting a business or something. Or more likely, directing their efforts outside the country, become a soldier for war loot, trade with colonies, start a farm or plantation on the colonies etc.

  • Very in depth discussion of debt and debt jubilees in the ancient world (east and west) here:

    • Hudson has a couple of good articles on the topic published in the Unz Review, plus a more theoretical book.

  • The point about the rough-and-readiness of jubilee may be that actually banning debt/slavery is very difficult. Black markets appear. "Yes you can enslave a starving man but only up to the next jubilee" is an easily enforcible limitation.

    • Outlawing things comes easy. Actually enforcing that law comes as easy as it is in sync with human nature, and viceversa. In the case of debt and servitude, you have your answer easily.

  • The ancient hebrews had a jubilee every fifty year : I think such a system removes the unpredictability some people here are criticizing. Also I second Zippy's thinking on usury.

  • You're right it does boil down to that: do we try something that partially worked but might be very hard to achieve in the modern global context, or do we heat things up. Yang himself might have been just a fleeting moment but UBI's always going to be on the table now, and as automation continues to even talk about eradicating huge industrial sectors' labour pools it becomes more and more important an option...... but is UBI an acceleration, driving globohomo economics to the limit rapidly, or is it a patch, keeping whitey safely distracted from the increasing number of bubbles in the water? I don't know....... but things can't go on as they are. It cannot be the case in 2219 that a house costs fifty years' family salary, a degree's required for toilet cleaning and costs fifty years' personal salary and the government owes 7000000% of Private Product Remaining to pension funds scraping annuities from returns of 0.00001%. My instinct's to try to solve it, to identify the problem concepts and get rid of them: but there's a sense in this piece that things have just moved too far along in the West, and the idea of sacrosanct private property rights is just too entrenched. It certainly explains the weird shift on the left from vicious and spiteful redistribution to outright partnership with the richest corporations the world has ever seen. If I had to solve it, I'd identify a few specific areas where property rights have been especially toxic: 1. Housing - a house is not an investment vehicle. Houses are for families, and while some moving around should be tolerated, the old idea of families being FROM somewhere specific is incredibly important. How we get from here back to there is a tricky one and I doubt feudal Great Houses with surrounding peasant dwellings would be easy to establish. We shall see, maybe the oligarchs will do that, but somehow I don't think they will: "where's your noblesse oblige Mr Zuckerberg?" "I'm not a nobleman and I bear no such obligation to these people, who should really pull themselves up by their bootstraps now that I've given them racial justice enshrined in law". 2. Labour as commodity - land labour and capital. This entire framework has to go. People are what matters, not just part of the more important production process. If you take on a person as part of your operation, that person becomes part of you: forever. Think Beaumarchais' Count Almaviva with his household of permanent staff, the Figaros and Susannas. The villains were the 'independent' workers, the schemers the lawyers and the doctors. There's nothing more petty and destructive than a 'professional'. 3. Technology for the benefit of consumers - we need to lose this prejudice. Every action of every individual impacts society and all its other members. Sometimes the autonomy and gratification of the individual is desirable but sometimes it isn't. It's a grand thing to really BLAST the Brahms German Requiem out of your favourite wog box but will society be glad when you do it at 11pm in the street while granny sleeps, or for that matter at 9am with the windows open while the night worker gets some shut-eye? Dear dear dear, CR, aren't you taking this a bit far? Screw the night worker - daytime noise is a protected privilege! Fine, abolish night work instead then. Either way nobody gets to ruin someone else's life for fun. Technology is a means to an end: it's good to simplify processes, eradicate onerous tasks and make life safer and cleaner. It's not good to get rid of cherished professions - YES EVEN BLACKSMITHING - just to free up extra money for Franky&Benny. 4. (Actually 3B) Technology as an end in itself - YES EVEN COPY TYPISTS!! Is it really a good thing that Barclays Bank can send you the identical 50000 word document once a month until the end of time? Wasn't the sheer hassle of getting a woman to do it a useful safeguard on that kind of 'spam'? I'm not even joking - if something's worth doing, it's worth putting the effort into. How nice would a world be in which there simply were no extraneous words? Speaking of which, this is too long. Another great piece. The world can certainly cope with econo-sceptics as well as progress-junkies.

    • Thanks. Housing is an interesting topic. Japanese housing is famously cheap, and built only to last 30 years, so there's little speculation. But land in the center of wealthy cities is by definition an investment asset, and there's little you can do to avoid that.

    • CR: Wealth redistribution is a theme of today's dissident Right, as it should be, but does wealth redistribution not depend on the existence of wealth to redistribute? If so, then how does blacksmithing fit? I've nothing against blacksmithing, of course, but some of us on the dissident Right talk as though the vast productive dynamism of our industrial economies were just a given, as though the state could deprecate productivity and the profit motive without wrecking the country's general affluence. Radical libertarianism is misguided but do you really want to swing us all to the opposite extreme? To link Peggy Noonan from an NRx blog seems banal (Noonan should be linking NRx, rather), yet even U.S. Boomercons like Noonan can occasionally get something right. Don't you think that Noonan strikes about the right balance in this particular matter? If not, why not?

      • This blog has a non-Anglospheric host and audience which do native English speakers the extraordinary courtesy of writing in English. Pardon. "Boomercon" is U.S. Alt Right vernacular for Boomer conservative, a Boomer (as everyone likely knows) being an aging member of the generation born following the Second World War. The joke ceases to be funny if one has to explain it, of course, but the Bloody Shovel's comment column was probably the wrong place for me to turn up that particular word.

        • Boomercon, Boomerwaffen, Magapede, these are all lovely smile-inducing terms. The quid pro quo is you guys steal biuzao and grass-eater and zhi lu wei ma. The economic non-kosher ingredient of the day is that it's not a choice between laissez-faire and redistribution. It's quite possible to have an authoritarian, illiberal, interventionist state that isn't seeking equality. Some things just might not be commodities, and labour's certainly a good example. It's quite spooky actually once that particular red cabbage has fallen, just how disturbing the anarcho-capitalist view is that trade brings order and happiness to the world and labour's just another commodity. There'll always be a few round the edges of that idea talking about people starving, and not as an example of why it's a horrible idea! Housing's also special, in my humble opinion. The idea that people's dwellings are tradeable assets used to build wealth is incredibly vulgar. I mean we wince at the idea of guys selling their arses, right? Outside hardcore Tom Woods circles, selling kidneys is the same story, yet somehow selling hours of your life as if it's just 'stuff' is quite natural. Maybe it's wrong. Maybe we should have jobs for life, apprenticeships, family traditions, communities where one rich dude really does decide everything you do 'career'-wise and you find happiness in embracing that top-down hierarchical plan. Maybe a house is something permanently attached to a family, or at least to a community. Maybe the spectacle of Somalis randomly moving into your neighbourhood because the local factory owner struggles to get people to choose chicken-sexing over bottom-wiping isn't in fact a natural one. Hooking it back to debt forgiveness, no matter what you think about the redistributive or inequality-cancelling nature of the tradition, it has another effect: to disincentivise reliance on passive debt-based income as an ongoing means to live. It's a way of proscribing 'usury' without having to get bogged down in the Talmudry of what level to pitch it at, what counts as interest, etc. etc. etc. - instead it's just understood that if you lend, sometimes you won't get it back, so the risk falls on the speculator instead of becoming more and more normalised as time goes by until the idea of running a business without a big pile of debt is inconceivable. (I'm thinking Greggs the bakers: will they still be debt-free once their expansion programme's complete?) An objection would be that such a society would be less innovative. Thank God, we can breathe a sigh of relief. Maybe it's an old guy thing, but something about not having to learn a whole new operating system every three years to work the television just strikes me as a welcome respite right now. That dial and three buttons looks mighty appealing compared to the inevitable mandatory updates, error messages and lost settings. Bah humbug!

            • Communist Revolutionary won’t respond to Noonan’s point because he is an entryist that is reading off a script. For some entertainment value, ask him: “What is preventing normal men from starting families? And why?” “Why is 50 Shades of Gray so popular with women?”

              • R7, good to hear from you. Jim of the Blog can be an interesting fellow and he has earned that big audience he has, but I would nevertheless avoid Jimian drama here. I do not know of the history CR and Jim have, but that's not my concern. Still, if that's your bait, I'll bite. Am not sure what the joke is about, but I'll play along. CR: what is preventing normal men from starting families? And why? Also, why is 50 Shades of Gray so popular with women? Moreover, do you know why I am asking these questions? I don't. While you're at it, you can still comment on Noonan's point if you like.

                • House prices, exacerbated by the demise of the extended family; Falling wages, exacerbated by women being driven into the workforce; Biased legal system privileging women in divorce cases and/or child custody cases; The institution of divorce per se; Atomised individualism: men spend their dough on video games and 'experiences' before they'll 'waste' it on kids; Delayed maturity; Lack of 'big picture' perspective that can only come from religion and national identity; Pessimism about the future. I haven't read "50 shades of Gray" but if the implication is that women are masochistic, there are many interpretations of that idea. It's equally plausible that pornography itself fosters perverted ways of feeling. That 'Jim' guy's fine. He spits the dummy when people stray too far from the GOP and/or Mises Institute, just as I spit the dummy when people praise The Beatles or pour scorn on Schumann. He's a fabulously entertaining and enlightening writer irrespective of his motives for keeping the goyim from talking about (((capital))).

                  • PS. (Sorry for spam): I forgot prospoverty - when people can't afford the big things, they spend what they do have on the fairly big things (dining out, holidays, etc.) and this tends to keep them from saving up for the important things like children. Buy a house, you'll want to have children; buy a Playstation - not so much. Get really into the travelling thing? Definitely not so much. I can't remember what 'Jim' accused me of having said on his blog because I don't archive the pre-moderated comments, but I'm pretty sure my list of factors was almost identical to the one listed above. Not sure which of these items counts as 'Marxism', but I gave up trying to find that out a long time ago. See to me Marx is all about wanting equality, but I guess to other people it has other meanings. There are some genetic links there too that probably make things a bit more nuanced than when they're absent.

                  • >men spend their dough on video games and ‘experiences’ before they’ll ‘waste’ it on kids Why won't you mention the much more crucial and prevalent opposite phenomenon: single women who piss away all their time, energy, and money on the Eat-Pray-Love lifestyle, who piss away their salaries on vacations, indulgences, restaurants, etc. Why won't you recognize that women are the sole arbiters of the sexual market, and that if men don't get to be betabuxxers nowadays, it's not because men are no longer willing to be betabuxxers, but because women shut them out of the sexual market, as they prefer to spend their time with Chad and so on? The reality is, there's no shortage of men willing to start females; but there is a great shortage of women willing to put aside their wasteful lifestyles and make-work "career" and commit to the Trad life.

            • Sorry I'm having a brain-fart. Which link is the Noonan one? Can't find it to tell what it actually is. If the issue's inequality, I can't say I care too much about it although the point Spandrell makes here has a lot of merit, and debt forgiveness/jubilees are a great idea regardless of how much (or if) you care about inequality: jubilees are bad for debt and good for getting debt sidelined from society. It's currently far too central to everything. Sorry, not being deliberately evasive; will read Noonan if it's interesting. Just can't see where it is.

              • Peggy Noonan is too tame, conservative and outdated to be of much interest here, of course. An excellent writer, she is nevertheless a Roman Catholic (like me) of an earlier generation (sort of like me) that just can't quite grasp (hopefully not like me) the Democalypse in Europe and North America. I do not wish to make too much of her article, but this particular article is somewhat interesting, quite well written, and perhaps pertinent in view of your remarks. This is why I have linked it.

                • Ah right, ok. Yeah when she says "hard left" she means anti-capitalist. The trouble is, I'm not at all sure that that's true at all. Even AOC isn't really anti-capitalist she's just welfarist and envyist. I don't see anyone on the left, even the hardest eco-warriors, proposing to do anything about the out-of-control consumerism: travelling, living the high life, obsession with gadgets and trinkets, wastefulness of all sorts, and of course debt instead of saving. These could be left-wing causes, but they're not. They're actually right-wing causes now.

                • Sorry for triple post >.< Redistribution isn't anti-capitalism: redistribution imposes a bar to jump over that punishes small and independent privately owned businesses far more than it punishes corporations, so corporations are quite glad of the help. The recent tweet from Ben&Jerry's about supporting the Green New Deal is an example of this. As well as opposition to consumerism, I'd tend to say that the stock market itself is a toxic institution that behaves much like democracy (as in Hoppe, Moldbug) by prioritising the short term and smearing ownership between a shifting coalition of temporary stewards. Truly private businesses where someone in particular owns a specific thing for all time - is very different to a publicly traded company. It's not actually a mystery that egalitarians, redistributists and socialists love capitalism nowadays.

  • I suspect that the European Miracle had less to do with being hard on debtors, and more to do with the unprecedented explosion of human capital since the late 15th century. For instance, Great Britain and the United Provinces had a literacy rate of greater than 50% by the mid-17th century. This was an order of magnitude higher than anywhere else outside core Europe.

    • I wonder if Protestantism insisted on common folks being able to read the Bible because plenty of common folks were already smart enough that it seemed plausible they will be able to learn to read and if yes, did somehow the Black Death select for that or what?

      • I'm *very* skeptical than your average peasant in Luther's age could make better sense of the bible than your average Boomer today. What Protestants came up with over the decades was increasingly weird and wacko and just outright insane.

      • Black Death - Probably not. Protestantism - There have been several studies directly linking uptake of Protestantism and higher literacy rates centuries later (above and beyond the other cultural/historical characteristics of those regions). Apart from Judaism, it might be the one demonstrably human capital-improving religion (at least historically).

        • A great legacy of the Reformation, I think anyway, was the replacement of piety with scholarship. The holiness ladder became less salvarific and more educational. The jump to private interpretation of everything followed. Every man became his own bishop. The end to religious and moral standardization. The spiritual condition of civilization has followed a path to atomization (and I would argue oblivion) that is the inverse of the technical and economic development and standardization of the modern world. I think you are correct that Protestantism, in general, is human capital improving religion. One has the moral and ethical framework to pursue knowledge, wealth, and material success. The famous and extreme example of John D. Rockefeller, the Baptist Sunday School teacher comes to mind..... That being said, the Protestant Reformation as whole contained several competing and perhaps contradictory movements...the English Civil War is a undoubtably a manifestation of that. And indeed, the spirit of religious sedition permeated nearly every Anglophonic colonial experiment and was a key contribution factor in the American separatist struggle, it was a very low-church environment. There was a very readable book published a few years ago titled '1775' by Kevin Phillips that spent some time on exploring the religious/ideological matrices of colonial life. My feeling is that the impious nature of American life at birth combined with the present American global dominance contained the tragic seeds of much of our current predicament. Maybe I will explore this further in its own post another time. Of course, this intellectual liberation of the Protestant world perhaps contained the seeds of its own obliteration.

    • European miracle is older than the Industrial Revolution and even the Protestant Reformation. The famous "blue banana" started diverging around 1200. By the time the Protestant Reformation hit "core Europe" was considerably wealthier and more advanced than China. Most important factor was probably the Commercial Revolution. Trade fairs, bills of exchange, Templar banking, etc. I'm not really sure how to explain that. The standard model I guess is that Europe was politically fragmented so competing sovereigns tried hard to attract merchants, bankers, artisans, etc. There might be something to that considering the great progress of the Hellenistic era to the stagnancy of Pax Romana. But India historically has been relatively fragmented as well. The Church's focus on accurate time-keeping probably had a non-trivial impact as well. Not only on coordination, but also the development of technology (metallurgy, wood-working, machinery, etc.).

      • The idea that the European miracle predates the Reformations jives well with my thoughts. There were plenty of good fundamentals set in place and hard at work long before the 95 theses. I would submit the Renaissance as more accurate lift off point for European supremacy, one that contributed greatly to the Reformation's existence. Both in helping to exacerbate the problems in the Church that the reformers hoped to fix as well as providing the framework for the intellectual (and inevitable military) struggle. Of course, the Renaissance itself did not materialize ex nihilo but that's a whole different conversation.

  • It's tempting for those of us of on this side of the aisle (alt-right, NRx, far-right, dissident right, paleocon, whatever) to look to the wisdom of the past for solutions. This isn't one where that applies, for a variety of reasons: 1 - The vast majority of money today is debt When a bank makes a loan, it places a credit in the borrower's account. This credit is newly created money. When debts are repaid, the money is in fact destroyed. Very little money today is physical currency. Historically most money was circulating coinage, though late in the gold standard era most money was also debt. This is why economists describe recessions following financial panics as "balance sheet recessions". Overextended borrowers deleverage via belt-tightening or bankruptcy, which is deflationary. So a major debt jubilee today, without an immediate corresponding issuance of new debt, would be massively deflationary. I suppose you could coordinate a very large government bond issue with a debt jubilee. 2 - Bankruptcy Historically bankruptcy mostly didn't exist. If you couldn't pay your debts, then you were enslaved, imprisoned, or forced into indentured servitude. Thanks to bankruptcy, borrowers can create their own debt jubilees as required. We all know the exception to this in America of course (student loans), and bankruptcy laws of course vary in other countries. 3 - Growth The preindustrial economy mostly did not have per capita growth. There was only absolute growth when more factors of production (labor and land mostly) were added, which were subject to Malthusian limits. Since the Medieval Commercial Revolution, we've had the new phenomenon of per capita growth as productivity growth is now continuous. As a result the ability to service existing debts over time tends to become easier. People talk a lot about stagnant wages, but that's a one-off effect from two events. One is the crushing of organized labor, and the second was China. Both are played out now. And even if wage stagnation is permanent (e.g. thanks to the open borders nuts), then growth will simply accrue to capital (and the state) which will do most of the borrowing instead. 4 - Iron Law of Wages no longer applies One of the reasons Karl Marx thought a socialist revolution was inevitable was the Iron Law of Wages. Historically wages always dropped to the minimum level necessary to sustain the life of a laborer. Wages were only high when there were labor shortages, like in frontier regions or after a massive population collapse like the Black Death. Wages for instance were a lot higher in the 15th century than the 16th. When Marx was writing, wages in England had actually been declining for around a century or so. He didn't expect this to change, and the miserable masses would naturally rise up to overthrow their exploiters. This changed towards the end of the 19th century. Wages started rising in the advanced countries and kept rising. Labor productivity growth outstripped the growth in the labor supply, something that's still true today. 5 - Lending has changed In the past, most lending was done against next year's crops or someone's land. Today most consumer lending is either against the value of non-income generating assets (houses and cars) or is unsecured (credit card debt, personal loans). Losing your house or your car sucks, but it isn't the end of the world. The main way people generate wealth today is through their labor power, which creditors have not been able to confiscate completely (they can still garnish your wages and seize your bank deposits, but by law you have to be left enough to sustain a decent lifestyle) for centuries. Whereas in the past you realistically lost first your crops, forcing you to borrow more, and then your land itself. After that you became a landless laborer which seems like it was hell on Earth in preindustrial times. By the time you were 45 if not sooner you were probably worthless. Needless to say there was no welfare state to help out then either, and your relatives were likely all broke as well (and if not broke soon grew to dislike you). There are grounds for a partial jubilee in student debt in America, not elsewhere. The government could even assume the financial burden to preserve the SANCTITY OF CONTRACTS. Other countries may have other situations, but the same general pattern applies to all modern countries without substantial loansharking. A quick word on sovereign bankruptcy--it still happens. And there is a consequence. For awhile the government either can't borrow or can only borrow at much higher interests rates. Look at Argentina's history. Depending on the sovereign's financial condition it can be a decent option.

      • Hi, long-time reader, first-time commenter. Mainly only comment on Anatoly Karlin's blog due time constaints. Wages stagnated in certain advanced economies, especially Britain and America, forty years ago. I think this is a one-off event brought about by the destruction of organized labor and the (re)integration of China into the world capitalist system. Wages are growing above the rate inflation, if not much, in our current economic expansion. It could be made somewhat permanent if the open borders nuts get their way. I say "somewhat" because the Third World can only supply so many workers with adequate productivity to function in advanced economies, and they too are seeing fertility collapse outside of Africa. Mexican TFR dropped from 5.8 in 1980 to 2.1 today, and is projected to drop to 1.6 by mid-century. But like I noted in my above post, if wages manage to stagnate permanently then new loans will increasingly be made to capital rather than labor. Physical space per person, and thus housing costs, will stagnate at present levels. Cars already no longer rise in price faster than inflation. Remaining issues would be student loans and non-debt based forms of exploitation like healthcare costs, housing costs in coastal metropolises, etc.

        • Well IIRC wage stagnation starts around 1972, and China only started to really get going in the early 80s, so there's some lag there. But you have a point.

          • The China shock really only hit the advanced economies after China joined the WTO at the end of the 20th century. From 2000-2008 for instance the USA lost one-third of its manufacturing jobs, largely to offshoring and not "automation". There were similar effects in other advanced capitalist countries. What got going in the 1970s was curbing the power of workers, which had reached unprecedented levels owing to the unusual conditions of the 20th century (mass manufacturing concentrated in urban centers, world wars, USSR, etc.). The combination of the energy crisis and the collapse of communism's appeal made that possible. The story wasn't the same everywhere either. Worker power never declined radically in the Nordic area, and it didn't decline as much on the Continent as it did in the Anglo-Saxon economies. The UK is currently an odd laggard in wages as well:

      • That is not an issue in itself. The issue is the lack of deflation. Technological progress should lead to deflation, as things become cheaper to produce, the consumer prices should be competed down. Sticky nominal wages with 2% consumer price deflation per year would give the working class the 2% per year real wage increase that they actually deserve, as simply a societal dividend of technological progress. Lacking that, even having inflation, it does not happen. And higher nominal wages are not intuitive at all, people deserve it if they work better, not if they are given better tools.

        • The lack of price deflation is only an issue for savers who insist on hoarding bank notes in home safes. In some countries (Eurozone, Sweden, Japan) it's also an issue for savings account cucks mystified by the concept of equities. Under the gold standard there was a broadly deflationary trend, but firms that had the power to do so would cut wages. The Pullman Strike, an 1894 nationwide railroad strike in the United States, occurred because the Pullman Company cut wages in response to poor sales. Outright wage cuts are less common today, but firms still cut labor costs as required by firing people, cutting hours, and not paying out bonuses. Note that during the golden era for the working class (1940-1973) there was (mostly) no gold standard and inflation was much greater than today. But nominal wage growth far outpaced nominal price growth, leading to vigorous growth in real wages and working class living standards. Deflation, incidentally, makes debt burdens that much worse.

          • "Note that during the golden era for the working class (1940-1973)" You are hilariously ignoring that during that period the US gov't massively inflated the currency to pay for the war, and that a large amount of that money went into factories, and then that afterward the rest of the world's industrial capacity was destroyed and the USD had become the world reserve currency.

        • Sort of jumping in here. I understand how, ceteris parabis, you could connect technological progress with deflationary pressure. I would argue that better, more efficient tools increases the minimal viable education level for workers and also reduces the need for as many workers....which translates into fewer workers that need to invest more into themselves to get that job. Both trends reduce the amount of total net take home pay in the economy, which reduces the amount of money available to spend on goods made more efficiently which makes it harder to make ends meet. So I would say that better tools begins a critical path towards higher wages for those able to get said jobs because it reduces the supply of eligible labor. If someone works better, my observation is that they deserve only as much additional pay as is necessary to prevent defection. Make the job more sophisticated, you have to offer a premium. Prep cooks work very hard for very little. Robot technicians make much more money for a much less demanding job. Granted my analogy crumbles since it is akin to comparing apples to soufflé but I hope my logic makes sense. In our glorious modern new economy however, I would submit that triple daggers of automation, outsourced production, and immigration bear much responsibility for wage stagnation. Not to mention asset price inflation....but I think those topics have been covered elsewhere already. Anyway, there are a lot of moving parts here.

          • "triple daggers of automation, outsourced production, and immigration bear much responsibility for wage stagnation." This. Mostly the outsourcing and immigration. Also the cost of commodities and quality-weighted food have increased dramatically since mid-2000s with increased demand from the overall global economy.

      • Measured as percentage of GDP wages have declined more than 50% in the US since peak in 1968 or so. I'm not qualified to speak about other nations There are a lot of reasons for this but combined with effects of modern urban life, its had a drastic effect on fertility. The US TFR went below replacement in 1972 and has managed to rise slightly above this only two years and only those because of immigration from highly natal cultures in a bubble year with three fertile generations (Older Gen Y , Gen X and a few of the youngest Baby Boomers) Basically its a near 50 year fertility decline buffered with immigration . Those immigrants have quickly become less fertile too from modernity and their older natal social capital declines. This is not a bad thing though. A general debt jubilee, closed borders preferably with repatriation combined with slow but sure population decline over 50 years or so would make the US and Europe much more pleasant places to live More people is great for the elite but often as not, terrible for the rest. However debt as economic tool is not going away do to the efficiency trap we are in. This would take a while to explain but consumerism doesn't work and demand is not infinite. TL;DR labor isn't valuable enough to get capital flowing and demand is already easily met with less production anyway so the economy can't function. In the US its already 40% state spending to keep it afloat.

        • Would you take it amiss if I disagreed, A.B.? Demand is practically infinite. The statement that "the economy can't function" wants greater precision; for, with precision, I believe that you might decide that your own statement were largely incorrect. The economy is not a machine like an automobile that can stop working. The economy pretty much always functions, like the wind pretty much always blows.

          • Yet oddly the j-right will frequently claim that even superficial amounts of 'communism' will lead to bread lines. (Of course the failure of this effect to materialise in the presence of the long-term extreme rigging of the price of money over time, which forms half of every single transaction in the economy, never seems to make them rethink that.) The more I wallow in non-egalitarian anti-capitalist thought (Mike Enoch etc.) the more I question the core assumptions that underpin Austrian Economics. Mises famously demonstrated that under communism it's not possible for prices to trickle up from finished goods to the factors of production, but today we have a dysfunctional oil market - who can seriously believe the true price of oil is $62 in 2019? But the way it works is like this: as oil becomes harder to extract, the price rises - but as soon as the price rises high enough to make less conventional methods of extraction profitable, supply increases accordingly, driving the price back down again, so the 'meteoric' rise that ought to be going on post-peak oil is completely suppressed........ not by government intervention and not by 'woke' capital, but by capitalism itself, functioning as intended. Capitalism ITSELF makes it totally impossible for society to think long-term about oil - not because of greed or inequality or any of that garbage but simply because it efficiently directs production. That very efficiency keeps the focus pinned to the short term at the expense of the big picture. Only an arbitrary, interventionist Leader can steer the ship - a real captain not the phantasm captain of automatic price 'discovery'. Prices shouldn't be 'discovered' but imposed. Just imagine for a second what Great Britain, especially Scotland, would look like if the anarcho-capitalists took over tomorrow and abolished alcohol duty!!!!!!!!!!!!!!!

          • I am always appreciative of intelligent disagreement doubly so when it as polite as yours. Demand is far far from infinite since time and interest is finite. So are resources really but that's another issue. You can only use or enjoy a rather finite amount of things, a couple of cars, X amount of music , read so many books and so on. In Japan they call this tsundoku when applied to books, its roughly "piled up reading" books you've bought but never read. Many of us who like computer games have a great many more than they will ever play. I am cheap and yet have over a hundred. I've finished maybe 10 at most and save one, those were short. This is the real norm and eventually people just realize that its not worth the cost and trouble to acquire things they do not want or need. Its also ecologically and structurally foolish to constantly grow, as Edward Abbey noted "Constant growth is the creed of the cancer cell." there simply isn't enough stuff for everyone. Consumerism, constant chasing of status through stuff has profoundly negative effects on people's psyche as well and the sooner we move away from it to a more stable economic model, the better off all of us will be.

  • People should read more baby's first economic redpills (the blogsphere is so behind these matters, obsolete I should say), so I'll post them here: [S: you will be polite to my friends, or you will be gone]

  • Isn’t this sort of what out elites are doing now on a global level? Reducing resource inequality between the first world and the third world and weakening rivals and making new allies in the process. Is there some fundamental difference between uplifting the local peasants and importing a new crop of more needy peasants?

    • I think the point that Turchin was trying to make was that at a meta-economic level the material qualifications for what constitutes membership of the 'rich' and the 'poor' broaden over time. This could be interpreted in real material terms or relative material terms. Sure there is plenty of social arbitrage, so yes things go up and down but can it not also follow that gap between the loaded and the great unwashed widens even though the 'poor' are better off? Quant example (let's disregard inflation/price index/etc. and treat a $ as a universal constant): say an immortal prole makes $1,000 in 1870 and that same prole makes $10,000 in 1970 for the same shit, different technological bucket - the immortal capitalist makes $100,000 in 1870 and $10,000,000 in 1970. These number are totally manufactured and have no bearing on reality but let's analyse the relative delta spread. The prole makes 10x more 100 years later but the capitalist makes 100x more. In my scenario the rich guy makes 100x as much as the prole in 1870 but 1000x in 1970. In this case, the prole lives better but his relative economic power versus the capitalist is weaker. Hence we have created a hypothetical set of relationships that bear out a material gain over time for all classes but an increase in income inequality. And since the relative supply of status, women, and political power in a society is rather more constant, this rise in inequality reduces the power of the prole to make optimal choices. This does mean that the 'poor' are getting 'poorer'. The inverse is also true for the rich guy. Now whether my scenario is borne out in the real world is another matter. That would take a considerable amount of work to determine. My gut instinct is that OP's thesis is true. On the subject of your specific example, I'm not sure there are any factory workers anymore, all the ones I know that would have become one are enjoying underemployment, recreational drugs, or glorious NEETdom. All are making much, much less than their parents and grandparents. Pretty sure smartphones, internet access, and all the fap material they can handle can't replace a stable job with one's hands, a reasonably privileged place on the mating ladder, and the satisfaction of a good day's labor. But I am generalizing based on a half-dozen isolated examples...... All hail the new economy.

  • As usual for the Bloody Shovel, some pretty smart comments grace this comment column. The blog still hosts the best comment threads on the Internet. I observe that college-educated minds elsewhere, even at IQ 120 or so, tend to find macroeconomic concepts slippery. I am not sure why. One reads and hears much today on the Alt Right about corporations that need brown immigrants as consumers, or whatever. Doesn't make much sense. Misses the point, but people just don't know why. The macroeconomic commentary here has maintained a higher plane. Most interesting. Keep it up.

    • Well, 120 is clearly not the average IQ of commenters here (certainly not of the commenters delving into economics detail). Second, a ≈ 120 IQ mind will find economics concepts very slipper forever if the people who master them keep using their jargon without a care to put themselves in the shoes of someone who does not know the basics. There are two barriers between a person and his having meaningful basic understanding of a field of knowledge 1) intelligence/will to expand his mind 2) The ****** attitude of everyone in the know to avoid making the basic concepts plain. Be it economics or IT, be it conscious or unconscious, you see this attitude. There is a post on this blog explaining the formation of tribal idioms by the desire to make their communications ununderstandable to the tribes around. That is instinct is still at play and strongly so.

  • Debt jubilees would kill the mortgage industry and make it much harder to get credit and cause all sorts of problems. The easier it to discharge debt, the harder it is to get credit. No free lunch. A jubilee already exists in the form of death. This is all pretty obvious but maybe as a thought experiment more interesting.

    • But do our societies want so much credit? Especially when so much of it is (((credit)))? Could we not do with less of that? Macroeconomics is sufficiently complicated that many relevant factors must remain unknown to me, yet would you not expect a restriction of credit (i) sto hrink the pool of able buyers at current prices and thus (ii) to cause housing prices to fall? I once had a conversation with a wealthy entrepreneur who insisted that rising real-estate prices were essential to a strong economy. That entrepreneur is richer and more successful than I so maybe you should listen to him rather than me, but his view of the matter never made much sense to me. Do we really want an economy that prices young couples out of the housing market? I am not sure whom such an economy is supposed to benefit. If I am wrong, then either (a) I have mislinked easy credit to housing unaffordability or (b) I have misjudged unaffordability to be a problem. If wrong, feel free to explain.

  • The idea of debt and joint-stock corporation are two separate things; debt was invented first, and the JSC way later. Which means there hasn't been a time where JSC existed but debt didn't. In principle, the accumulation of capital via selling stocks is enough to keep an economy flowing, without the need for debt. And no usury-related issues! Could there be any problem with this approach? "What about people needing to get into debt due to unexpected expenses (crop failure, etc)?" Well, the would-be borrower can still sell his future labor for a given period of time in exchange for present money. The main problem with debt, is the fact that moneylenders have all the incentives to lend money to high time preference borrowers who use it to consume wastefully, so they can debt enslave them in the future through refinancing and increasing interests. By tying the money to a non-renegotiable and limited period of labor, long-term debt slavery is prevented, as far as I can see. Feel free to crash-test this thought experiment.

  • A few commenters have already nailed it on why debt jubilees are a joke idea. We already have bankruptcy, student loans can mostly be forebeared or income indexed or ultimately forgiven, etc. And credit markets are pretty crucial to society. The bigger issue is not debt, it's status inequality and crowding etc. UBI really does solve a lot of the "crowd into the city for slightly higher wages" problem. In a lot of cases we'd be better off with the poor moving farther away for very low cost of living etc. If we actually cared about people, not the aggregate demand for big corporations and the minimal possible labor costs, then tariffs and immigration restriction are a given. As are massive taxes on outsourcing. Yes, it adds value, great, so pay a 50% premium on all foreign wages or foreign labor used, since you're now using labor that won't pay income taxes or spend in-county. Mercantilism works, labor force restriction (to favor those in-country, if only because they are taxed and also spend in country....) works. Same idea for taxing any remittances or capital leaving the country. If all your earnings get sent abroad to spend there, makes sense to tax them more.

    • Indeed. I wonder if the tariff thing going on right now is meant to be the first step in that direction — having a country that manufactures most of what it consumes again. Still, with a elite part hostile and part indifferent to the issue, what can the President do?

  • Having debt jubilee not ony makes interest rates skyrocket, but I think it also destroy modern money (which is a sort of globalised lend/debt) as a value storage, and that's probably the main reason it's not really possible in the modern western world. Land used to be the storage, money/debt the fluid exchange medium, but now money (and other forms of lends, like shares and the like) is also used as storage. debt-jubilee too much and you are back to land (which can be seized) and storing hidden gold. By the way, why debt jubilees instead of land seizes? Probably because it was less dangerous to piss off merchants than land-owner (nobility)...I think that too has changed in the modern world....

  • I think Nick Land is right because he clearly understands the Social Darwinist nature of the universe. There can be no value gained in a population without a lot of harsh natural selection, that means a lot of dead people, eunuchs or incels. The best traits can only be obtained via the cruelest and least humane natural selection. For example low-IQ groups are low-IQ not because they are somehow evil but because they didn't go through the harsh selections. In fact high-IQ groups used to have low-IQ too. However the environment just eliminated a disproportionally large part of the low-IQ population in such groups which is why such groups have high average IQ. Let's apply this principle to egalitarianism. Egalitarianism has always been a bad idea because it reduces selection pressure. Moreover it has always been a weapon of despots to ensure that there can be no one to challenge them. Debt jubilee is one of such tools. Another is splitting of inheritance among multiple kids as practiced in places such as China and France. To maintain balance of power there must be people comparable to feudal lords who can check the power of the top political leaders (kings & emperors). Otherwise we will witness despotism egalitarianism of everyone other than the despot which is a system awful for innovation and development.

  • I don't know about the Chinese examples but other examples of debt jubilees tend to be weak when you actually look into them. The evidence just isn't good that they were a regular, reoccurring feature of the societies that supposedly did them. I make my living issuing and holding debt. I am very invested in things working as they do. My belief is that we are heading for a very large debt jubilee in the form of war. If you study warfare from the point of debt all of history makes sense. We are reaching a point where debts simply cannot be paid. This is normal and it is the point where you get mass blowups like WWI and WWII. It is the only real time debts get erased. Our credit system is a very slow moving ponzi scheme which REQUIRES new debt to stay alive. When the point is reached that new, credible borrowers cease to exist the system must implode. What makes this time unique is that the collapse will coincide with a huge demographic drop off in new credible borrowers. This will make the recovery phase very different to all wider human history. There obviously have been local population drops but all collapse/recovery cycles have had the benefit of growing borrower populations.

  • Going to have your take at the USA-China tariff thing? I wonder whether this is a policy of Trump's, or one dictated by Actual Government, with clues pointing to the former.

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