On December 8th, 2016, the Kairos Center hosted “The Land Belongs to God: The Bible’s Commandment Against Wealth and Poverty” at Union Theological Seminary. Our featured speaker was Dr. Michael Hudson, an economist who has studied the history of debt — as well as its consequences and the struggles that have been fought around it — in societies from ancient Babylonia up through today. Dr. Hudson’s recent book, J is for Junk Economics, was released in February, 2017, and his work on the history of debt in the Near East will be published by The Institute for the Study of Long-Term Economic Trends (ISLET) in early 2018.
Earlier in the day, the Kairos Center had a lunch conversation with Dr. Hudson on debt, politics, the Bible, and other issues. Below is an edited and condensed transcript of that discussion.
Kairos Center: Where did your interest in politics come from?
Dr. Michael Hudson: My father was a labor leader. He was sent to jail 75 years ago under the Smith Act for advocating the overthrow of the government through force and violence. The Attorney General later wrote it was the only thing he was ashamed of doing.
When he got out of jail, we moved to Chicago. I grew up in Hyde Park, went to the Lab School. It was a very formative experience. My closest friend in high school was Gavin MacFadyen — he was the head of the Center for Investigative Journalism and we spent a lot of time together. I grew up knowing most of the labor leaders and socialists in Chicago and elsewhere. People would come to the house – people who worked with Rosa Luxembourg, Karl Liebknecht – and they taught me the stories to remember when they all died.
KC: What inspired you to study economics?
MH: I came to New York and was encouraged by various people in my life that if I wanted to learn about economics I should go work on Wall Street. My degree in Chicago was in Germanic philology not economics. I never went near the economics department. So I went to work first for the Central Bank, then moved to Chase Manhattan. And while I was there I met an executive from the National Catholic Welfare Conference who I spoke to about population growth and Malthus, and I wrote him a letter saying that if you were not going to cut the population down to the food supply then you had to increase the food supply to feed the population.
He sent this around to most of the bishops and I began working with Monsignor Knot at Pittsburgh who later became Cardinal Knot and the foreign secretary of the Vatican. The Vatican then sent me around the country giving speeches on economics. I also worked with various Protestant groups who were attracted to my ideas. The plan was for Pope John Paul I to start an academy for Geo-economics to talk about land reform and debt that was to be centered in Tulane. But then he died and the two other popes who came in were not interested.
KC: How did you go from modern economics to the study of debt in the Bible and the ancient world?
MH: I worked in London with Peter Challen for the Christian campaign for monetary justice. He introduced me to Archbishop Welby, focusing on debt, but they were not able to get the Church as a whole to focus on debt. As it happened I worked for the UN pointing out that third world debt could not possibly be paid and had to be forgiven. After a riot at a meeting in Mexico, I decided to write a whole history of debt cancellations.
It took me about a year to get back to Greece and Rome and the biblical world. But I found a mass of material that had been ignored in the books on Mesopotamia, Sumer and Babylonia. So in 1984 I joined the Peabody Museum, Harvard’s anthropology department in Babylonian archaeology. We found that the word that was used in Babylonian for debt cancellation, andurarum, was the cognate to the Hebrew word, duror, which was used for the Jubilee year. And it turned out that the biblical scholarship taking place and just gaining momentum in the 1980s showed that the Bible was really written upon the return of the Jews from Exile.
The archaeology picture is very different from what you read in the Bible. There are no records at all about who got what land, no records at all about the Jubilee year after the return from exile, because they didn’t use clay. The most recent research in the last few years has shown that only some of the Jews came back to Israel, that there were many Jewish families that remained in Babylonia. They were thoroughly assimilated, part of the local culture. So it was a particular group of Jews that came back.
What we’ve also found is the Qumran scrolls. The scrolls were in Midrash, that is a collection of all of the biblical commentary on debt cancellation and everywhere that it occurred, Psalms, Isaiah. The whole Bible was rewritten from the point of view of redistributing the land and canceling the debts. The laws were a literal translation of the royal Babylonian proclamations of the time. What we found out was a parallel line of biblical studies.
You can imagine that when the Qumran scrolls were found the Christian churches all said this isn’t Christianity and they claimed that they must have been a sect. It turns out that these were the basic library of the temple in Jerusalem that was moved for safekeeping and they weren’t a sect, this was the official background.
KC: How does all this relate to Jesus and the New Testament period?
MH: This throws new light on what the fight over Jesus was. During his time a waiver was proposed whereby people would sign away their rights under the Jubilee year. The pretense in modern biblical scholarship is that the Jubilee could never have really occurred, because if it really happened, people wouldn’t lend money. Who would lend money if the debts were going to be cancelled?
The fallacy here is that people didn’t owe debts for borrowing money. They owed debts for not paying their bills. They ran up debts cause they couldn’t pay their taxes and owed money to the tax collectors who said, “You pay this or we’re going to throw you in jail.” And the whole economy worked very much on credit, not on cash. This is what the debts were owed for. And these are the debts that Jesus said should be cancelled. He gave his very first sermon when he opened up the book of Isaiah and read about canceling the debts and Jesus said that’s why he’s here. You do not hear this often in the churches, but this is in the Bible.
KC: What, then, do you say to those who say that the Bible isn’t about economics?
MH: The Bible is all about economics. Take, for example, the translation of the Lord’s Prayer, and compare it to the scroll 11Q Melchizedok which is the Midrash of all debt cancellation. It’s very clear debt cancellation is what’s meant. The word for sin and debt is the same in all language, and it goes back to the ancient concept in Europe called wergild. If you injure somebody, either he gets to kill you or you get to pay him and the payment which was called the Schuld, or the obligation, was the word injury with a saying. So a Schuld, debt and injury are the same everywhere.
KC: Has any of this work been popularized outside of the Academy to those who need to hear it?
MH: Most of my work on antiquity has been in scholarly publications, not popular lecturing. I didn’t think anybody was going to be interested in the near Eastern background until they were interested in today’s debt problems. But David Graeber wrote Debt following this theory and it took off.
There was a time when the whole ancient world was in a debt crisis going into a dark age. There is a dispute around this term, “the dark age.” We’ve had economists who’ve studied the GDP back then and they’ve found that the GDP and output were going up, because they’ve found expensive pottery and artwork in the houses of the very rich. Well imagine how Andy Warhol’s paintings are part of the GDP and it’s all going up and if you look at how rich the rich were getting, the economy was actually expanding, despite the fact that the 99% were falling into serfdom.
I think we’re in a similar situation right now. Since 2008, we’ve been hearing that the economy has been getting better and better. It turns out that all of the growth in national income and GDP since 2008 has been absorbed by the upper 5%. For the 95% it’s been going down.
My most recent book, J is for Junk Economics, basically claims that what people call economic growth is actually the FIRE sector. It’s Goldman-Sachs, it’s Chase Manhattan, it’s Donald Trump and the landlords. None of its adds anything to output at all, adds any goods and services, it’s because the rich are the whole GDP and the rest of the population are simply left at the bottom.
KC: How, if at all, have the churches responded to your research?
MH: I think it would be appropriate to have an encyclical on debt and property. But the spirit of our times is exactly the opposite: you’re having the pressure under the Democrats and Republicans to cut taxes on the rich, especially to cut taxes on real estate, and that’s where all of the money is. This absence of a public option in real estate is forcing all of the rents up, which is why so many people are homeless, because housing should basically be a public right, just as healthcare and other things.
All of this used to be done. And it was done for very practical reasons in Sumer and Babylonia. If the rulers wouldn’t cancel the debts, people would just run away and go somewhere else. By the 14th century BC the situation was so bad that they were all defecting and would make armed bands called the hapiru. And there’s a general belief that the hapiru were the original Hebrews. They were people fleeing from debt peonage in their own country.
I think we’re having a similar economic dynamic today. I’ve spent quite a bit of time in Greece and you can see the problems the Greeks are having, being reduced to debt peonage. Europe is basically shrinking. It’s turning into a dead zone and yet the labor parties, the parties that call themselves socialists, are now on the far right of the spectrum.
There has to be a whole realignment. Now the question is how do you do this? Thirty years ago, there was hope. Then you had almost all the religions swing around to the right. Obviously it’s going to be a fight.
KC: How could we do more to popularize what you’re doing? Because I think most people don’t know this history at all. Both the connection with the biblical material and the way that you are seeing what’s happening right now. They seem to be inextricably connected, those two things.
MH: My archaeology and biblical work has only been discussed academically. There’s been almost no connection at all made between my current economic work and political work.
Liz Theoharis: I have a couple of questions. Most of my academic work is informed by the anti-poverty organizing I’ve been doing for a long time, but is rooted in a reinterpretation of Matthew 26, where Jesus says, “The poor will be with you always, but you will not always have me.” And in part it’s a quotation of Deuteronomy 15.
When I was doing some of this work, even the very progressive biblical scholars were skeptical of the conservatism of Deuteronomy. And so they argue that radical social movements are what produce some of the debt cancellation but then what’s reified in Deuteronomy are the more social democratic responses to more radical action. I would love to hear some of your thoughts on that. Maybe to do with Deuteronomy, maybe to do with other historical parallels that one could apply methodologically to Deuteronomy, because to me they said that to discredit the radicalism, how revolutionary these economic practices really were. And how they actually happened. So that much of the work of reclaiming Deuteronomy is saying these practices really happened and these are written down because people were trying to do away with practices that were happening.
The other question or point is that I think much of the reason that we have been trying to look at the Bible in its social and economic context is that it has something to say about our social and economic context today.
What I am finding is that people, regular people, are just really hungry for understanding that context and for learning about any moment in the public sphere when those kinds of histories took place. For instance around the Da Vinci Code, the reason it was so popular was because people know there’s a different story that’s never told to them, even in some of its inaccuracies, and they’re drawn to it. And I see something similar with the kind of economic practices and particularly debt cancellation practices. I see people really hungry for this and yet there is a real inadequacy of resources to make that translation and to make that transition. Most of the books and articles I read doesn’t make those connections. But your work makes these connections.
MH: After the return from exile, that’s when the Bible was put together and Jewish history rewritten as if the whole Bible from the very founding of Israel, of David and Solomon, as if it were all a class war. And the real class war was debtors against creditors.
The pyramids were not built by slaves, neither Jewish nor anyone else. They were built by very skilled labor that was well fed and had a lot of beer. We have the records for all of this. So we know what they were paid. This is all published in Labor in the Near East.
We know what was happening in Israel was just what was happening in Rome. You had Zedekiah going to war with the Assyrians and he promised everyone he was going to cancel the debts if they came and joined the army. Then they joined the army, they fought, and then he didn’t cancel the debts. So he was a bad king.
As a matter of fact, if you look at the Bible, all the kings are pretty bad. They realized that all throughout the ancient world in the first millennium, the kings either were overthrown or they became just the heads of the aristocracy. So what Leviticus did was take debt cancellation out of the hands of kings. Throughout the near east when a king would take the throne, the first thing he would do would be to cancel everybody’s debts, redistribute the land, free the bondholders, and the slaves would be returned to their original owners. They didn’t free the slaves in this, they were returned to the owners. They did this because they had the idea that every reign should begin in economic balance. It should begin in order.
We have the economic models they used, the mathematical models that were used in 1,800 BC. These mathematical models are superior to any model that’s taught today in the University of Chicago or elsewhere, because they’re very simple. The first thing, they understood compound interest and how principles double every five years. And any rate of interest is a doubling time. They also understood the S-curve, that growth tapers off. Well, every economy works in an S-curve. Basically if you look at a business cycle it’s a series of S-curves tapering off.
As a natural tendency of any economy, if you know simple mathematics, you know that debt succeeds the means to pay. They all knew that — in Sumer, in Babylonia –and the job of the ruler was to free the debt bondsmen. Because if you let the debtors be enslaved to the creditors, then who is going to train the army? Any country that didn’t do that was going to be conquered by other people. We have Greek military manuals from, I think, the 3rd century by Tacticus saying, “People, if you want to conquer a city say you’re going to cancel debts; they’ll come over to your side. And if you want to defend a city, you promise to cancel their debts.”
While Zedekiah was going back on his word in Judea, you had Coriolanus in Rome doing the same thing. Rome went to war, he promised to cancel the people’s debts — this is what Shakespeare’s play was all about — and then he didn’t do it. You had the same thing everywhere. They all promised the population one thing and then they slammed down and double-crossed their backers. It’s what kings did then and it’s what’s happening today.
KC: Any final thoughts about what this history means for us today?
MH: I think in popularizing this history, the fact is you can’t depend on rulers. You cannot put your faith in princes to do things. It can only be the people that will actually do something. That has to be the message.
Now, people say that the rulers never canceled debts. But we now translated all of the legal records. We have the lawsuits: “Do I really have to cancel this debt?” “No you don’t or yes you do have to cancel them.” They went to court. We have every debt cancellation of every member of Hammurabi’s dynasty and his great-great-grandson Ammi-Saduqa. You can see the rulers are trying to close all of the loopholes that the creditors keep trying to develop. You can show that this was done for 2,000 years.
For example, just about everybody’s heard of the Rosetta Stone. What they don’t know is that it’s about debt cancellation. They had a young ruler and said, “Do what the pharaohs of the past did, cancel the debts.” It’s all written right there. There’s a reason everybody knows about the Rosetta Stone and yet nobody knows what’s in it.
I think that’s what you have to say: what the churches tell you is Christianity is not Christianity. Jesus is not going to make you rich. Jesus is not going to give you a bigger car if you help us build a cathedral. And you have to say that the Bible is all about economics. This is the real Bible, this is the real history.