What is a “clean slate”in fiscal policy?

I recently read two closely related articles by macro-economist and historian Michael Hudson, on the practice of governments in the Ancient Near-East (Assyria, Babylonia and Biblical lands) periodically to ‘wipe the slate’  clean of indebtedness, and ‘reset the clock’, whether with a change of rulers, or in times of special hardship from war, or natural disasters, but also in regular “jubilee” years as commanded by Jewish scripture. These ideas obviously have great relevance in today’s political wars here and abroad, over the general increase of indebtedness and the inequality it brings about. I find his piece also fascinating in the view he takes of Biblical interpretation and criticism – a subject I’ve long followed. Links to Hudson’s articles are at the end.

[By the way, the expression  “Wiping the slate clean,” comes from the old practice among pub owners of keeping customers’ accounts in chalk on a slate.]

New rulers would  often cancel debts for the practical purposes of having subjects favor them, as well as realizing that deeply indebted citizens won’t function well in warfare, or in farming and other economic work, if they are under too much debt burden, especially if they made themselves ‘debt  servants’ to someone to pay off past loans. An additional factor is that these ancient cultures had a non-western notion  of time  – i.e that time is ‘cyclical’ rather than historic. It recognizes that life repeats patterns, and renewal is universal.

Hudson – a long-time student of Middle Eastern languages – is particularly critical of the way western economists (and the politicians they advise) misread and misinterpret the available ancient texts, in order to advance their ideologies and support fiscal policies which favor them. Such intellectual dishonesty and abuse is so common that experts in these ancient languages  (Assyriologists, etc.) have come to refuse to share their findings with those who would use them, not  in the spirit of science, which presumes uncertainty and change, but in the attempt to find  justification for their preconceived ideas. As an example, he critiques William Goetzmann’s 2016 book, Money Changes Everything, thus:

“But the past century’s “Austrian” and kindred individualistic “free market” financial theories have created a junk archaeology that depicts monetary and fiscal reform as being against nature and leading to a crash – such as Goetzmann’s fantasy of “the crash of 1788” – instead of avoiding financial distress by restoring economic balance and equity.”

It’s obvious that debts increase with time, apparently without end unless someone or something stops the process. This fact is often ignored by people who use credit cards without attending to  how quickly they can overcome the holder’s ability to repay. Once a debt reaches the point where the debtor must borrow to pay off the debt, the task becomes a vicious cycle of increasing indebtedness. The situation of Greece in relation to the ECB (European Central Bank) during the past decade is an obvious example, with terrible social (and political) consequences, current and predicted. Similar things are threatening other ‘peripheral’ countries in Europe, like Ireland, Spain, Portugal and Italy.

For me personally, one theme here is particularly relevant. It’s well known that the terms for ‘debt’ ‘trespass’, ‘iniquity’ and ‘sin’ are used frequently and interchangeably in Christian (Greek) and Jewish (Hebrew) scriptures: e.g. “The Lord’s  Prayer” (Mt 6:12), or Daniel’s confession (Dan 9:7). But it’s often claimed that Jesus’ emphasis was not on money debt forgiveness, but rather on forgiveness of sins, because he told his disciples “For you have the poor always with you …” (Mt 26:11) . Hudson suggests that Jesus does indeed mean the forgiveness of money debt. I think Hudson is  right, but I would add there is also and always a deeper meaning in scripture, beyond the literal, even when the latter appears to contradict the spirit. I take this view from the writing of Emanuel Swedenborg (1668 – 1772), the unorthodox  Enlightenment scientist, philosopher and critic of traditional Christian thinking.

We can say, from this interpretation, that biblical texts about debt also include symbolic, inner (spiritual) teachings about what is owed.  Clearly we ‘owe’ everything to God, because he loves us unequivocally, regardless of our trespasses. Forgiveness is the spirit of divine love. If we would seek to emulate that spirit, we should forgive others, as a matter of principle, regardless of  what harm others may intend. As Jesus  told Peter, don’t forgive merely seven times, but “seventy times seven” – i.e.  always (Mt 18:22).

Forgiveness of my neighbor, then, is an expression of the spirit of love, whether or not I happen to ‘like’ my neighbor. Let me add a rational note. We must forgive – i.e. love – our neighbor, whoever that may be. But we ought not always dismiss her wrong doing. Sometimes ‘tough love’ is needed, in order that our loving, ‘good deeds’ may bring real benefit and support to the one concerned, whoever she is. Depending on circumstances, our love for another (whether an individual, a group, or even a nation) may require efforts  to prevent, correct or even punish that neighbor’s  bad actions, from whatever motive they might seem to follow. We never know others’ motives. Even our own motives may need deep, disciplined objectivity to uncover, because, in my opinion, no one wants to discover that she is morally or spiritually flawed, let alone needy of forgiveness. But discovering and following truth is the only path to positive growth. What we ‘feel like’ won’t do it.

Here is Hudson’s talk on a clean slate

Here is Hudson’s critique of Goetzmann.

 

 

 

 

 

 

 

 

 

 

 

About justin

Justin retired from a long career, teaching philosophy, world religions and humanities in and near Chicago. Above all, critical thinking has been his teaching goal - i.e. to encourage the habit of asking questions, and looking for answers that are well supported by reasoning. His style is to engage people in discussion in a relaxed atmosphere. His goal is to be a true philosopher ('lover of wisdom') and show others the value of a generous, open-minded and objective search for the biggest, truest picture of reality possible. It may sound old fashioned today, but he believes there is a reality which is approachable, and worth looking for. His motto is “Once a thinker, always a thinker.” He continues the journey over the Web, seeking interaction with students, friends and strangers, through essays, books and blog posts.
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