Month: March 2017

A new study claims that desertification of the Sahara may have been exacerbated by human activities such as herding. The Sahara Desert is an interesting case, in the sense that its development was a case of cattle before crops. The reason was because the highly variable rainfall and climate made a mobile way of life like herding far less risky than crops which cannot be moved and demand consistent levels of rainfall. But it seems that the needs of cattle may have altered the environment in negative ways.

BY the way, those desert herders may have been the source of much that was unique about Egyptian culture. Many of those features are still seen in African herding cultures such as Nuer and Masai today.

A new paper authored by archeologists with Seoul National University has suggested that the Sahara Desert, once green and wet, dried out as a result of the actions of ancient peoples. The spread of agriculture depleted the Sahara’s plant life and caused the region’s the shift to a desert biome, the paper claims.

Humans may have transformed the Sahara from lush paradise to barren desert (The Conversation)

Was the Sahara Desert Created by Humans? (Science News Journal)

Ancient Humans Created the Sahara Desert, Says Archaeologist (Sputnik News)

Is human sacrifice linked with hierarchy?

In almost all societies, killing within a tribe or clan has been strongly taboo; exemption is granted only to those with great authority. Anthropologists have suspected that ritual human sacrifice serves to cement power structures — that is, it signifies who sits at the top of the social hierarchy.

How human sacrifice propped up the social order (Nature)

Is our narrow definition of agriculture causing us to miss other methods of “agriculture” –of humans transforming the landscape to meet their needs in sustainable ways?

Indigenous writer Bruce Pascoe has recently published a book called Dark Emu: Black seeds, agriculture or accident? that challenges the popular perception of our Indigenous past. He argues that the economy and culture of Aboriginal and Torres Strait islander people has been ‘grossly undervalued’ for the past 200 hundred years. The early writings of white explorers and settlers are central to his argument; they described the cultivated way Indigenous people managed the land.

‘Hunter-gatherer societies forage and hunt for food and do not employ agricultural methods or build permanent dwellings,’ he writes. ‘But as I read these early journals, I came across repeated references to people building dams and wells, planting, irrigating and harvesting seed, preserving the surplus and storing it in houses, sheds or secure vessels … and manipulating the landscape.’.

Rethinking Indigenous Australia’s agricultural past (ABC)

And, related, more evidence that Amazonia was once a food forest, centered around perennials and tree crops:

“Large areas of the Amazon are less pristine than we may think,” said Hans ter Steege, a tropical ecologist at the Naturalis Biodiversity Center in the Netherlands, and an author of a paper published in Science on Thursday. “The people who lived there before Columbus left serious footprints that still persist in the composition as we see today.” He was one of more than a hundred researchers who found that domesticated tree and palm species — like cacao, cashews, the açaí palm, the Brazil nut and rubber — were five times more likely to dominate the modern Amazonian forest than nondomesticated plants.

How the Amazon’s Cashews and Cacao Point to Cultivation by the Ancients (New York Times)

Amazon forest ‘shaped by pre-Columbian indigenous peoples’ (BBC)

Evidence of agroforestry in the ancient Amazon (tywkiwdbi)

Archaeologists Have Discovered More Than 450 Large Geometrical Geoglyphs in the Amazonian Rainforest (Science News Journal)

Another example of humans transforming the landscape: An ancient oasis in China’s remote desert (BBC)

It’s built around the Turpan Water System, an underappreciated engineering marvel:

The system has wells, dams and underground canals built to store the water and control the amount of water flow. Vertical wells are dug at various points to tap into the groundwater flowing down sloping land from the source, the mountain runoff. The water is then channeled through underground canals dug from the bottom of one well to the next well and then to the desired destination, Turpan’s irrigation system. This irrigation system of special connected wells has been claimed to originate in Iran (e.g., the qanat system), to have originated indigenously, or to have been invented in other parts of China. Both historical and archaeological research convincingly point to the origins of this technology as arriving from more western regions along with indigenous innovations.

The Irish potato famine was caused by wealthy landlords who prized profit over people — and thousands starved (Raw Story). It was caused by replacing communal structures with capitalist markets, but we can’t acknowledge that.

The route that eventually became the Silk Road developed based on the movement of nomadic herders:

Our model shows that long-term strategies of mobility by highland nomadic herders structured enduring routes for seasonal migrations to summer pastures, which correspond significantly with the evolving geography of ‘Silk Road’ interaction across Asia’s mountains,” said Michael Frachetti, lead author of the study and an associate professor of anthropology in Arts & Sciences at Washington University.

Silk Road evolved as ‘grass-routes’ movement (Phys.org)

Eurocentric history focuses on Greece as the birthplace of democracy, but cultures in the Americas may have had a more democratic arrangement as well:

…Tlaxcallan is one of several premodern societies around the world that archaeologists believe were organized collectively, where rulers shared power and commoners had a say in the government that presided over their lives. These societies were not necessarily full democracies in which citizens cast votes, but they were radically different from the autocratic, inherited rule found—or assumed—in most early societies.

It wasn’t just Greece: Archaeologists find early democratic societies in the Americas (Science)

An anthropologist considers how humans invented numbers:

Numbers are this really simple invention. These words that reify concepts are a cognitive tool. But it’s so amazing to think about what they enable as a species. Without them we seem to struggle differentiating seven from eight consistently; with them we can send someone to the moon. All that can be traced back to someone, somewhere saying, “Hey, I have a hand of things here.” Without that first step, or without similar first steps made to invent numbers, you don’t get to those other steps. A lot of people think because math is so elaborate, and there are numbers that exist, they think these things are something you come to recognize. I don’t care how smart you are, if you don’t have numbers you’re not going to make that realization. In most cases the invention probably started with this ephemeral realization [that you have five fingers on one hand], but if they don’t ascribe a word to it, that realization just passes very quickly and dies with them. It doesn’t get passed on to the next generation.

How Humans Invented Numbers—And How Numbers Reshaped Our World (Smithsonian)

Was the apprenticeship system and the skills it inculcated critical in the rise of Europe and the Industrial Revolution?

Before the Industrial Revolution, almost all useful knowledge was tacit. The main mechanism through which tacit skills were transmitted across generations was apprenticeship, a relationship linking a skilled adult to a youngster whom he taught the trade. Apprentices spent most of their waking hours in the master’s workshop, where they learned from the master and more experienced apprentices and journeymen. As apprentices spent time in the shop, they gradually acquired the skills of the master, often through imitation and guided learning-by-doing…What we argue is that the institutions governing the intergenerational transmission mechanism were of central importance to the dissemination of best-practice techniques. The nature of the apprenticeship system based on personal contacts and mostly local networks was a central factor in the closing of gaps between best-practice and average-practice techniques. We argue that apprenticeship institutions in Europe led to faster dissemination of best-practice technical knowledge and contributed, ultimately, to Europe’s technological primacy.

Apprenticeship and the rise of Europe (Naked Capitalism)

Reddit consideration of why the continent of Africa is impoverished today: ELI5: Why is Africa, as a whole, such an impoverished continent?

Rather than hunter-gatherers being “old by age 30”, it seems like that is a more accurate description of people in modern, industrial societies:

The healthiest hearts in the world have been found in the Tsimane people in the forests of Bolivia, say researchers. Barely any Tsimane had signs of clogged up arteries – even well into old age – a study in the Lancet showed. “It’s an incredible population” with radically different diets and ways of living, said the researchers. They admit the rest of the world cannot revert to a hunter-gathering and early farming existence, but said there were lessons for all of us.

‘Healthiest hearts in the world’ found (BBC)

And, related, Anxious, depressed, distracted — what if the cure is just outside? (Grist)

A geomagnetic spike hit the ancient kingdom of Judah in ancient times. If this were to happen again today, the electrical grid could be a smoking ruin.

Earth’s geomagnetic field wraps the planet in a protective layer of energy, shielding us from solar winds and high-energy particles from space. But it’s also poorly understood, subject to weird reversals, polar wandering, and rapidly changing intensities. Now a chance discovery from an archaeological dig near Jerusalem has given scientists a glimpse of how intense the magnetic field can get—and the news isn’t good for a world that depends on electrical grids and high-tech devices.

Astonishing geomagnetic spike hit the ancient kingdom of Judah (ars Technica)

Sometimes it takes new technology a while to catch on:

By 1907, only 8 percent of Americans lived in homes served by electricity nationwide. It was not dispersed super swiftly because the infrastructure had to be built. Once that was in place, the question was whether you could you afford it. For every new technology, people have to be persuaded that it’s important. I think the thing that made them really want electricity was the radio, which didn’t become ubiquitous until the 1920s and ‘30s.

How the war of the currents brought power to cities (CityLab)

And also: How the world’s first cities got started (CityLab). Similar thesis to what I wrote about the origins of cities.

Before there was Jesus, there was Apollonius of Tyana.

Climate change and the rise and fall of civilizations (NASA)

Is the idea that all scientific inquiry in the Middle Ages was squashed by the all-powerful Catholic Church just a myth that need to be laid to rest?:

About once every 3-4 months on forums like RichardDawkins.net we get some discussion where someone invokes the old “Conflict Thesis”. That evolves into the usual ritual kicking of the Middle Ages as a benighted intellectual wasteland where humanity was shackled to superstition and oppressed by cackling minions of the Evil Old Catholic Church. The hoary standards are brought out on cue. Giordiano Bruno is presented as a wise and noble martyr for science instead of the irritating mystical New Age kook he actually was. Hypatia is presented as another such martyr and the mythical Christian destruction of the Great Library of Alexandria is spoken of in hushed tones, despite both these ideas being totally untrue. The Galileo Affair is ushered in as evidence of a brave scientist standing up to the unscientific obscurantism of the Church, despite that case being as much about science as it was about Scripture.

It’s not hard to kick this nonsense to pieces, especially since the people presenting it know next to nothing about history and have simply picked up these strange ideas from websites and popular books. The assertions collapse as soon as you hit them with hard evidence. I love to totally stump these propagators by asking them to present me with the name of one – just one – scientist burned, persecuted, or oppressed for their science in the Middle Ages. They always fail to come up with any. They usually try to crowbar Galileo back into the Middle Ages, which is amusing considering he was a contemporary of Descartes. When asked why they have failed to produce any such scientists given the Church was apparently so busily oppressing them, they often resort to claiming that the Evil Old Church did such a good job of oppression that everyone was too scared to practice science. By the time I produce a laundry list of Medieval scientists – like Albertus Magnus, Robert Grosseteste, Roger Bacon, John Peckham, Duns Scotus, Thomas Bradwardine, Walter Burley, William Heytesbury, Richard Swineshead, John Dumbleton, Richard of Wallingford, Nicholas Oresme, Jean Buridan and Nicholas of Cusa – and ask why these men were happily pursuing science in the Middle Ages without molestation from the Church, my opponents usually scratch their heads in puzzlement at what just went wrong.

The Dark Age Myth: An Atheist Reviews “God’s Philosophers” (Strange Notions)

Is it possible that ancient people saw the world very differently than we do?:

Homer’s descriptions of color in The Iliad and The Odyssey, taken literally, paint an almost psychedelic landscape: in addition to the sea, sheep were also the color of wine; honey was green, as were the fear-filled faces of men; and the sky is often described as bronze… Not only was Homer’s palette limited to only five colors (metallics, black, white, yellow-green, and red), but a prominent philosopher even centuries later, Empedocles, believed that all color was limited to four categories: white/light, dark/black, red, and yellow…

It turns out that the appearance of color in ancient texts, while also reasonably paralleling the frequency of colors that can be found in nature (blue and purple are very rare, red is quite frequent, and greens and browns are everywhere), tends to happen in the same sequence regardless of civilization: red : ochre : green : violet : yellow—and eventually, at least with the Egyptians and Byzantines, blue.

Blue certainly existed in the world, even if it was rare, and the Greeks must have stumbled across it occasionally even if they didn’t name it. But the thing is, if we don’t have a word for something, it turns out that to our perception—which becomes our construction of the universe—it might as well not exist. Specifically, neuroscience suggests that it might not just be “good or bad” for which “thinking makes it so,” but quite a lot of what we perceive.

The Wine-Dark Sea: Color and Perception in the Ancient World (Clarke’s World)

And, related, non-Western “traditional” peoples’ perception is different than our own:

One explanation for their astonishing focus may come from the cattle rearing itself. Identifying each cow’s markings was apparently essential for their daily life – and this practice may perhaps train the eye with a focus and attention that was lacking in all modern societies. “I think that does come from their traditional lives – the powers to concentrate,” says Davidoff. But it could also be that modern life itself makes us more easily distracted by our surroundings. And it is for this reason that Opuwo is so interesting, as younger generations slowly migrate to the shanty villages on the edge of the small town…

To discover how this move might influence the Himba’s psychology, Davidoff’s team compared Himba migrants to the small town, with those still living the traditional lifestyle. As they had expected, the Himba who had spent years living on Opuwo were less focused on the local details than those living in the countryside. But you didn’t need to have spent your whole life in the town for it to have an effect; the team found that even very short day trips to Opuwo seemed to have had a lasting impact their perception, making them less focused on differences in the local details (and more conscious of the overall shape) when comparing two abstract figures, for instance. Needless to say, the influence was much greater for those who lived in the town – but it was still present even for the Himba who had only visited a couple of times. “There does seem to be a ‘dose effect’ – the more of it you have, the greater the effect becomes,” says Davidoff.

The astonishing focus of Namibia’s Nomads (BBC)

Real Solutions

In the Netherlands, an elder care facility also acts as a dorm, bringing old and young people together to their mutual benefit: The Nursing Home That’s Also a Dorm (CityLab)

Related: The Dutch prison crisis: A shortage of prisoners (BBC) Compare to the U.S.

Is depression an evolved response that actually has a beneficial purpose?

Some psychologists, however, have argued that depression is not a dysfunction at all, but an evolved mechanism designed to achieve a particular set of benefits. I’ve certainly considered whether it’s done that for me, both in high school and later in life. If they’re right, it means that our thinking about depression needs an intervention too.

Does depression have an evolutionary purpose (Nautilus)

Planners hope more benches in urban centres will help build friendlier cities: ‘Street seats’ aim to revolutionise cities through sitting (BBC)

Forget shorter showers; individual solutions won’t save the planet:

As narrator Jordan Brown says, no matter what environmental problem you consider, whether it’s the water crisis, the waste crisis, the emissions crisis, you name it, our personal actions account for very little of what’s going wrong. The vast majority of the problems can be traced back to the industrial economy, which consumes most of the water, generates most of the plastic waste, creates the most emissions, and so on and so forth.

What we do as individuals, he argues, does almost nothing to change the big picture. For example, municipal household waste accounts for only 3 percent of waste in the United States, so what’s the point of encouraging people to go zero waste at home?

Brown identifies four problems with perceiving simple living as a political act.
1) It is based on the notion that humans inevitably harm their land base. This fails to acknowledge that humans can help the Earth.
2) It incorrectly assigns blame to the individual, instead of targeting those who wield power within the industrial system – and the system itself.
3) It accepts capitalism’s redefinition of us as consumers, rather than citizens. We reduce our potential forms of resistance to ‘consuming vs. not consuming,’ despite there being far broader resistance tactics available to us.
4) The endpoint of logic behind simple living as a political act is suicide. If every act within our economy is destructive, and we want to stop this destruction, then the planet would be better off with us dead.
Personal solutions can’t save the planet

Personal solutions can’t save the planet (Treehugger)

Spain’s abandoned coal belt is trying to survive through innovation rather than going back to the past:

…Javi Fernandez’s small house is surrounded by edible plants. Among traditional winter crops grown in this area, like verza, a kind of cabbage, there’s also mustard, Jerusalem artichokes, and shiitake mushrooms. It’s a small patch of bounty amid miles of empty, rolling hills.

Rather than study engineering to work in the coal mines like both his father and grandfather, Mr Fernandez studied agriculture in Cuba. “I couldn’t afford to go to a paying university so I studied for free at the ISCA University, in San Jose de las Lajas,” he beams, digging through the 400 sq m (4,300 sq ft) of artichokes he has planted.

Will Spain’s coal belt survive through online barter? (BBC)

Paris compost urinals open near Gare de Lyon station (BBC)

How food waste can feed the hungry, train the jobless and fight loneliness too (Treehugger)

The food waste fighter (BBC)

On a chilly summer’s night in the centre of Copenhagen, a crowd gathers around the entrance of a restaurant called Dalle Valle. It’s 22:30 and the dinner buffet is winding up and the kitchens are about to close. But these people, mostly in their 20s and 30s, are here for the food that the diners inside didn’t want.

Dalle Valle is one of hundreds of restaurants and cafes listed in an app called Too Good To Go, which lets you order takeaway food that would otherwise be thrown away, for knock-down prices. It’s an example of many social initiatives set up in the last few years to address the growing problem of food waste. And in Denmark, they are leading the world.

The country where unwanted food is selling out (BBC)

Our Society Doesn’t Work

Spending large amounts of time indoors under artificial light and staring at computer screens has helped produce a “myopia epidemic” with as many as 90 per cent of people in some parts of the world needing glasses. Industrial food production has also turned primates’ taste for sugar — which evolved to persuade us to gorge on healthy fruit when it was ripe — into one of the main causes of the soaring rates of obesity in the Western world. And our sense of smell is under attack from air pollution, producing an array of different effects, including depression and anxiety.

‘Mismatch’ between the way our senses evolved and modern world is making us ill, experts warn (Independent)

The Basic Psychological Structure of Our Society Does Not Work (Ian Welsh)

Is the dark really making me sad? Writing this from Milwaukee in March, most definitely, yes.

Old, but relevant: Is Civilization A Bad Idea? (NPR)

What does it mean to be human? (Mosaic Science) Related: Neanderthals may have medicated with penicillin and painkillers:

Neanderthals living in prehistoric Belgium enjoyed their meat – but the Neanderthals who lived in what is now northern Spain seem to have survived on an almost exclusively vegetarian diet. This is according to new DNA analysis that also suggests sick Neanderthals could self-medicate with naturally occurring painkillers and antibiotics, and that they shared mouth microbiomes with humans – perhaps exchanged by kissing.

Neanderthals may have medicated with penicillin and painkillers (New Scientist)

Architecture

A beautiful rammed earth house in China based on vernacular forms: Modern rammed earth home echoes region’s natural cave dwellings (Treehugger) Also, this Australian home uses tent fabrics to meld inside and outside: Modern Australian tent house seamlessly brings nature inside (Treehugger)

Architecture’s forgotten drawing: the section:

With their Manual of Section, the three founding partners of LTL architects engage with section as an essential tool of architectural design, and let’s admit it, this reading might change your mind on the topic. For the co-authors, “thinking and designing through section requires the building of a discourse about section, recognizing it as a site of intervention.” Perhaps, indeed, we need to understand the capabilities of section drawings both to use them more efficiently and to enjoy doing so.

Studying the “Manual of Section”: Architecture’s Most Intriguing Drawing (ArchDaily)

Interesting article on digital techniques and traditional architecture, probably of interest mainly to architects/engineers: Modern Design from Historical Perspective (AUGI)

Could these techniques give a rebirth to more traditional forms/ornamentation and away from arbitrary ad-hoc form-finding by “starchitects” held together by space-age technology? Related:

Professor Alan Short of the University of Cambridge has published a book advocating for the revival of 19th-century architectural ideas to address the crippling energy use of modern skyscrapers. The Recovery of Natural Environments in Architecture proposes an end to the architectural fetish for glass, steel, and air conditioning, instead drawing inspiration from forgotten techniques in naturally ventilated buildings of the 1800s. The book is a culmination of 30 years’ research and design by Prof. Short and his colleagues at the University of Cambridge.

In his book, Prof. Short highlights a developed, sophisticated science of natural ventilation used in the 19th-century, exemplified by the first Johns Hopkins Hospital in Baltimore. After three years digitally modeling the hospital, Prof. Short and his team noted that ventilation performance in the building was equivalent to a modern-day computer-controlled operating theater. During the 19th-century, public anxiety over toxic air led to the development of public buildings devoted to exceptional air quality, a mindset which Prof. Short argues has been lost in the computer-controlled ventilation of modern skyscrapers.

New Book Calls for an End to Our Fetish for Conditioned Skyscrapers (archdaily)

A gallery of round architectural plans. Related, Round runways could save a lot of land, reduce fuel consumption and cut noise (Treehugger)

One of Karl Polanyi’s central insights concerns the existence of “fictitious commodities,” which are land, labor and capital.

Land and labor are things that, prior to the Great Transformation, were part-and-parcel of the fabric of society and not merely chattel to be bought and sold in impersonal markets. Industrial capitalism determined these should be distributed by markets rather than by traditional means, and central governments proceeded to create these markets by destroying alternative social structures. Capital was deliberately brought about through deliberate state action by monetizing these items, establishing markets for them, and creating centralized financial systems and regulations to facilitate these markets.

The problem is that, as Polanyi points out, these things are decidedly NOT commodities. They are the very fabric of society itself. They are “fictitious” because they are not objects produced in order to be bought and sold—they have no basis in production or sale other than their ability to be sold on the market. Unlike true commodities, they cannot go unsold; absent some other subsidy, workers must work in order to survive, and everybody needs land to live on. Land, for example, is theoretically bought and sold in “free” markets, yet the supply of this “commodity” is inherently limited–we cannot create more of it.

This also demonstrates the impossibility of having a “pure” market society. Markets are subject to all sort of irrationality such as panics and bubbles, despite the fact that economics textbooks invariably depict markets as idealized systems automatically heading towards equilibrium, even though such things exist nowhere in the actual world we inhabit.

Ironically, even though labor is described as a commodity sold in the “labor market,” conventional (neoclassical) economists insist that supply and demand play no role whatsoever in these markets! So, for example, increasing the supply of workers by, say, massive amounts immigrant labor, is said to have no effect whatsoever on domestic wages. Neither does the addition of millions of additional workers via globalization. Rather, according to economists, in this “market” everyone simply gets what they produce, no more and no less!

Earlier, I cited arguments pointing out that what made social democracies such as Northern Europe much more functional societies was not socialism per se, but the decommodification of land and labor. Government policies decouple both of these things from existing in “pure” markets to some extent, which leads to better social outcomes:

Which political system does happiness economics support? (Aeon)

But the point I want to make is that land, labor and capital are not the only fictitious commodities. These were the major ones in 1944 when Polanyi wrote his book. But, if he were writing today, I’m sure he would include three other fictitious commodities that are having a massive impact on our economy today.

The three other fictitious commodities are: HEALTH CARE, EDUCATION, and NATURAL RESOURCES.

Several things tie these items together. For one, your need for these “commodities” has nothing to do with your ability to pay. Your desire for these commodities has nothing to do with your preferences. Your information about these commodities and options for purchasing them are highly restricted and circumscribed. Also, you cannot choose NOT to purchase these commodities, at least not without severe and deleterious consequences to your health and income prospects. In other words, consumer choice does not enter into the choice whether or not to buy them. As such, it makes no sense to treat these as true commodities distributed in “free and open” price-fixing markets. Yet, for reasons of capitalist ideology, we must consistently pretend that they can be and are so delivered.

1.) Health care. That this is a “fictitious commodity” should be obvious to anyone with half a brain. Health care is not, nor can it be, a “product” produced for sale in a market and distributed by impersonal forces of supply and demand. The idea of using markets to distribute health care is so bizarre as to beggar belief.

In fact, this fact is obvious to the rest of the world outside of the United States, so, it is a strange thing to have to even argue against health care being a market commodity, because only Americans believe it. Recall Polanyi’s description of a price-fixing market:

“a site, physically present or available goods, a supply crowd, a demand crowd, custom or law and equivalencies…Whenever the market elements combine to form a supply-demand-price mechanism, we speak of price-making markets…”

That doesn’t sound much like the health care market does it? No one wakes up in the morning one day and decides to go out and buy some health care. They come down with a fucking disease! They need treatment, sometimes urgently. What they have wrong with them has nothing to do with their capacity to pay. They have no expertise or knowledge with which to evaluate the health care “product” (much less the “perfect knowledge” posited by neoclassical economic theory). They are dependent on outside experts. There may even be traumatic injury involved such as a car accident (and there frequently is). Are victims of a car crash supposed to be “rational consumers of health care services?”

Also, everyone has a physical body, so everyone needs health care. On the other hand, most consumer goods are voluntary purchases. You cannot choose not to need health care; whether you need it or not has nothing to do with your actions. Yes, you can take care of yourself, but even Olympic athletes have health care issues that require treatment, from asthma to appendicitis. In traditional price-fixing markets, purchasing the commodity, from a Persian rug to a silk scarf, was a choice, not a requirement to go on living.

Advertising for hospitals and doctors abounds, and yet most people have extremely limited choices for where they can go to get treatment and which doctors they can visit (e.g. in-network and out-of-network). How can anyone honestly claim that “competition” in this system makes it more efficient? Getting any sort of clear pricing for medical services is next to impossible; you only know how much it costs when the (enormous) bill shows up in your mailbox. And the recent highly-publicized hiking of drug prices by predatory capitalists surely proves that supply and demand has little to do with drug pricing. After all, it’s not like you have much of a “choice” whether or not to purchase these products, especially if no generic is available. It’s more like a hostage racket than a “free” market.

Even with the completely “transparent” pricing desired by libertarians, it’s difficult to believe that the “invisible hand” left alone will perfectly align adequate supply with demand, especially with an aging population. Typically you need to purchase most health care at the end of life when your purchasing power is at its low ebb. Even with “Chemo-While-U-Wait” shops on every streetcorner as envisioned by libertarians, there is a price below which health care services will not fall. Should we just deny them to people then? Ron Paul acolytes may applaud this idea, but most non-sociopaths will probably not simply accept sitting by helplessly and watching grandma slowly die from cancer because she cannot afford to pay the corner clinic on her limited income.

Medical costs are currently a significant source of personal bankruptcy. It’s difficult to imagine people voluntarily bankrupting themselves through voluntarily purchases of any given commodity, even automobiles. That should be another indication that health care is no ordinary “product.”

Moreover, what you typically purchase is not even health care, but health insurance, which is redistributive by its very nature. And under the current system in the U.S., you are forced by law to buy this “product.” I wonder how that comports with the ideology of “free” markets. A single pool of people is by nature more efficient than multiple competing ones, which is why all other counties use a single-payer health system as their base.

It seems like we just need to constantly maintain this fiction that there is even a market in healthcare at all. In fact, we already intervene in this market all over the place, from health care for veterans to subsidies for the poor. The supposed “free” market in health care is entirely a creation of government regulations, absent which there would not even be a “market” for health care at all.

I need not belabor this point. Here is an excellent summary of many of the reasons why health care is not a commodity:

Health – A Market Like No Other (Whistling in the Wind)

2.) Education. In the United States, education has become a commodity to be sold by educational institutions and bought by “consumers,” typically by going heavily into debt. Even supposedly “not-for-profit” institutions have become essentially predatory money-making operations. And they are complemented by a vast for-profit education industry expressly designed to prey upon the poor and the desperate who are trying to further their skills to compete in an increasingly winner-take-all global economy.

Now, like labor markets described above, education has another quirk that makes them different from markets determined exclusively by supply and demand. What we’ve seen is this: as demand for the product has increased exponentially, the price of the “commodity” has not fallen, but has risen into the stratosphere at multiple times the rate of inflation! And it shows no signs of slowing down.

In modern industrial economies, an educated workforce is recognized as a social necessity by most people. At one point, even basic literacy and numeracy were rare in the population when farming was still the most common type of labor. To that end, public provisioning of education and universal access were once recognized as the foundation for any prosperous society beginning in the nineteenth century (and earlier in some places). Restricting education only to the children of rich elites was recognized as obviously contrary to American ideals of meritocratic individualism, not to mention economic suicide.

Sometime in the post-war period, this changed, especially in the United States. Employers started using collage as a lazy weeding program for new hires, and a Bachelor’s degree became simply “the new high school diploma.” At the same time, this was accompanied not by an expansion of support for post-secondary education, but a withdrawal of support and government disinvestment in educational systems across the board. Under neoliberalism, the burden of paying for higher education was placed on the workers themselves, and college was transformed into a (highly risky) “investment” in ones future which was required to produce a positive return (ROI). Colleges began to compete against one another in markets, offering luxurious amenities and spending enormous sums to hire “celebrity” professors, as well as purchasing advertising which did not help educate a single student.

Because you need to go to school for your labor to be worth something anymore, this “commodity” is not really a choice, but a requirement. So, for example, if you want to be an engineer, well then, you have to get an engineering degree. Only certain institutions are even allowed to offer this “product” (the accredited degree). These institutions are widely separated in geographical space—they are only located in certain places, meaning access is highly restrictive.

Furthermore, your desire and aptitude to be an engineer has nothing do with how much money you happen to have in the bank. That is, you cannot choose NOT to purchase this product and still be an engineer. Rather than a single product at the point-of-sale, a degree requires you to labor for at least four years to acquire these skills (making it very different than, say, buying a house), and this is typically BEFORE you have any significant income! In fact, you need to purchase this “product” in order to the HAVE any significant income! Often times, the “price” (i.e. tuition) rises dramatically during those four years, and there is nothing you can do about it. And colleges can create sudden and arbitrary rules to make you pay more for the “product” such as requiring more credits for no valid reason other than the fact that they can (this actually happened at my architecture school–they upped the credit requirements for graduation from 48 to 60 simply because they could). What other kind of “commodity” is that true of? Even land and houses have a one-time negotiated purchase price which is known to all parties at the time of sale!

And what else has the “market-centric” approach to education led to in the United States? One effect is schools building grandiose architectural follies designed by brand-name “starchitects” in order to “compete” with other institutions simply to attract a small slice of high-income tuition whales, many of whom come from overseas (even while Americans have less and less access to their own educational system). Americans happily train the world’s rich kids but abandon their own people to the wolves. And then there are the athletic departments taking over college campuses, leading to everything from millionaire sports coaches to multi-million-dollar stadiums, all paid for by heavily-indebted tuition donkeys. This is even while most classes are being taught by non-unionized adjuncts who are so poorly paid that they often must rely upon public assistance. Finally, there’s the administrative bloat and college presidents/provosts who get free palatial homes to live in, salaries in the high six/low seven-figures, and gilded pensions and benefits. How do any of these things help create and maintain an educated workforce?

Do we want only the children of rich parents to be able to be engineers? Or doctors? Or lawyers? Or architects? Or accountants? How is that consistent with our ideas of meritocracy? Right-wingers and conservatives like to retort that truly intelligent and talented people will always somehow find a way have their education paid for through grants/scholarships. etc.That is, money is not a barrier to educational access. Arbitrary and random “gifts” of money for the lucky few help them to uphold this argument, allowing them to maintain their just-world belief systems.

Two points about that fact: first, it is obviously false. But, even if it were true, it merely reinforces the point that education should not be a market commodity!

The fact is that these institutions are really tollbooths to the few remaining professions that pay a living wage anymore. As such, they are able to charge whatever they want, and there will be people willing to pay it. And that means that the idea of a market mechanism being applicable here is just as ridiculous and outrageous as with health care! Education is not a “product”; it is vocational training, and most societies traditionally have had other effective ways to train the skilled labor they needed which did not rely on predatory markets. Many still do today. In reality, higher education in the U.S. seems less like a marketable product and more like a twenty-first century version of indentured servitude. And educational support is under assault worldwide.

3. Natural Resources. Obviously, forests, rivers, farmland and mineral deposits–to name just a few examples–are not produced expressly for sale. They are simply there. Neoliberal economics wants to recast all of nature as “ecosystem services” to be bought and sold in price-fixing markets for ideological reasons. In fact, there are even efforts to create highly artificial markets in carbon via “cap and trade” schemes. Under the Neoliberal ideology, only markets–and not, for example, common resource ownership or rationing–can adequately deal with these scarce natural resources.

[Payments for ecological/environmental services] is a form of commodification, of creating new things out of nature which can be sold. The commodities created thus are ‘fictitious commodities’. Real commodities are discrete entities (coffee beans, timber or diamonds), that are produced to be sold. In contrast commodities like land, money and labour are fictitious, they are not produced specifically to be sold, and they do not physically change hands when sold. What are exchanged are title deeds (with respect to land) or agreements to access time (with respect to labour) in return for notes (bank or promissory) which promise to pay the bearer funds, or simply electronic numbers in bank accounts (with respect to money). Markets in such commodities require complicated social and political exercises to subdivide landscapes into titled parcels, create the banking and state apparatus that allows money to be trusted, and create labour pools and skills.

The enthusiasts for PES recognize the social engineering that fictitious commodities require determining how much carbon, or water, is created by particular land covers, who can own them and how they might be exchanged requires the construction of complex apparatuses for measuring, valuing and titling…They require a demand for the new products to be created. With such commodities created, and with markets established for their exchange and circulation, considerable (trillion dollar) opportunities open up. Without the investments required socially and politically to free PES’ fictitious commodities from their social and ecological contexts, huge potential markets are lost.

…The creation of fictitious commodities of land and labour does not alter the fact that the places and people who provide them still have an entirely separate existence, beyond their commodity form.This means that what markets do to land and labour can have profound social and ecological consequences. Markets may demand homes or nature reserves be surrendered for a mine but the result will be painful. Labour may be laid off in a recession, but the psychological consequences to individuals and families are immense. As Polanyi observed, ‘to allow the market mechanism to be sole director of the fate of human beings and their natural environment… would result in the demolition of society’. So it may be with the carbon, water and other services promoted in PES. The commodities thus created and exchanged cannot be separated from their social and ecological contexts. Forests may only be valued for their carbon, but they cannot be reduced only to their carbon. Critics note that markets have a tendency to forget the social and ecological contexts of their commodities. The consequences of such commodity fetishism are potentially considerable for PES. How markets behave with respect to the commodities they peddle depends very much on the social structures in which they are embedded. This is why the performance of actually existing PES schemes matters so much.

Ecosystem services and fictitious commodities (PDF)

What’s more, much like land, we cannot increase the production of these commodities. Renewable resources like forests can theoretically be regenerated, but not in the time frame that is acceptable to the quarterly balance sheets of finance capitalism. The ultimate stock of non-renewable resources such as petroleum and minerals can only go in one direction—down. This is deceptive, since price-fixing markets only rely on the flow of that particular resource at a specific point in time. The price of oil is determined not by how much oil there is (the stock), but how much is available to the market right now (the flow). In fact, for many such commodities, high prices provide an incentive to increase the extraction of the non-renewable resource, ensuring that it is drawn down even faster. The ultimate amount of the resource has no bearing until it is exhausted (e.g. rhino horns and elephant tusks).

The Markets’ Greatest Failure (Whistling in the Wind)

The consequences for the natural world and the ecosystem are devastating. You cannot have a market without a society, and yet market mechanisms are literally destroying the natural resources without which the human life-support system could not exist. Yet, in the past, common-pool resources were often collectively managed and highly regulated. However, free-market capitalist ideology forbids us from even considering these options.

Conclusion

These other three “fictitious commodities”—especially health care and education—are more relevant than ever before in our current economic situation, because it is these things which are currently destroying the American quality of life. By contrast, actual commodities are cheaper than ever before! In fact, actual commodities—not fictitious ones—have become so cheap as to be practically free. Dollar Stores and Wal-marts are filled with cheap, superabundant (albeit shoddy) goods. Even high-tech electronics can be had at astonishingly low prices. Technology that would be considered miraculous even a decade ago can be purchased with the equivalent of a few days’ salary. Food is also remarkably cheap today, although arguably, like durable goods, much of it is of inferior quality. Still, even quality foods can be purchased for what have historically been low prices, if one knows where to look.

Many electronics-based products have declined in price. According to Yahoo finance the following reductions have occurred: televisions (down 77.9 percent); computers (down 88.3 percent); audio equipment (down 39.3 percent); and videocassettes, video discs and other media, including rentals (down 20.4 percent). Over the last decade they also document a 6.6 percent drop in the price of new cars and trucks, 44.4 percent drop in the price of toys, 11 percent drop in clothes, and the cost of a timepiece fell 6.2 percent. Reducing prices result in individuals having greater income to spend on other items, which from a purely consumption standpoint increases their welfare. In these cases the “magic of the market” actually works to create greater consumption and prosperity. Polanyi conceded that even though commodification of labor imposed severe cultural and social costs to workers and their families, it also contributed to economic “improvement” and growth.

Escaping the Polanyi matrix: the impact of fictitious commodities: money, land, and labor on consumer welfare (PDF)

In fact, many goods need to be made artificially scarce in order to be turned into marketable commodities. I’m referring to what economists like to call “non-rival, non-excludable” goods—easily reproducible technologies that can be duplicated and distributed at no marginal cost, such as software, books, movies and music. And it is these “commodities” which are forming an ever-larger and more important share of our economy! They can only be turned into commodities at the cost of massive central-state enforcement; for example, spying on peoples’ home computers and draconian copyright legislation. Many such goods are already provided “free-of-charge” (e.g. Google and Facebook) but paid for by highly intrusive and wasteful advertising that people are constantly trying to avoid (adblockers, etc.), or by massive data gathering which violates peoples’ privacy with the end-goal of even more intrusive marketing tactics to manipulate us (and potentially political repression to boot).

In fact, it is the inexpensiveness of such items that leads defenders of the status quo to insist that everything is better than ever. Everybody has cell phones! You can look up anything you want on Google! Even the poor are fat!!! I’m sure you’ve heard these arguments before.

But this ignores the crux of the problem—pretending that the fictitious commodities should be distributed by markets in the first place. More and more of our economy consists of these fictitious commodities. In fact, it’s so common we even have a term for it–the “Eds and Meds” economy. Health care and education employ and ever-greater share of our workforce. Add in digital goods which are made artificially scarce, and it appears that much of our twenty-first century economy is not centered around the production of actual goods and servies at all (which are practically free), but instead forcing these fictitious commodities to somehow behave like actual commodities. To this end, we are creating artificial “pretend” markets which are highly inefficient and easily gamed just to maintain this fiction!

The real problems Americans face today are with these fictitious commodities. High housing costs are destroying Americans’ budgets. The costs of living in virtually any urban areas are simply unaffordable given what salaries are. Education costs have turned us into debt serfs. Millions of Americans have inadequate health care, and many people are literally dying because of it. Drug costs are eating into Americans’ paychecks. And overall jobs are going away thanks to automation and outsourcing, preventing many Americans from even earning any salary by selling their labor—workforce participation continues to decline with every passing year.

Low-income Americans can no longer afford rent, food, and transportation (VOX)

In order to solve the fundamental problems with our economy, we need to come to terms with these fictitious commodities. The first step might be to acknowledge that they are fictitious commodities in the first place. One aspect of the problem, I would argue, is that we are wedded to market mechanisms when we should ideally be moving beyond the market. Too bad the “science” of economics won’t let us even consider this. This means that we need to look elsewhere for answers.

I hope you enjoyed my summaries of the ISCANEE volumes edited by Michael Hudson.  I apologize for the length of those posts. These are essentially the “long” versions; the “rough draft'” i.e. summaries for my own use. If I were to use them in a book chapter, for example, I would summarize and condense a lot of the material, with much shorter citations. By the way, that’s true of a lot of the stuff on this blog. Of course, there’s far more material in these books than I can reasonably summarize, but I tried to hit the most notable points and the most interesting ideas.

Here’s Wikipedia’s summary on Michael Hudson’s biography page:

In 1984, Hudson joined Harvard’s archaeology faculty at the Peabody Museum as a research fellow in Babylonian economics. A decade later, he was a founding member of ISCANEE (International Scholars Conference on Ancient Near Eastern Economies), an international group of Assyriologists and archaeologists that has published a series of colloquia analyzing the economic origins of civilization. This group has become the successor to Karl Polanyi’s anthropological and historical group of a half-century ago. Four volumes co-edited by Hudson have appeared so far, dealing with privatization, urbanization and land use, the origins of money, accounting, debt, and clean slates in the Ancient Near East (a fifth volume, on the evolution of free labor, is in progress)(This is now out-CH). This new direction in research is now known as the New Economic Archaeology.

I don’t think I’m going to review the other two volumes in the series. There is one on the details of the accounting techniques which were developed in Babylonia: Creating Economic Order: Record-keeping Standardization and the Development of Accounting in the Ancient Near East. I think that’s been covered in enough detail in the other volumes. We don’t need to get into the nitty-gritty of how they did it.

The other remaining book is essentially the “main course” in the series: Debt and Economic Renewal in the Ancient Near East. From my understanding, the first two books–on privatization and urbanization, were mainly about setting the groundwork for this volume. After that volume was published, additional volumes on accounting and labor in the ancient world were published to round out the picture (with the one on labor being the last and most recent book released).

However, I think Hudson’s work on debt cancellation is pretty well known by most people at this point (at least, the people likely to read this blog), so I don’t know if the book would shed any further light on this topic. I think the basics are quite well-known: debt grows faster than the ability to repay; ancient societies recognized this as a threat to the stability of their societies, so they implemented regular debt cancellations including the Jubilee Year described in the Bible. Then, when debt and interest-bearing loans came to the West, the debt cancellations were forgotten, leading the social disintegration in Greece and Rome. Those societies reconfigured themselves around money economies and held debt claims sacrosanct. Eventually, creditor oligarchies led to slavery, and, later, the disintegration of the Roman empire, serfdom, and the Middle Ages.

So, in lieu of any more reviews, I’ll just link to a recent talk by Hudson himself describing the inception of the books and their conclusions: If We Don’t Solve The Problem Of Economic Polarization, We’re Going To Go Into Another Dark Age. With that we’ll conclude this economic history phase for now. Some highlights:

The rulers had what we would call an economic model. They realized that every economy tended to become unstable as a result of compound interest. We have the training tablets that they trained scribal students with, around 1800 or 1900 BC. They had to calculate: How long does it take debt to double its size, at what we’d call 20% interest? The answer is 5 years. How does long it take to multiply four-fold? The answer is 10 years. How much to multiply 64 times? The answer is 30 years. Well you can imagine how fast the debts grew.

So they knew how the tendency of every society was that people would run up debts. Now when they ran up debts in Sumer and Babylonia, and even in in Judea in Jesus’ time, they didn’t borrow money from money lenders. People owed debts because they were in arrears: They couldn’t pay the fees owed to the palace. We might call them taxes, but they actually were fees for public services. And for beer, for instance. The palace would supply beer and you would run up a tab over the year, to be paid at harvest time on the threshing floor. You also would pay for the boatmen, if you needed to get your harvest delivered by boat. You would pay for draught cattle if you needed them. You’d pay for water. Cornelia Wunsch…found that 75% of the debts, even in neo-Babylonian times …were arrears.

Sometimes the harvest failed…[a]nd…they couldn’t pay their fees and other debts. Hammurabi canceled debts four or five times during his reign…because either the harvest failed or there was a war and people couldn’t pay. One reason they would cancel debts is that most debts were owed to the palace or to the temples, which were under the control of the palace. So you’re canceling debts that are owed to yourself.

Rulers had a good reason for doing this. If they didn’t cancel the debts, then people who owed money would become bondservants to the tax collector or the wealthy creditors, or whoever they owed money to. If they were bondservants, they couldn’t serve in the army. They couldn’t provide the corvée labor duties – the kind of tax that people had to pay in the form of labor. Or they would defect. If you wanted to win a war you had to have a citizenry that had its own land, its own means of support.

Basically what you had in the Bronze Age and every ancient society was a different concept of time than you have today. You had the concept of time as circular. That meant economic renewal. The idea was that every new ruler, every new reign, began time all over again. It wasn’t really time, it was really the economy had to start from a new position of equilibrium. This equilibrium – basically freedom from debt, the ability to support yourself – had to start afresh.

Economists look at ancient Near Eastern history and think: “You couldn’t have had Clean Slates, you couldn’t have canceled the debts, because then you would have had anarchy.” The fact is that proclaiming a Clean Slate was the way to avoid anarchy. It was the way to restore people to self-sufficiency. So in Sumer and in Babylon, every major ruler would proclaim a Clean Slate. We have the records to detail this century after century. The word that they used was andurarum, a word that has the sense of “a river flowing.” You sort of restore the flow. It really meant that bond servants were free to go back to their families.

These Clean Slates had three elements: Number one, they would cancel the personal debts – not the business debts, not the debts denominated in silver among merchants and other rich people. These debts were business contracts, and they remained in place. It was the petty debts, the consumer debts, that were canceled. Number two, lands that had been forfeited were restored: the crop rights, if they’d been pledged to creditors. And three, all the human beings who had been pledged as bondservants would be free to return to their families.

What happened between writing the Bible…and Jesus?…We don’t know really what happened up until the time of Jesus, except that there was at that time the same war between creditors and debtors that there was in Rome. Every Roman historian of the time – Livy, Plutarch, Diodorus – they all blamed the fall of the Roman republic on the creditors behavior of assassinating the debtors’ leaders, the rule by violence and the takeover of the economy by creditors after centuries of debt war. We know that this was going on throughout the whole ancient world, including in the Near East.

We know that in the very first sermon that Jesus gave when he returned to Nazareth…was to proclaim freedom for the captives, and release for the prisoners, and to proclaim the year of the Lord’s favor, deror, which meant, basically, a Clean Slate. …What does it mean: Is he saying forgive us our sins, or forgive us the debts? Well, most of religion’s leaders, certainly the vested interests, say: “He’s talking about sins,” that religion and Christianity is all about sin, it’s not about debt.

Actually, the word for sin and debt is the same in almost every language. Schuld, in German, means the debt as well as the offense or the sin. It’s devoir in French. Basically you had exactly the same duality in meaning Akkadian, the Babylonian language. The reason goes back to an idea, called wergeld in parts of Europe, which is universal – we have it in Babylonia too. If you injure somebody: if you hurt him or you kill him, either you have to go into exile in the city of refuge, or the family gets to kill you, or you settle matters by paying. And the payment – the Schuld or the obligation – expiates you of the sin. So the word for the payment of the offense is the same as the offense, and you’d expect this similarity to occur in every language.

Some of the Qumran [Dead Sea] scrolls really proved that what was at issue was debt. ..

Well, you can imagine how upset most religions were when they found these scrolls. They said they must be by this sectarian group, the Essenes. They must be a radical group, sort of like the Trotskyists. We can just sort of ignore them. But it turns out now that biblical scholars have found that the Qumran caves seem to be the library of the Temple of Jerusalem. During the wars with Rome they moved the library to the caves of Qumran in order to keep them from being destroyed when the Temple was sacked and burned down. So these scrolls were the very core of Judaic religion.

 The fight of Jesus against the Pharisees was about this. At first Jesus said: “Good to be back in Nazareth, let me read to you about Isaiah.” In Luke 4 says it that this was all very good, and they liked him. But then he began talking about debt cancellation, and they tried to push him off a cliff.

 So basically you have the whole origin of Christianity was a last gasp, a last fight, to try to reimpose this idea of the economic renewal – of a Clean Slate – that goes back at least to the 3rd millennium BC and probably all the way to the Neolithic.

So you have this last attempt to try to get a Clean Slate, and we know what happened to Jesus. His followers were not able to bring it about. So by the 1st and 2nd centuries of our era, what could the Christians do? You’re never going to get the Roman Empire to announce a Clean Slate…So all the Christians could do was have charity. Well, the problem with charity is that you have to be rich in order to lend to somebody. It’s like what David Graeber did with Strike Debt. You can buy the debt and pay somebody else’s debt and give money away, but that doesn’t really fix the system. The result was, it really was the end times. The choice was: either you’re going to have economic renewal and restore people’s ability to support themselves; or you’re going to have feudalism.

That basically is how the Roman historians described Rome as falling. The debtors were enslaved, not only the debtors but just about everybody was enslaved, put in barracks on the land. Finally, you needed to have a population, so you let people marry and you gave them land rights – and you had slavery develop into serfdom.

Well we’re going into a similar situation today, where I think we’re going into a kind of neo-feudalism. The strain of today’s society is as much a debt strain as it was back then.

If We Don’t Solve The Problem Of Economic Polarization, We’re Going To Go Into Another Dark Age by Michael Hudson (Dandelion Salad)

For a take on more recent developments, see: How Bankers Became the Top Exploiters of the Economy (Counterpunch)

The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power.
– Franklin D. Roosevelt

In today’s world, we tend to make a distinction between “public” and “private” property. But to what extent was this distinction made in ancient societies? We know that foraging cultures do not make such distinctions, and it is in such cultures that we have spent most of our existence as a species. So when and how did such concepts emerge? And what were the social relations bound up in this transformation? These are the critical issues taken up in Privatization in the Ancient Near East and Classical World, the first book in the series of five volumes published by Harvard’s Peabody Museum as part of the colloquiums coordinated by the Institute for the Study of Long-Term Economic Trends (ISLET), co-edited by economist Michael Hudson.

While the modern “science” of economics lionizes individual private ownership and alienable private property, seeing such things as “natural” and “primordial,” it appears that these concepts developed relatively recently in history. Ancient cultures had very different ideas about land tenure and usage. The emphasis was on self-sufficiency and social cohesion, rather than maximizing profit or efficiency. Private property was not “absolute” but a social contract between the members of a society.

…French economist Emile de Laveleye[‘s] Primitive Property found ancient attitudes toward property governed by the idea of  ensuring for all families the means of self-support on the land: “Whether in Europe, Asia and Africa, alike among the Indians, Slavs and Germans, and even in modern Russia and Java, the soil was the joint property of the tribe, and was subject to periodical distribution among all the families, so that all might live by their labor, as nature has ordained.”…this practice was grounded in the classical ideal of equality as a precondition for liberty and democracy. Ancient lawmakers “had recourse to all kinds of expedients: inalienability of patrimonies, limitations on the right of succession, maintenance of collective ownership as applied to forests and pasturage, public banquets in which all took part…” This primitive egalitarianism was the true “state of nature” in Laveleye’s view, not John Locke’s fantasy of private land ownership stemming from a primordial social contract. Surveying the fields of history and anthropology, Laveleye found private property in land to be a relatively late development, emerging only in Roman times…p.4

It appears that property in the modern sense, immune from communal and public overrides, made its first incursions on royal lands in southern Mesopotamia, followed by subsistence lands that had been rendered redundant by the shrinkage of the landholding community’s member families. This surplus land seems to have passed into the market process as property “sold at the full price” voluntarily rather than as property relinquished under economic duress.

If this is indeed the case, then privatization of subsistence land, alienable irrevocably at the owner’s personal discretion, is not something primordial as social contract advocates have argued, but developed relatively late in history. It is thus necessary to examine how privatization developed in each particular ancient society. How far did each society progress (or fail to progress) toward a Roman-style codification of owner rights? What common denominators emerge as the levers of privatization. pp.7-8

Business began in the public sector

One of the big revelations of this book is that what we think of “business activities” began not by the efforts of individual entrepreneurs or families, but in what might reasonably be called the “public” sector.

Now, an obvious problem here is defining exactly what we mean by “public” and “private.” This is always tricky, especially when dealing with times and cultures very different than our own. Scholars have described Sumeria’s temples not as a “public” sector, but a “communal” sector that was administratively distinct from household activities. The temples were not under the control of any particular clan or household, which allowed them to undertake certain functions which would not have been socially acceptable for solitary individuals:

A generation ago, economic historians such as Mikhail Rostovtzeff and Fritz Heichelheim depicted “the state” as being antithetical to private property. Yet public investment by large institutions was undertaken long before the emergence of a private sector as our modern epoch knows it. Contemporary research by Assyriologists points to the state as the great catalyst of private enterprise. It was Sumerian public institutions that created usufruct-yielding lands and set them corporately apart from the periodically reallocated communal subsistence lands…

Definitions and concepts are of critical importance in tracing these dynamics. Southern Mesopotamia’s communally held land was not part of the public sector, yet neither was it private in the modern individualistic sense of the term. It belonged in principle to the community, and originally it was not freely alienable, for an obvious reason: As long as taxes and a stipulated quota or corvee labor were paid by the community, the appropriation and withdrawal of land by private individuals would have thrown the fiscal and labor burdens onto the community’s remaining members…(p. 36)…the Sumerian economy …embrac[ed]… the communal sector of self-supporting cultivators, the temples functioning as what might call public utilities, and the palaces. Each of these three sectors had its own source of handicraft labor and its own form of land tenure, none of which originally were individualistic or “private” in character.

It was…the public sector that innovated the basic array of institutions needed for profit making enterprise: corporate organization, writing and account-keeping, contracts and their formalities, weights and measure, and interest-bearing debt. However, Sumerian public investment ultimately catalyzed the growth of a private sector which ended up undermining temple and palace control. This was just the opposite of the Chicago School scenario whereby private self-seeking is primordial but repeatedly stifled by state activism and taxation…pp. 43-44

If this public entrepreneurial initiative is difficult for many observers to acknowledge today, it is because the modern world has virtually inverted the relations of Bronze Age enterprise and finance. Profit-making investment is now left almost exclusively to the private sector. But this privatization took thousands of years to achieve. Today’s public sectors no longer are creditors as in Bronze Age times; they are in debt, obliged to levy taxes co cover the cost of their operations rather than relying on their own enterprise. p.39

So we can see that what we call “business” activities began in the public/communal sector, for the public’s benefit, and not through countless individuals making anonymous transactions in “free and open” markets. Such “collective” activities were necessary for larger and more complex societies to form historically, contrary to the libertarian propaganda put forth by modern economics.

As Karl Polanyi pointed out, in most ancient and traditional societies, economic activity was undertaken primarily for subsistence rather than gain—“habitation,” rather than “improvement.” The supposed “natural” instincts to accumulate, hoard, barter, profit and haggle turn out to be not natural at all, but socially determined. Once again, to review:

The  outstanding  discovery of recent historical  and anthropological research is that man’s economy, as a rule, is submerged in his social relationships. He does not act so as to safeguard his individual interest in the possession of material goods; he acts so as to safeguard his social standing, his social claims, his social assets. He values material goods only in so far as they serve this end. Neither the process of production  nor  that  of  distribution  is  linked  to   specific   economic  interests  attached to the possession of goods; but every single  step in that process is geared to  a number  of social interests which  eventually ensure that the required step be taken. These interests will be very different in a  small hunting  or  fishing community  from those  in  a vast  despotic  society, but in either case the economic system will be run on noneconomic motives.

Indeed, given everything we know about human social relationships in tribal cultures, surplus-producing activities could have *only* began in the public (i.e. communal) sector:

In retrospect, we can see the logic in public enterprise appearing prior to private enterprise. The accumulation of capital requires a sustained generation of economic surpluses. These in turn require forward planning and account-keeping, and hence the design of standard weights and measures for form the basis for pricing and charging interest. In addition, land rent and interest presuppose the creation of contractual formalities and enforcement procedures. This seems to be why private gain-seeking emerged first and foremost at the center of society, in its public entrepreneurial institutions.p. 8

Sumer’s city-temples accumulated unprecedented amounts of capital. Indeed, it was probably only such public institutions that could have placated the adherents of the archaic consumption-based ethic and generated surpluses in socially acceptable ways. Personal self-seekers could not have easily made the breakthrough on their own, for they would have been condemned as greedy…pp. 37-38…Looking back from today’s vantage point, when private enterprise is overwhelmingly dominant, we must ask why private forms of wealth did not take the lead from the outset. The simple explanation is that a private sector in the modern sense of the term did not yet exist in Bronze Age times.

For a deeper answer it is necessary to review the anthropological record and the subsistence basis of most tribal economies. Almost everywhere they have been studied, such communities have displayed little interest in investing wealth to accumulate more wealth. The tendency is to disparage personal wealth accumulation as being impolite, rude or miserly. Furthermore, the tribal communities known to modern anthropologists have little specialized administrative apparatus; their exchange of goods and services is conducted in an informal person-to-person fashion rather than a formally “economic” manner.” …p.45

Sumer’s great contribution to civilization was a complex of innovations that broke through the traditional “anthropological” or “soft” inrerpersonal reciprocity of gift exchange to create the first known economic regime. The Sumerian innovations included bulk trade, standardized (hence, impersonal) money prices and lot sizes, sharecropping rents, wage-ration allotments, interest and contractual forms, and indeed the general system of weights and measures. All these innovations found their initial focus in the city-temples,” which were organized on the basis of a number of economic innovations that have shaped the entire world’s subsequent evolution.

It would not be too much to call these temples history’s first formal business corporations. Organizing an export trade to obtain foreign metals, stone, hardwood and other raw materials not found in the southern alluvium, Sumer’s temples legitimized capital accumulation, that is, the and to build up monetary savings….

The account-keeping for which public bureaucracies have been notorious throughout history often is viewed as a costly overhead, yet it is a precondition for managing costs and budgeting resources to generate a profit. In this respect public accounting helped pave the way for private management to emerge. Without it, private enterprise would have had to start from scratch among the Indo-European speakers who settled the Aegean and Italy… p. 9

This is a direct contradiction to the thesis promoted by libertarians. In their telling, individual “strivers” engaged in entrepreneurial activities from the get-go because our “natural human instinct” is always to maximize our personal gain to the greatest extent possible. Such behavior causes “free” markets to form ex nihilo where value is exchanged. Then, government comes along and taxes away nearly all the surplus from the value-creators to build gargantuan monuments and wage war solely for the benefit of a feckless, parasitical bureaucracy that sponges off the “makers.”

While surpluses were accumulated in the temples and storehouses of the cities, subsistence on the land was much more oriented to providing for the basic daily needs of the household and its members. To this end, the alienability of land was subject to much more restrictions:

It would be anachronistic to call the cultivators who belonged to Sumer’s landed groupings either a “private” or a “public” sector. They were not characterized by private property, for their subsistence land holdings were not theirs to freely sell or pledge for debt, at least not more than temporarily. Inasmuch as citizens held their allotments in exchange for an obligation to serve in the army and provide corvee labor duties, alienability of this land would have meant a loss of their citizenship status and its associated obligations.

To prevent this public loss, communities imposed constraints in the alienation of land…The land was redivided periodically or alienated as some families grew larger, others smaller, and new entrants joined the commune (these groupings often were open in character, (e.g. as the later Irish gelfine). Families held tenure rights to cultivate this land, but were not “free” to transfer it as they chose-or, for that matter, to forfeit it permanently and thereby lose their economic freedom, citizenship rights and consequent obligations to serve in the army and to provide corvee labor.

Land transfers among communal sector families did occur, but traditionally were limited to only temporary duration. The function of the communal land was to support its holders, not to yield a formal economic rent.p. 44…The early documented land sales from commmunal groupings to the palace suggest that such transfers were irrevocable only when the purchasing party was the king. But a widening array of exceptions developed, enabling formal property to emerge…p. 45

It was therefore this dynamic “interplay” between individual households and the communal sector in the cities that led to the explosive growth of the economy of southern Mesopotamia after 4000 BC. These communal “public” institutions are what allowed something resembling a modern economy to be established in the first place.

In today’s world, the government undertaking any business activity at all is considered something that must be avoided at all costs. We’re told that all such activities must be left to the “private sector.” This assumes that the private sector is inherently “efficient,” and the government is always corrupt and wasteful. Under the Market system the government’s sole purpose is to create a “beneficial business climate” for powerful private interests (business owners, CEO’s, stockholders, bankers, etc.) to do as they please, and the Invisible Hand of the Market will sort it all out. The depiction of governments as merely “parasites” on private sector activities is very convenient for those powerful private interests. Keeping governments in constant debt also acts as a constraint on their activities.

It used to be thought that southern Mesopotamia was a “temple state” where everything was owned and centrally planned by temple scribes and priests. Some textbooks still depict it this way. But this is inaccurate. In fact, most economic production took place in the household. Rather than running production directly, the temples used economic planning to collect and redistribute the surpluses throughout the society.

Most writers have emphasized the nature of state control over craft production. There is, however, ample evidence to suggest that craft production also was undertaken in the context of a private market economy…A potter was involved with a staple finance commodity when producing ceramics for the state authority, but he (or she) could and did produce pottery for a market economy, thus involving the production of wealth finance. A single producer could be (and the texts indicate that they indeed were) involved with both public and private domains of production.

…In sum, although the texts suggest large-scale industrial production controlled by the state, the archaeological record suggests that most craft production took place outside the physical context of a centralized state bureaucracy. This is most clearly evident in the case of pottery…One can hardly avoid the conclusion that the distribution of these commodities was not directed by state bureaucrats from centralized warehouses. These everyday essential goods were obtained from private craftsmen who produced them for purchase or barter within a market economy. No doubt, as in the case of potters, they also produced specific quotas for delivery to state institutions…

Mesopotamian texts suggest that craftsmen and farmers, in fact all primary producers, were responsible for providing a specific amount of their products for delivery to a state authority. I believe that the documentary evidence allows for the following interpretation: all primary producers were responsible for delivering to the state a set quota, a specific amount of manufactured product. Thus, the staple and wealth finance in the hands of the state institutions came in the form of specific quotas derived from primary producers. When the primary producer filled his/her/their quota, the remainder of time and labor was their own. This is what the third-millennium texts elaborate upon when discussing the office concerned with the bala, meaning “to turn over.” That which they “turn over” is their quota. The texts clearly indicate that primary producers were responsible for “turning over” their quotas, the balas, to the state.

Redistributive and household methods of production were not, then, distinct “stages” but interwoven with each another from the start. Redistribution was accomplished via a standardized pricing system administered by the temples. Such prices were not set by price-fixing markets; they were instead established by the temples themselves. However, such prices did eventually carry over into the “private” sector over time. It was this establishment of a society-wide pricing mechanism, and standardized units of currency that allowed money and markets to form, and not the spontaneous higgling and haggling of countless anonymous individuals. So we see that once again, it was the activities of centralized institutions that allowed markets to form in the first place.

The city-temples were the central organs through which the Sumerians mediated the economic surplus (P. 42)…Before price-seting markets developed, public institutions were the major vehicle for distributing output at standardized prices. For these large institutions it was natural for prices to be administered, if only as an internal control to check abuses and as a means of keeping accounts in commmon denominators such as silver and barley. Common prices, once established in this way, helped catalyze the development of market exchange, and ultimately price-seeking markets for goods and services that did *not* pass from the the public institutions to the rest of the economy.

…Karl Polanyi’s idea of a “redistributive stage of development” preceding that of market pricing therefore must be superceded by the recognition that public distribution took place largely via the pricing mechanism. Setting such prices was part of the public administration of measures, weights and interest rates (which were among the last prices to be deregulated, precisely because of the visible role of coercion between strong creditors and dependent debtors falling below the break-even level). Such prices were accordingly announded at the outset of many early royal laws, and appear throughout Hammurapi’s laws. p. 296

Alongside these price exchange systems, older means of gift exchange and subsistence production continued to be employed. Thus, the existence of markets (contractus) did not alter the prevailing social relations (status). Market relations were employed by strangers, foreigners, people who had no organic social relations, or between people of vastly different status:

Of course, most output was for self-use, and hence either was unpriced or exchanged at prices which, under normal conditions, followed the lead of the large institutions whose transactions tended to dominate the market (p. 296)…Private household production existed alongside that of the temples, but seems to have been oriented more towards subsistence needs with only marginal production for the market. The products of these households probably were less specialized and luxurious than those produced in the temple and palace workshops… (p. 42)

The impersonal economic formality of public institutions stands in contrast to the customary familial or neighborly informality. Throughout the Bronze Age, gift exchange continued among people of similar rank, while commercial exchange characterized relations among people of different status, or on opposing sides of the public/private divide, or from different communities. Debt obligations of the “anthropological” type among persons of similar status did not bear interest as late as the eranos loan clubs found among Athenian gentlemen, in contrast to loans from the rich to the poor or financial claims by public institutions on the citizenry at large. p. 43

Thus, we can accurately characterize the economy of these ancient Near Eastern societies as a “mixed” economy. One example of the way in which the temple activities interfaced with the broader household economy can be seen in the use of standardized weights and measures, including, as noted above, the price schedules denominated in silver shekels or bushels of barley. Another was the existence of multiple calendar systems: a lunar one for festivals, and a solar one for economic planning:

One example of how public and private modalities can coexist is reflected in Sumer’s elaboration of the calendar from a lunar one governing communal festivals to a solarized public-sector one. Neolithic and even paleolithic communities appear to have based their festivals on lunar rhythms, but lunar months vary in length and hence are unsuitable for allocating standardized rations.

Sumer’s temples and palaces needed to schedule large-scale flows of barley and other commodities on a regular basis, and therefore took the lead in introducing a 360-day public sector calendar composed of twelve equal 30-day months. This public solar calendar was adopted alongside the popular lunar calendar. (A similar dual calendrical system survives today for setting movable feasts such as Christian Easter, the Jewish New Year and Islamic Ramadan.) p. 42…

The 360-day public year left an extra five days to balance out the true solar year, and an eleven-day excess of the solar year over the lunar year. This interregnum–a “time out of time”–became the occasion for the New year festivals that provided the occasions for new rulers to renew the social and economic cosmos by cancelling agrarian debts, freeing debt bondsmen and restoring the status quo ante, above all lands that had been forfeited to creditors. p. 42

Just as public and private calendars coexisted, so did public and private modes of production. Public commerical production stood in contrast to production stood in contrast to production on communal subsistence lands. Likewise, different rates of interest were adopted for the two spheres of economic activity: silver-denominated commercial debts accrued at 1/60th per month, while agrarian barely debts accrued at higher rates, typcially 33-1/3% per year by the end of the third millennium. The result was a dual financial system operating as a bimonetary standard. pp. 42-43

There is a debate to what extent were temples truly “public” institutions, and to what extent were they actually “fronts” for certain powerful families? Were these actually set up as “trusts” for certain powerful families? Where did the public’s interest end and the private interest begin? How much of the temple activities were undertaken under the guise of providing public benefits on the surface, while behind the scenes administrators were really feathering their own nests? We have several examples of leaders abusing their power. We also have accounts of reformers attempting to restore fairness and balance. In some instances, the same leader can be engaged in both activities simultaneously.

Privatization and corruption

Communal activities and the interface between the temples and the households eventually gives rise to a true “private” sector, whose activities expanded over time. Eventually, these communal activities were more-or-less subsumed into private households–the earliest “privatization.” The people who led this trend were those most intimately connected with the redistributive apparatus–the temples and the palaces, and the merchants whose job it was to interface with those institutions (tamkarum). They managed to use their positions to profit from what might be called “business” activities even while maintaining a veneer of public-spiritedness. In contrast to the conventional story, the history of entrepreneurship really begins when these “business” activities are decoupled from their original context and taken over by powerful individuals and households.

Privatization was accompanied by a rollback of the safeguards designed to protect the average person. This did not lead to a release of pent-up entrepreneurial energy from the , but rather oppression as the powerful took advantage of their positions and cut insider deals. Protections against debts were relaxed. Hudson makes an analogy to Russia after the Soviet Union fell, where people in privileged positions took over much of what had formerly been communally owned property and industries and ran them for their own benefit.

It appears to have been military expansion that caused the repurposing of the old redistributive apparatus into centered around tax collection/tribute. The palace ceased to play its former role as a “great provider” and instead became a military/administrative center. As victorious palaces conquered and absorbed surrounding cities and states, they used the bureaucratic apparatus developed in the temples to collect the taxes. Wealth flowed to the top of the social pyramid via conquest, even as the common person lost their lands and independence in such conflicts. In addition, captured lands were often redistributed as personal property to the ruler’s friends and allies in a sort of “spoils system.” This reminds me of a quote I once read about military conquest abroad generally being accompanied by repression at home.

From the early Bronze Age to late classical antiquity, historians can trace society’s economic dynamics (and the economic surplus) becoming more individualistic and free from central oversight. Individualism first emerges, culturally and economically, not from members of the “communal” (non-public) sector, but from palace rulers and their families…Personal property in the modern sense developed originally in the palace sector. It was the ruler’s own property that was the first to be made immune from communal-sector redistribution. Sargon’s dynasty took over the temples to make the flow of surplus a one-sided tribute for vanquished cities to the new capital at Akkad. In this respect military conquest was a major catalyst of privatization. Palace warlords captured what originally had been public institutions, and transformed them into instruments of their personal and economic power. p. 26

The upshot of privatization was economic polarization between creditors and debtors, landlords and tenants, patricians and clients, while the private sector grew richer largely at the expense of the public sector. A major effect of the privatization of subsistence land, for instance, was a change in the economic uses to which the land’s yield was put. Babylonia’s subsistence cultivators had been obliged to provide corvee labor, serve in the army, and pay taxes or other fees to the palace in exchange for holding land. But the new private appropriators kept the land’s usufruct for themselves rather than passing it on as taxes. The debtor’s labor services, crops and, in time, title to his land were taken as interest and, ultimately, forfeited as collateral for debt. This often obliged the remaining commuity members to make up the individual debtor’s fiscal shortfall; otherwise the net yield available to the palace was simply reduced.

A related consequence of privatization was a shift away from growing grains for the self-support of cultivators to more luxury-oriented and capital-intensive cash crops (olive trees and grape vines in the Mediterranean), increasingly on large estates which came to be stocked with slaves by the time of Rome’s great latifundia.p. 35

Hudson identifies four major means of land privatization in the ancient Near East:

1.) One form occurred when Sumerian rulers appropriated communal land and temple estates as their own personal property…this characteristic of individualism is first found in the royal household , from which it diffused downward via the royal bureaucracy to the rest of society.

2.) A second type of privatization occurred when rulers gave property away to their relatives (often as dowries) or companions, or assigned control of these properties (or at least their prebend rents) as tribute to local chieftains…

3.) A related type of privatization occurred as a product of political decentralization, most notably when palace control collapsed. In such crises, royal managers or warlords tended to seize the royal lands and workshops. This occurred as Hammurapi’s Babylonian empire fell apart, and after 1200 BC when Mycenaean Greece fell into a Dark Age.

4.) A fourth type of privatization became the most prevalent: the transfer of communally held lands to creditors or other absentee buyers. Beginning in southern Mesopotamia, subsistence lands were appropriated by individuals from outside the local kinship-based groupings by royal collectors, creditors or merchants through debt foreclosure; outright purchase at distressed prices; or, less frequently, at the “full market price.”

Rather than the heroic view of entrepreneurship promoted by economists, in this view entrepreneurs look more like opportunists, taking over institutions designed to serve the public good for their own purposes.

Privatization comes to the Mediterranean world

As Hudson tells it, the economic planning tools were brought from the temples of the Near East to the palaces of the Aegean world. The palaces of the Minoans and Mycenaeans contained vast storerooms which collected the output of many different households, which was then redistributed. But they did not have interest-bearing debt and loans. Then, after the Bronze Age collapse, the centralized palaces collapse and are seized by private warlords or “big men.” Greek society reconfigured itself along feudal lines. Phoenician merchants brought the concepts of debt and interest payments (along with the alphabet) to the Greeks, but they did not bring along the idea of debt forgiveness and Clean Slates.

This creates two major differences between debt in its original context the its new one 1.) There was less of an communal role played by centralized institutions in the Mediterranean world, and 2.) The rights of creditors were privileged above those of debtors. In the classical world, rather than periodically expunging the debts, such claims were held as sacrosanct! For this reason, the classical world–Greece and Rome–develop into what Hudson calls creditor oligarchies. It is this tradition which we have inherited in the West.

Greek history begins not with Athens and Sparta, but in the western periphery of the Late Bronze Age world, in Mycenae and other Late Bronze Age towns c. 1400-1200 BC. Here, Mesopotamian practices were transmuted into something new as the Mycenaean Greek palaces adopted syllabic record keeping (Linear B), sealing, and large workshop production–but not interest bearing debt…Not only is debt missing, but money too: “Since the palace revenue is presumably derived from feudal dues and from foreign conquest, monetary or other media of exchange do not play any significant part in the records…In lieu of money and the flexibility it affords for an efficient specialization of labor, the Mycenaeans denominated their levies in standardized “bundles” of commodities fixed in proportion. In the Pylos Ma- tablets, for instance, a number of townships are put down for contributions whose mutual proportions of six commodities remain constant at 7:7:2:3:1-1/2:150.

No evidence of debt appears in Greece and Italy until it is introduced by Syrian and Phoenician merchants around the 8th century BC. Without intersectoral debt balances there was little need for rulers to cancel arrears as part of general restorations of order. Thus, the entire character of kingship became less commercially oriented (and less public).pp. 18-19

The fact that centralized public property and traditions of royal oversight were weakest in Greece and Italy probably contributed to the fact that privatization developed most easily in these formerly peripheral regions after palace authority collapsed throughout the Mediterranean and Levant c. 1200 BC in the wake of a general social breakdown and drastic shrinkage of the population and commercial activity. p. 19

Interest-bearing debt became the prime level of classical privatization, enabling wealthy family heads to pry away the land of smallholders. Elected officials in some Greek city-states pledged *not* to cancel the debts or redistribute the land — just the opposite principle of Bronze age rulership. Under these conditions, the protected property was no longer that of the citizenry at large, but the large estates and fortunes of the few. Debt relations became even more polarized in Rome, where wealthy creditors turned what had been communally held subsistence landholdings into latifundia slave plantations. p. 27

With no Clean Slates to cancel the mounting debts, the Law of Cumulative Advantage and Creeping Normalcy are free to do their dirty work unimpeded. The result is a downward spiral of debt repeatedly reducing of much of Classical society to landless debt serfs.

This debt became a major societal problem. Debt serfs could not afford to equip themselves for the army and train. They could not contribute to the commonwealth via taxes. They could not tend to their own land to produce food. They lost voting rights. Debt was hollowing out society. As a result, the relationship of the state to its citizens was transformed. Corvee labor obligations were replaced by hired and slave labor. Civic contributions were replaced with bequests from wealthy individuals. Soldiers were replaced with mercenaries. Democracy was replaced with plutocracy.

As privatization increased, the city-states had to levy taxes in order to hire mercenaries, rather than continuing to provide cultivators with land tenure rights in exchange for military and other labor services. In classical Greece, property taxes paid in coin paid for public work, which was performed mainly by immigrants and other non-citizens, or slaves (a reflection of the demeaning status of public labor throughout antiquity).

The passing of rents, interest and profits into private hands (especially those of the wealthy) led to the taxation of the commons for the benefit of large landowners. This was done in such a way as to aggravate the dispossession process. The state meanwhile reduced its role as public entrepreneur as its functions were taken over by private entrepreneurs…the Roman state increasingly absorbed the costs or “externalities” associated with private wealth-seeking by the richest families (including the cost of defending the land against both domestic civil warfare and foreign enemies). p. 28

With the privatization of land, and the parallel shift of the handicraft export industries into private hands came tax crises. The wealthiest families managed to avoid taxes, while pushing more of their own expenses onto the public budget. Instead of government reforming land tenure or taking over industry and socializing its revenues, economic control passes almost entirely into private hands. For all practical purposes, the wealthiest landowners became “the state” in alliance with barbarian war chieftains who seized land by military force. p.29

The classical world embraced privatization and individual wealth accumulation to a much greater degree than ever before. I find it ironic that Western history is often portrayed as a contrast between the “slavery” and “despotism” of Near Eastern cultures, and the “freedom” and “equality” of the Greek and Roman world. But as we saw, Near Eastern cultures allowed for debt forgiveness and redistribution of land. Classical antiquity, however, drove people into debt bondage, had massive wealth disparities, consolidated productive land into the hands of a few wealthy families, and had massive amounts of slaves working in many critical industries. Is our view of history backwards?

The modern logic of privatization

One major point that Hudson makes is that in the ancient world, unlike today, there was no assumption that powerful people acting in their own narrow self-interests would lead to beneficial social outcomes! There was no “logic” of privatization. Rather, it was generally assumed that oligarchies usurping the public purpose was a bad thing and should be avoided if possible. Powerful private interests usurping the public good was associated with immorality and collapse, rather than with progress and efficiency. There was yet no “science” of economics to tell them otherwise:

…nobody in antiquity advanced the idea that private property and personal self-seeking would bring about a more efficient social system than communal property or private property managed unselfishly. Just the opposite: The stoics disparaged private self-seeking. Antiquity produced no Milton Friedman or Margaret Thatcher, nor did an Adam Smith emerge to suggest that an invisible hand would guide personal self-seeking to increase the nation’s wealth. The policy objective was not efficiency, but “straight order” in Babylonia, social equity for the Biblical prophets, and an appeal to the “constitution of the fathers” (patrios politeia) by the Athenian oligarchs and by Cicero’s upholding of patrician Roman values. Creditors were not euphemized as savers performing a public service; they were condemned throughout antiquity as usurers preying on the poor. Nobody suggested that debt-ridden economies might work their way out of debt by saving and investing more. In these respects there were indeed was no doctrine of privatization in antiquity.

Mesopotamian rulers viewed the privatization of enterprise from a different perspective than that of today’s political philosophers. Modern governments are charged with the duty of defending creditor claims against debtors’ rights to their own economic freedom and means of livelihood. But Bronze Age rulers protected debtors against creditors…Mesopotamia’s public institutions coped with this problem of economic inequity and private patronage by countering the arrogance that tended to be inherently associated with wealth. p.53

One result of the modern world emerging out of Rome’s collapse rather than directly from the Mesopotamian upswing is that our legal traditions sanctify debt obligations rather than providing for their cancellation when they grow too heavy. Modern industry is financed with borrowed money via mortgages, bonds, and bank loans. Even our governments are debtors, not creditors as in the Bronze Age. Indeed, in an attempt to service these public debts, governments throughout the world are privatizing natural resources and public utilities long considered to be part of the national patrimony…p. 56

We all know what happened to the Roman empire after is latifundia dynamic ran its course. It declined and fell. Is something similar in store for today’s topheavy debtor economies? Will market forces again become swamped by a new growth in debt overhead? Will a new polarization enable the wealthiest classes once again to free themselves of taxes and other traditional obligations of ownership? Or will history be different this time around? p. 3

Conclusion

Privatization is at the core of the Neoliberal project that has managed the world since the 1980’s. Hollowed-out states act as little more than agencies collecting and funneling taxpayer money to private corporations. Public services in every area of life, from public transportation to health care, are sold off at fire-sale prices or shut down altogether. Politicians sit on the boards of these corporations and have their political campaigns funded by them. Lucrative jobs and lobbying positions await them when they leave Washington. Everything from K-12 schools to basic infrastructure is now under the control of private enterprises acting to maximize profits, rather than in the public’s best interests. It is, in Matt Taibbi’s phrase, a “Griftopia.” Another term might be “kleptocracy.”

Once again, private industry is not taking entrepreneurial risks, but seizing the commons and acting as costly toll-bridges to essential services–in other words, becoming rentiers. Even national defense and incarceration are profit centers for giant mega-corporations, which explains America’s vast carceral state and perpetual wars around the globe (compare to World War Two which was concluded in four years by our central government). We are told every day that the private sector is honest, efficient, and cost-effective, and that the government is corrupt, bloated, inefficient, and wasteful. But, of course, we are given this message by a media which is the property of those very same corporations. Privatization ensures that corrupt and wasteful government becomes a self-fulfilling prophecy (to be fixed by more privatization!)

It appears that private interests diverting resources from the state into their own hands played a large role in the downfall of the Roman Empire. So did reducing entire populations to debt servitude and taking away their dignity and self-reliance. One wonders how far along this trend must go before people realize that the narratives they are being fed by the corporate media and economists are self-serving lies, and decide to rise up and demand a different way of doing things.

SOURCES:

Privatization in the Ancient Near East and Classical World. Baruch Levine (Editor), Michael Hudson (Editor). Peabody Museum of Archaeology, 1996.

Are We Rome? Cullen Murphy. Houghton Mifflin Company, 2007.

The Origins of Business, Money, and Markets. Keith Roberts. Columbia University Press, 2011.