Debt Cancellation,

1. Economies are not automatically self-correcting

1.1 Intro
Economies are not automatically self-correcting, as standard economists would tell you, this is a modern myth.^[16] How debt and interest emerged in human history and formed ancient economic relations, has been researched by scholars, such as Michael Hudson and David Graeber. Regarding debt and interest in more recent, pre-capitalistic conditions, were reseached by Karl Marx, who is also quoted here.
Michael Hudson^[7] is an expert in economic history and particularly the development of debt and interest since Babylonian times, where perodical debt cancellation was the norm.

David Graeber is also critical towards the general/ default understanding that debts always have to be paid back, no matter what.

Karl Marx showed already in the 1860ies that debt and interest, if not regulated, while enriching the donor class, will lead to an increased polarization and ultimately to the destruction of the economy. This is exactly the past we are on today.

This is contrasted with the precise stand of Islam against interest, declaring interest taking among the worst offenses.^[n1]
In this respect Islam continues and improves on the legacy of ancient civilisations, in what is true and beneficial.

1.2 Arnaud Bertrand
This is an absolutely fascinating talk by economist Michael Hudson. He explains that debt cancellation was always a central problem in economics: as far back as you go in history, there always periodically come times when debts have accumulated too much and "there's no automatic self-correcting economy", this is a myth.

He posits that the way the current western economic system is set up, with the holding of debt privatized and distributed, makes debt cancellation close to impossible, basically entrenching the problem and cementing the constitution of an oligarchy of creditors.

He opposes this to China, which "centralized money creation, debt creation, banking and credit as a public utility", which makes it much easier for them to cancel debts if and when they accumulate, and avoid the construction of that creditor oligarchy and the social problems it creates.
@RnaudBertrand

2. The Islamic Interest-Free Economy

2.1 All Interest is forbidden in Islam by the Lawgiver (Allah)
Islam has a very clear and distinct position on interest and usury. Whereas in western societies, already in the Middle Ages,^[3] there was a distinction between the two (interest and usury), in Islam, every increase of money exchange for debt payment, or other, is haram, forbidden.

2.2 Why Is Riba/Interest Prohibited?
The main reason riba is prohibited is the concept that it makes the rich richer and the poor poorer. There is an inequality in the dealings between the parties that is frowned upon in Islam. Interest is seen as perpetuating and often increasing the gap between rich and poor humans in society.^[2]

2.3 Hesham M. Sharawy
Simply stated, Islamic law prohibits interest because it fosters the accumulation of wealth that is not a product of work. That the concepts of work and [lawful or] unlawful gain in Islam are central to the life of every Muslim cannot be disputed. The accumulation of wealth from interest is contrary to these fundamental ideals.

2.4 Hesham M. Sharawy - a business example
It is clear that Mohamed (for his restaurant), could have realized his dream under the Islamic banking and finance system now existing. For instance, the mudaraba transaction could have financed his venture interest-free.
Mohamed, as entrepreneur, would use the capital of the rabbul-mal or investor to finance his business. He would then share the profits with the rabbul-mal, and both parties to the transaction would be satisfied much like the result under the capitalist system.
Furthermore, the goals of Islam, under this transaction, have been satisfied. Mohamed can use his wealth as a means to satisfy the beneficent goals of the Islamic faith such as Zakah.

Under the musharaka financing method, Mohamed could combine his capital with that of a lender, thereby forming a partnership in which they would share the profits of the restaurant commensurate with the amount of capital invested by each partner.
Again, Mohamed could both achieve his goal of becoming a successful entrepreneur while also satisfying the obligation he has to Allah (God) and his faith.
Source: Understanding The Islamic Prohibition Of Interest^[8]

2.5 The Islamic View on Debt
Islam does not prohibit debt; it recognises the fact that people may face circumstances that necessitate borrowing. However, it emphasises caution, responsibility, and most importantly, the intention and effort to repay the debt promptly. One of the foundational elements in Islamic financial ethics is the prohibition of 'Riba' (usury or interest). This reflects, among many other things, the Islamic principle of social justice, ensuring that the burden of risk is not disproportionately placed on the borrower and preventing exploitative lending practices. Here, the Shariah protects the borrowers and debtors. The Shariah encourages lenders to go easy with debtors, and in fact, Shariah promotes helping those struggling with interest-free loans as well as grants. (+ hadith)^[10]
Source: The Islamic Perspective on Debt^[10]

3. Cancelling Interest-Bearing Debt

3.1 - Prof. Michael Hudson:
"There's a blind spot in Western civilization, not only of how civilization really began in the ancient Near East and then diffused, but also about the basic dynamic that has polarized western economies and is leading today to the western economies polarizing just in the way that Rome's empire ended in a dark age."

"The regular need to cancel interest-bearing debt was woven into the beginning of civilization... this idea of restoring economic order was based on the understanding that there's no automatic self-correcting economy, which is the myth of modern time that is promulgated by oligarchs." via COMBATE |🇵🇷

"Once you realize that, you realize that today, why is it that China is pulling ahead? Because it centralized money creation, debt creation, banking and credit as a public utility, which is how it was all over ancient society." via @upholdreality^[9]

Prof. Michael Hudson: "There's a blind spot in Western civilization, not only of how civilization really began in the ancient near East and then diffused, but also about the basic dynamic that has polarized western economies and is leading today to the western economies… There's a blind spot in Western civilization

— COMBATE |🇵🇷 (@upholdreality) March 17, 2024

How did debt begin?

4. How the Popes of the Middle Ages Introduced Debt and Interest

Prof. Michael Hudson @00:50:00 in ^[7]
Well, the Catholic Church essentially took debt out of the Lord's Prayer [the economic meaning of the word: culpa, German Schuld].
And by the 13th century, actually already by the 12th century, when you had the Roman Church waging the Crusades against the other Christians, people think the Crusades were against Islam. It was mainly against other Christians to subordinate them to Rome.

And in order to fight the Cathars in southern France, in order to fight the Germans who resisted paying tribute to Rome, in order to avoid paying, the leading Christian Church, the Eastern Orthodox Church of Constantinople, the popes hired (there were) warlords (coming in), the Normans, warlords coming into Europe. And the church, i.e. the popes made a deal beginning around 1050 (first of all, with southern Italy and Sicily), a deal that “we will recognize Robert Guiscard as the king, if you pledge fealty to become a Roman vassal state … and we'll make sure that the population supports you. But you have to kill all the Christians, and they're the real Christians who were loyal to Constantinople. And you have to kill the Byzantine areas there.”

Then in 1066, they made a deal with another warlord, William the Conqueror, that “well, we'll say that you're the king, but you have to pay us Peter's pence and tribute. And if you have to pay us tribute, you have to let us nominate the bishops, so we make sure that you're not going to keep the church and gum for yourself, but they'll pay it to us, the popes.”

And the whole 13th century was all about this fight between the local aristocracy and trying to stop the kings from borrowing money from the bankers who were sponsored by the Vatican, by Rome, to lend money to the Norman kings to fight the enemies of Rome.

And that's how the Magna Carta came into being, under King John, and reaffirmed under his son, Henry III, to limit his ability to go into debt.^[15]
The Pope, I think (it was) Pope Innocent III, excommunicated anyone who was opposing paying interest to the bankers, Italian bankers who they sponsored, to make the loans to the king to go fight in southern Italy and Sicily against the Germans, who had gained influence there.

So you had Christianity ending up worshipping debt, not its cancellation. This is not in most histories of the Crusades, but the first crusade was against Sicily, southern Italy, and England. And it was on the basis of that the Pope then was able to mobilize all massive armies to end up attacking Constantinople and what is now Yugoslavia, and take over the alternative churches to Rome.
Cont.^[11]

5. How Middle Ages Popes legitimized the charging of interest

ChatGPT
During the Middle Ages, the charging of interest, known as usury, was widely condemned by religious authorities, including the Popes. The prohibition against usury was deeply rooted in Christian theology and was based on biblical passages that condemned lending money at interest, particularly to the poor. However, over time, there were instances where Popes and other religious authorities made exceptions or found justifications for allowing interest to be charged under certain circumstances. Here are some ways in which the charging of interest was legitimized by Popes during the Middle Ages:

1. Just Price Theory: Some theologians and scholars argued that as long as interest rates were reasonable and did not exploit the borrower, they could be permissible. This idea was rooted in the concept of the "just price," which suggested that economic transactions should be fair and equitable for both parties involved.

2. Doctrine of Necessity: In cases of extreme necessity, such as during times of war or economic crisis, Popes sometimes permitted the charging of interest. This was based on the principle that lending money in such circumstances served a greater good and was necessary for the survival or stability of society.
Cont. ^[12]

6. Other Scholars on the Matter of Debt and Interest

6.1 Karl Marx
Usury centralizes money wealth where the means of production are dispersed. It does not alter the mode of production, but attaches itself firmly to it like a parasite and makes it wretched. It sucks out its blood, enervates it and compels reproduction to proceed under ever more pitiable conditions.^[4]

6.2 David Graeber
There are obvious reasons why this is a particularly important moment to reexamine the history of debt.

September 2008 saw the beginning of a financial crisis that almost brought the world economy screeching to a halt. In many ways the world economy did: ships stopped moving across the oceans and thousands lay idle or were even broken up for scrap metal.
Building cranes were dismantled, as no more buildings were being put up. Banks largely ceased making loans.

In the wake of this, there was not only public rage and bewilderment, but the beginning of an actual public conversation about the nature of debt, of money, of the financial institutions that have come to hold the fate of nations in their grip.^[6]

6.3 Yanis Varoufakis
About conventional economists blinded by their quantitative models of capitalism, which the love.
But understanding modern capitalism is something else:
There are two weird markets, they don't function like normal markets:
- the labour market (not about human creativity), but surplus value.
- the financial sphere,
Source: Varoufakis - Economics & Capitalism - YouTube^[14]

7. Socrates on the Love of Money

Retold by Prof. Michael Hudson @00:27:10 in ^[7]
Socrates was talking to an Athenian. He was complaining about the fact that he has to pay a debt to somebody.

Socrates said, "Well, you know, do you really have to repay something you borrowed?
Suppose that somebody has lent you a weapon, and you know that if you give that you need, maybe you need to fight in the army for a while or whatever reason, you have to give him back his weapon. But you know that he's a psychotic killer. You know that he's a dangerous man. Is it right to repay a debt to give the weapon back to this man who you know is going to use it to injure other people?" And the Athenian isn't really sure.

And Socrates says, "Well, let's then talk about this debt that you owe. Suppose you give the money back to the creditor, and the creditor uses this money to lend to other people, and he lends to a poor cultivator, and the cultivator ends up having to work off the debt by working on the creditor's land, not on his own land.
And suppose that the creditors get together, and they take over society, and all of a sudden they're running the government, and they're exploiting society, and it's a crisis. Is it right that you should repay these people?"

The Athenian says, "Well, you know, why would creditors act in so self-destructive a way? Can we just have really smart rulers that are going to prevent this kind of crisis?"

And Socrates says, "Well, there's something about the mentality of wealthy people that's called wealth addiction, or money love. And you have Athenian drama. Irastauphinis(?) writes plays about wealth addiction and hubris causing a downfall." And Socrates says, "It's really very much like hubris. They can't help but just wanting more and more."

□ comment:
This is the truth of the matter, and if we have never heard about it, we will assume that all people are kind and reasonable, looking for the best interest of everyone, more or less at least.

The teaching of the Quran tells us a different story: it is the love of this lower world (dunya), and it is the drive to always have more, the desire to amass riches for its own sake.

{ أَلْهَاكُمُ التَّكَاثُرُ }

{The desire to have more of the worldly gains have pre-occupied you so much (that you have neglected remembring God)}
102-1

All kinds of people can have something of this weird behaviour (hoarding), but when it is about money and the possibility to increase capital, it is something different, as it will have an impact on the whole economy, and in the end, it will make the society wretched.

What is the difference between consuming food and 'consuming' or earning money according to (not only) Socrates?^[13]