Societies have tended to polarize between creditors and debtors since ancient times, but this tendency can and must be reversed.
Today, the wealthy depict inequality in glowing colors as a byproduct of economies pulling ahead, “creating wealth” by innovations that add to prosperity. This view is unprecedented in history.
From antiquity to quite recently, personal accumulation of large amounts of wealth was frowned upon, because it usually was achieved at the expense of others. One party’s gain often tended to be at the expense of others, polarizing communities by pushing many below poverty levels.
The most corrosive method of gaining personal wealth, from the ancient world to today, is interest-bearing debt that mounts up with compound interest. The inability to pay has led small farmers and the poor to lose their property, homes, and ultimately their liberty as they become bond servants to pay their debts.
And since medieval times, the inability of governments to pay foreign bankers has forced them to privatize public infrastructure and other community assets, creating monopolies that enrich a creditor-investor overclass whose wealth was achieved by imposing austerity on the rest of society.
The overriding economic myth of today is that debts can and should be paid. But the reality is that the volume of debt tends to grow much more rapidly than an economy’s ability to pay. So in the end, debts that can’t be paid, won’t be.
The big question is, how won’t they be paid? Either the debts will be written down (as banks are often willing to do for corporations and commercial debt), or debtors will forfeit their property to foreclosing creditors.
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