Devika Dutt & David Adler in conversation with Michael Hudson [Transcription]
DGI May 2, 2025
Nika Dubrovsky: Hello everyone. So this is the David Graeber Institute and we are working with David's archive and preparing his work for publication. Each month we host a dialogue on debt inspired by the work of David Graeber and Michael Hudson.
Today for our second session I'm happy to welcome Michael Hudson, David Adler and Devika Dutt. The global debt system lasted because it was seen as a moral story, one many people believed in. But this belief is now breaking down as more and more people see the system as neither fair or just.
So my question is what kind of future can we imagine when the only options are financial globalism tied to a declining empire or nationalist capitalism where the state acts as a corporation and citizens are treated like employees. With that I'll hand it over to David Adler who has kindly agreed to moderate today's conversation and introduce our speakers.
David Adler: Thank you so much Nika and thank you to the David Graeber Institute for hosting these really critical dialogues and conversations with such esteemed guest as we have today.
Two brilliant minds, one I must admire, I'm a little starstruck myself and very delighted to be sharing a stage with Professor Michael Hudson and a dear friend David Kadat who I believe joins us now from London. So we'll be talking today as Nika mentioned about the past, present and future of debt, the international financial system, its rapid and thorough transformation and potentially new horizons for what it might mean to transcend the limits of this highly financialized mode of capitalism and the moral stories that we tell around what it means to be in debt to each other, to our states and of course to empire. And so I'll be moderating this discussion, we're going to take it for the next hour and use we hope the last 10 minutes or so to engage you all, people who are viewing and watching from home, from work, your bosses, to take some time with us this morning or afternoon and so I'll be keeping attention to the comments section where I'll be able to relay some questions in the Q&A to our esteemed guests.
And so to kick this off I wanted to give us a sense of orientation. We're coming off a set of discussions that were happening in dark corridors as well as in public plenaries about the states of the so-called Bretton Woods Institutions, the IMF and the World Bank in Washington DC, their spring meetings, one of their two semi-annual meetings where there was a lot of anxiety, a lot of hand-wringing about the state of the international financial system, the position of the United States as a dominant player in it and the vision of the Trump administration for either maintaining or transforming the financial hegemon of the United States in that position. I thought we could go to our two esteemed panelists today to give us a sense of orientation, of where we are now and how we understand this present conjunction.
I'm sure many people who are listening and watching this program have read in the pages of the FT or in their social media feeds about this geoeconomic conjuncture and I'm hoping that we can spend a little time at the beginning of this program giving a sense of how we might understand that. So Michael you've written a lot about this both in long form and in short form on your website and I thought we might start here. How do you think we should understand the question of where we are now as we hear these rumors of sovereign debt crises escalating across the south but we also at the same time have a kind of crisis of the self-image of empire taking place right there in the heart of these so-called Bretton Woods institutions in Washington DC.
So what do you think Michael, how might we understand this present conjunction?
Michael Hudson: Well most of my discussion in super imperialism and my economic books has been a critique of the junk economics promoted by the International Monetary Fund and also the World Bank to explain why they have to impose austerity plans on debtor countries that have prevented them from achieving the government investment that's required in order to make them self-reliant. But what Nika has done and in asking me to talk to this discussion is focus on something that is completely left out of account in the financial sector's discussion of debt servicing capacity and that's the moral dimension. So I want to talk about the moral dimension because the financial sector has created a narrative and this narrative makes it appear as if somehow it's perfectly natural for countries to run increasingly into debt, for the population to polarize between creditors and debtors, almost as if this is really not a policy discussion at all but a function of nature itself.
And so what Nika and David Graeber has done is put it in the context of you know what is moral, what is fair, and I think the reason why David's book was so powerful and so important was precisely because he focused on anthropological communities where debt all began and in these indigenous communities everybody owed debts to each other. It was a mutual gift exchange. Sometimes people would give crops to their neighboring families.
The neighbors would give the same crop back. All of that was technically a gift, technically debt, but the idea in indigenous communities was that it was an integrating function. It tied people together.
There were other kinds of debts, for instance, personal injury debt, what the medieval Europeans called Bergel debt, and if you injured somebody you or your family had to make restitution to their family so that there wouldn't be a feud taking place and everybody just tries to have an eye for an eye and a tooth for a tooth. All that was kept in line with the ability to be paid and if for any reason it couldn't be paid, the offenders were sent to a city of refuge until there would be a kind of peace, the equivalent of debt cancellation, a clean slate, a new beginning where they'd all come back. The other kind of debt was bride wealth or a dowry for women. They were inter-family debts that also were always able to be paid.
The reason was that these indigenous anthropological communities were low surplus. They couldn't afford usury because that would have polarized them. If you would have permitted debt to be beyond the ability to be paid, then some families would have fallen into bondage to their creditors and the community would have lost their labor, including the labor on public infrastructure projects like Corvee or in the Middle East building city walls, irrigation, all of the public enterprises that are in the crop season cultivators had to promote.
So the debt that was formal and at a stipulated interest rate to be paid no matter what developed in a particular part of the world in Sumer in the third millennium BC and it was based on equity. It wasn't really a debt relation when the palace would provide foreign traders with textiles to travel abroad to obtain the silver and the metal and the copper and the tin and the stone that the economy needed that wasn't available in Sumer. How were they going to share the profits with the merchants that they consigned these to? Well, they assumed that the merchants were not going to keep records of every transaction, so they said, all right, in five years you'll have to repay double the original principle. We assume you'll much more than double your money. It can be paid.
You then had a mutation to agriculture where the advance of land or seeds or cattle to do the harvesting would come. That's where the problem came up and it was recognized that if there was a crop failure that the cultivators really couldn't pay the debts, they'd fall into bondage. So the solution was to avoid debt from causing this kind of economic polarization and they did it by every new ruler taking the throne and throughout the ancient Near East from Sumer to Babylonia to Iran to the neighboring territories, they would have a clean slate when a new ruler would take the throne. This is like a forgiveness of crime, a forgiveness of criminals.
People could return from cities of refuge presumably and other kinds of countries. Almost all of the world from the Near East to China had rules to prevent creditors and merchants from using their economic gains to impoverish the rest of the economy because it was recognized that debts, every rate of interest at debt is a doubling time and this doubling time of debts grew faster than the ability to be paid and so you had to write the debts down. That was the basic narrative of ancient Near Eastern religion and it was basically the logic that led Confucianism and Eastern countries to prevent merchants from having a high enough status to be able to take over the government and run the government on behalf of the creditors instead of for the public interest.
Well, what happened then was a dark age. Bad weather came around 1200 BC in the Near East. The palace economies fell apart and when trade began in the 8th century BC with Greece and Italy, the European countries didn't have any background, any historical experience with divine rulership, with rulers able to keep that in place.
So Western civilization was the first part of the world that didn't have debt cancellation, that didn't have a prevention of a financial oligarchy from developing. Well, we all know what happened from the 8th century to about the 4th century AD. The creditor class became an oligarchy, it impoverished the economy, it reduced much of the agrarian population to bondage and then to serfdom.
And then there was such a revulsion against the economic polarization, the luxury at the top throughout the Roman Empire and the poverty that was created at the bottom that the Christian religion, the Islam when it was developed, the Persian religion, this revulsion led to a banning of interest altogether in the hope that that would somehow prevent that from causing the problems that it had caused. And this abhorrence of usury was the basis of early Christianity. When Jesus came to give his first speech to a synagogue, he unrolled the scroll of Isaiah calling for the year of the Lord, meaning the jubilee year, to cancel the debts and said that was his mission.
And his sermon on the mount was the Lord's prayer, forgive us our debts as we forgive our debtors, the basis of Christianity. Until the 12th and 13th centuries of our era, when the Roman church sent out to take over the rest of Christianity, Christianity was an Eastern Orthodox church centered in Constantinople. And the church essentially recruited warlords, Norman warlords, such as William the Conqueror, and who said, we'll let you conquer England and make you king if you will agree to pay tribute to Rome and serve our interests and be our feudal vassal.
And before that, William Guiscard in Southern Italy made a similar agreement. So these vassals were put in power and essentially told to fight against Germany, the Balkans, Constantinople, churches that didn't accept Christianity. And somehow the problem was that to go to war required borrowing and debts required the payment of interest.
So it was Christianity, it was precisely the Vatican that reversed the Christian abhorrence to usury and said, we need usury and interest so that we can fight the wars to fight against people who don't accept Roman domination of religion. Well, what happened then was their local kings had a problem with local parliaments. The parliaments didn't want to approve the king's ability to levy debts to fight the Vatican's war.
This was first fought in 1215, you had the Magna Carta, which limited the king's power. And 40 years later, the English nobility waged a civil war to prevent the king from taking on money to fight Rome's war against the Germans who gained support in Southern Italy and Sicily. Well, what did the popes do? Pope Innocent III opposed the parliamentary supporters of the Magna Carta and denounced that as unchristian.
And later you had Alexander IV excommunicate the barons who fought a civil war to limit the ability of England's king to run up debts at their expense. So, and how are they going to create a narrative to support all of this inversion of what had been the center of Christianity? Well, that was the job of the 13th and 14th century schoolmen. And they developed a new word, interest, as distinct from usury.
No ancient language had a distinction between interest and usury. All charging of interest was considered to be a form of usury. But the medieval churchmen said, well, there's an excuse.
And let's look at the individual businessman, the money lender. If you have the money lenders who are merchants, they were the people who had the coinage to lend out. And if a merchant lends money to a borrower, then he's not able to use this money to make his own, pursue his own trade. So he deserves compensation. And that's lucrum cessans, there's a long discussion. So all of a sudden, instead of focusing on the vast expansion of debt for war lending by the international banking class of North Italians and Transalpine bankers, the whole focus of analysis and moral judgment was, well, doesn't the merchant have a right to make enough money to live on that cover his costs of doing business and being like other people? All of a sudden, the attention was shifted away from the international banking class lending to governments, not to individuals, to fight wars against each other.
And in the 13th century, the wars backed by the Roman Church, and then afterward wars done by the kings on their own, trying to conquer other countries. Well, the final nail of the coffin was that the merchant banking class got so strong and so rising to the top of the economic pyramid, instead of the bottom of the economic pyramid, where it was in all earlier countries, that you had one of the wealthiest international bankers, the Medici, Pope Leo the 10th became Pope. And in 1515, he gave a long justification for usury and saying, well, banks have to get their money to lend to countries to wage war.
How do they get the money? They pay interest to their depositors. And look at the Montepiata, that is a bank that was founded to provide low interest credit to poor people. And he said, if we didn't have interest, how are the poor people going to get the money to live? They would have to depend on these voracious Christian money lenders.
And so we're doing a good job. Well, all of this was focused on somehow interest was a cost of doing business. It wasn't exploitation. And creditors just had to live. Well, as you had to take off, I'm going to fast forward to the 19th century. And you had more and more arguments that debt was impoverishing and polarizing society.
Well, you had the Austrian economists, Bohm-Bawerk, for instance, said these wealthy people are making loans and doesn't the creditor deserve some kind of reward for abstaining from consumption? If the creditor makes a loan to somebody who needs the money, then he has to forgo consumption. Well, Karl Marx poked fun at this by saying, gee, the Rothschild family must be the most abstinent family in Europe because they must forego consumption so much that that's how they're getting the money. Well, of course, this was all a myth.
The wealthy people didn't forgo consumption. They were just the opposite. They were the most profligate and over consuming class there was.
So there was an idea that somehow interest was payment for a service. And that idea that interest is all fair and a payment for a service is built into today's gross national product statistics, the national income statistics. The GDP includes interest payments as providing a service somehow that adds to GDP, just like landlords provide a service, even though that landlords and creditors, bankers make interest in their sleep.
So there's been a whole focus narrative that don't look at the effective debt on impoverishing society, on empowering a financial oligarchy to get rich enough to take over the government today, like the financial oligarchy took over the Vatican and Christianity in the 16th century. It's all sort of equilibrium. And basically, you have the culmination of this in the International Monetary Fund's theory that other countries have to pay interest because they need the money to develop. They're like the poor people before. They're in need. And of course, being in need, they have to go into debt.
And that's the narrative that somehow justifies today's international division of labor and specialization of production between raw materials exporters in the global South and the creditor industrial nations, the industrial power nations from the United States, Britain, France, and the other great creditor powers. So somehow this whole moral dimension that originally shaped how society dealt with debt and interest payments has just been, how do we squeeze out enough money from the debtors to be able to pay? And it's become a purely technological question. And what David's book Debt did was to shake up this discussion and show, put it in the context of, is society going to run for the benefit of the creditor class to live by earning on interest, or is the financial sector and banking going to be run to serve society? That's the great moral question that has to be raised and should frame the discussion of interest payment in debt.
David Adler: Thank you so much, Michael. And Devika, I thought I would pass it to you now. I mean, Michael's given us this unbelievable tour of centuries and centuries of the political, economic, and moral dimensions of debt.
I thought maybe you could fill in and take us to the present. I know you've got a lot of experience in thinking about 20th century struggles for economic justice and full economic decolonization, for example, in which the question of debt was epicentral. If you think about not just, you know, Sankara's call for a united front against debt, but really from Bandung forward and thinking about colonialism in modern dress and the ways in which even though territorial colonialism had come to a close in the phase of high decolonization, there were these renewed forms of dependency and financial subordination to which these countries of the so-called global south or then third world were subjected.
Do you see what kind of traces or how can we take Michael's story about the moral frameworks and, you know, through the late 20th, some of the later movements in the 20th century around debt jubilee, debt abolition, and kind of more concrete examples, whether it's Correa's Ecuador or even up to present day, you know, you're in South Asia now in thinking about a country like Sri Lanka, who is facing off with an International Monetary Fund now. Do we see a kind of more consistent trajectory from the history that Michael's traced here? How should we understand the long legacy of these medieval and early modern stories about that through the lens of third worldism or, you know, of global south struggles for full economic sovereignty?
Devika Dutt: Thanks, David, and thank you Michael, for such a commanding history of debt and sort of telling us how interest became sort of just the cost of doing business for creditors. I already learned so much from you when you were talking, but catching us up to the present and the more contemporary history of sort of capitalism and decolonization in the late 20th, in the 20th century for a large majority of countries.
Debt, rooted in colonial exploitation, still controls the Global South. Even after decolonization, economic sovereignty remains out of reach due to debt, resource extraction, and reliance on the Global North. The US-dominated monetary system keeps countries dependent, and attempts at autonomy often face resistance or interference. Debt crises and austerity measures continue to harm developing nations, but there's hope as more people challenge the current system and seek new economic models.
But again, there are causes for hope, I think, and I'm sure we'll get to that soon. I think the unpopularity of the IMF and also now the blatant, I feel like a lot more people who have, for the right reasons, lost faith in sort of the liberal international order, which literally is supporting genocide in Gaza and all kinds of bad things. Nobody has any faith anymore in this global international system, which for a lot of reasons, even though, yeah, it gives me a bit of hope in that way, but we can get to that soon.
David Adler: Thanks so much, Devika. I'm going to turn it right back to you, Michael, and we've done a lot of trudging our way through centuries of history and trying to get up to the present. And you've written a lot about this sort of conjuncture, both as a site of contestation and perhaps a set of renewed imperial plunder and extraction.
I wonder to this point, whether you think that the present moment gives us a unique opportunity to transcend and to rewrite some of those kinds of narrative frameworks that have been so instrumental in creating a global system that normalizes, facilitates, and enables under the South to the North? And if we're turning to this question of what is to be done, how far do we have to go? Many of the questions that are coming into the Q&A are, should we be abandoning the banking system? Should we be moving to a more cooperative model? How can we finally break with these old, if renovated, moral frameworks that facilitate such subjugation and try to build a new kind of future? What could be some lessons and some guidelines and a vision that could carry us out of this so-called interregnum and into a future that doesn't require us to follow these rules that, as you've pointed out before, were written by the mighty to subjugate the less powerful across the world?
Michael Hudson: Well, there's an international crisis of imminent defaults by global South countries right now, and any crisis offers an opportunity. Here's the basic principle that should guide it. The existing volume of debt, foreign debt, dollar debt by global South and other countries cannot be paid without stopping their economic growth and preventing the investment that's needed to enable their economies to grow forward.
If they pay their debts, they cannot grow, the debt crisis will increase. And there's an implicit moral principle in all of this that the United States and its academic economics promoted, and that was that the creditor countries have an obligation to enable the debtor countries to pay their debt. This is the basis of John Maynard Keynes' proposal for a Bancor in 1944, as an alternative to the IMF.
The United States did not want to take any responsibility for letting other countries pay. It wanted to exploit them. That's its business plan.
That's how it ended up being able to use debt, to weaponize debt, to weaponize the dollar, to weaponize its foreign trade, to weaponize the World Bank's prevention of other countries from borrowing money, if it was to feed themselves instead of becoming dependent on American agriculture. Well, right now, that implicit moral principle is blocked by President Donald Trump, who has imposed tariffs to disrupt the trade of every country in the world with which the United States trades with. And his threats made a few weeks ago was, we are going to wreck your economy if you don't sit down and make a deal with us.
The deal will be that you have to fight against China. You have to trade with the United States, not trade with China. Instead of trading with Asian countries that are growing, you have to trade with the United States that's shrinking.
You have to pay their debts, and you have to give the United States special privileges to take over your economy by using its debt to buy out your public infrastructure, privatize your infrastructure, sell it to the creditors, essentially dismantle your government, and impose the same neoliberal doctrine that has de-industrialized the United States, England, Germany, and the Western economies. Well, if the United States and its tariff policy and its creditor policy prevents other countries from paying their debts by making exports to the United States and using their export proceeds to pay their creditors, then the United States has prevented the debts from being paid. It has turned the international debt system into odious debts.
And there's a long discussion dating back a century on odious debts and why odious debts must not be paid because they're odious. And so I think the debtor countries can get together and say, we are suspending our debt obligations now because the United States prevents us from paying. The United States blocks us from exporting not only to the United States by the tariffs, but to China and Asia that are the growing countries.
But if we can't export, how on earth can we pay our debts except by selling off every acre of land that the government owns, every public utility, every asset that the government owns? And this is itself an odious economic dynamic. And so we are suspending our debt payment with the intention that this suspending will be permanent until such time as we can make a new beginning and use a credit to finance our economic growth and development and economic self-sufficiency in agriculture, in basic consumer goods, in industry, just as the United States, Britain and Germany developed their own economies by doing this. We want the ability to do what the West did instead of letting the West use debt leveraging and debt dependency to prevent us from growing, to keep us in debt peonage.
That should be their economic campaign.
David Adler: I thought we were coming up to the last 10 minutes when I had promised to do a bit of Q&A. And so I just want to pass to you quickly Devika for just one quick comment, maybe one, two minutes before we turn to the Q&A, which is just, you know, Michael's given us a really clear sense of what needs to be done and what could be done. And you've got a lot of experience in looking across the world and seeing sort of what countries you think are doing, what they hope to be doing.
And I, you know, in my capacity as the co-general coordinator of this Progressive International, I also have a chance to talk with a lot of these governments and representatives and officials about this. And what I find sort of remarkable about the present conjuncture is there's a very clear sense that something must be done. I mean, they're drowning in sovereign debt.
It's massively impacting their fiscal space, as you mentioned, their ability to invest in health, housing, education, and critical services for their people. It's handicapping progressive projects everywhere from Brazil to Colombia and beyond. But we're not seeing the same kind of appetite for a Jubilee, for a debt cancellation, even that we saw 25 years ago.
Now, part of that has to do with questions of leadership. You know, where we used to have Fidel Castro calling the world to Cuba to support a global struggle against these odious debts, as Michael has said. We're not seeing the same kind of leadership on the question of sovereign debt.
We're also seeing a renewed attempt by the United States to override those efforts. We saw the South Africans try to launch a cost of capital commission through the G20 process in the U.S., forcing them to change the cost of capital commission. We just wanted to talk about the terms of integration into the international financial system into a review of the cost of capital.
Why do you think we're struggling so much to revive and renew a kind of politics of debt cancellation, of a more radical and protagonistic attempt to rewrite the rules that, as you rightly point out, continue to subjugate the world's majority?
Devika Dutt: That's a really hard question, David, but if I had to take a stab at that, I think you're absolutely correct. But I feel like this is definitely still a result of the decades of austerity that have sort of compromised basic, like compromised and worsened the lives of different people all over the world, which has given rise to fascist movements all over the world, which are not necessarily amenable to challenging global capitalism or the global debt system, especially when it's in the interest of some of them to be in the good graces of President Trump now, for instance. So in a way, like it's a very hard question, but in another way, it's very obvious that this is the result, this is an outcome of the past 50 years of debt peonage, austerity, and the impacts of horrible policies imposed on many countries of the global South.
But that being said then, the challenge then is that we need to sort of reclaim these movements, reclaim our projects of not just nation building, because I don't think nation building is appropriate anymore in this context when nationalism is only about sort of demonizing the other or keeping people out or just sort of excluding somebody from your project and taking muscular control of something in every nation. And so the challenge of course then is to sort of reclaim, fight fascism and fight all these authoritarian movements everywhere, so that we can build this leadership, build this movement against sort of the system of debt peonage as well. I don't wanna say that it has to be like one before the other, but I think this is in my view, one of the biggest impediments, because as you mentioned, there are leaders like Fidel and even in the global South, there are other places in the global South, like Nehru or Sukarno and all these great leaders, Nasser, who had a vision, who once again, weren't necessarily perfect, but were definitely trying to build towards something better.
And the leaderships in those countries now are nowhere near those that don't have that kind of vision of sort of an anti-imperial project against sort of the hegemony of the global North, but specifically the United States.
David Adler: Thank you, Devika. And so Michael, now that we're coming to kind of the conclusion of the discussion, I wanna turn to a couple of the questions.
Michael Hudson: Yes, that's what I want, questions.
David Adler: And they really focus on this question about the politics of debt. So one is asking about how legal and accounting systems that allow for ill-gotten profits to be obfuscated using corporate structures and ledger trickery.
One is about how the international balance of payments have been privatized and forgotten ever since finance was untethered from reality as this comment points in 1971. And both these questions are pointing to looking at the past half century, how it may have become more difficult to build this movement as Devika and I were discussing a kind of different politics of debt. So what do you think of those questions about how corporate and banking sectors have transformed in the past 50 years? Obviously thinking about 1971 as a critical juncture of Nixon making some world historical unilateral decisions about the future of the international financial system.
What are those changes in the past 50 years of the global economy mean for the politics of debt around the world?
Michael Hudson: Well, part of the problem is the academic system. Economists don't talk about debt. Debt plays no role in the economic models.
They say, well, it doesn't matter. Debt is, money is only avail and debt is only avail. And we owe the debt to ourselves, so it doesn't matter.
But the we is the 99% and ourselves that we owe it to are the 1%. So the academic economic profession plays no role. I think now you're beginning to see UNCTAD potentially playing an important role.
But there's very little discussion in the mainstream press against all of this. Debt is something that is considered impolite to bring up in polite company. You know, a little over a century ago, sex was what people couldn't talk about until really Freud came along.
It just wasn't what you talked about. Today, talking about debt is just like talking about sex around 1900. It disturbs people.
They don't wanna talk about it because there's no solution to the debt problem without going beyond the permissible barriers of polite company and just acknowledging that debts can't be paid. There is no equilibrium process that automatically keeps debt and foreign trade in a system of balance and equilibrium. The Ricardian theory, the theory that is used by, that Nobel prizes are given for, proves that there is no debt problem and can be no debt problem because paying debt automatically provides the opportunity to pay it.
This is absolute nonsense, but the mathematics underlying the academic theory are less sophisticated than those taught in Babylonia in 1800 BC. And we know that because I've published the school texts that scribes were taught and scribes were taught to describe how long does it take for a debt to double? And the answer is exponentially doubling in five years, quadrupling in 10 years, octupling in 15 years, multiplying 16 times in 20 years and 64 times in 30 years. Well, obviously no economy can keep up with this rate of growth.
And at the same time, the Babylonian said, well, how fast can economies grow? And we have their mathematical training texts, for instance, how fast does a herd of cattle grow? Well, it begins to grow, but then it tapers off. This is the opposite of modern business cycle theory of the National Bureau of Economic Research. You have academic economics being weaponized.
The National Bureau's theory of business cycles says that there are automatic stabilizers. You don't need a government to do any interference at all because automatically the economy is going to keep running and stabilizing. This leaves out of account the fact that every recovery since World War II from the United States to England to continental Europe has occurred at a larger and larger ratio of debt to income and debt to GDP.
And now it's reached the limit. That is said to be impossible according to every economic theory that's received a Nobel Prize. So you have to realize that there has been the narrative of analyzing the debt problem has been turned into junk economics, basically, because it denies reality.
It's been formulated by the financial sector as a kind of propaganda to distract governments and the population and political parties and movements from realizing that the debts can't be paid and therefore doing something about it. So you have to almost start another discipline. I don't know if you'd call it anthropology or something or futurism, that's what I called it in the 1970s because futurism doesn't mean anything at all and it doesn't have the baggage of academic economics saying debts don't have any problem at all, just keep on paying them.
So that's what you have to come up with. And if you have an agency, let's say like UNCTAD pointing out that the debts can't be paid, then it's obvious that if they can't be paid, they won't be paid. And the question is, how won't they be paid? Well, you just have to write them off on something more drastic than the Brady Bonds of the Latin American debt bomb that occurred after 1982.
And you have to replace academic economics with reality economics. And that's very hard to do because if you're an economist and want to bring it up, you really can't get academic acceptance in the major journals that are all run from a pro-financial, pro-creditor point of view. Economic journals, economic teaching has been turned into special interests by the financial sector and by the rentier sector.
Finance, insurance, and real estate have essentially justified themselves claiming to be making a productive contribution to the economy and to GDP and to economic growth instead of being a form of economic overhead. So the whole vocabulary and set of concepts dealing with how to look at the debt problem have to be popularized. And this has to be done, I think, from the self-interest of debtor countries outside of the United States that are trying to explain why the debt simply can't be paid and therefore shouldn't be paid without creating such a degree of impoverishment and economic polarization that it's odious and abhorrent.
David Adler: Thank you, Michael. I can think of no more of a rousing call to action than the odiousness and abhorrence of the international system of debts and the very importance stamp on all of our foreheads that if it can't be paid, it won't be paid. And whether it's our generation who takes up that call or we're able to set the terrain for a truly radical position on the abolition of odious debt remains our task.
I do think, as we've said before, that because of these problems of academic ignorance, political myopia and structural subjugation, we live in a time in which it's our task to revive and rejuvenate politics around sovereign as well as household of debts, a time to break the taboo, as Michael was saying, around debts that has come to replace the taboo around sex in our public imagination and move toward the truly liberatory paradigm that requires us to be literate in the great history that you've traced out for us, Michael. And of course, that David Graeber traced very eloquently through his work. And with that, I wanna thank Nika.
I wanna thank the team at the David Graeber Institute for the opportunity to continue a dialogue with Professor Hudson. I wanna thank Devika for joining us on short notice to have this important conversation. And I wanna thank you all for joining us online and joining us with your comments and with your questions and with your dialogue in the comment section of the broadcast.
I hope that we can meet again soon to continue this conversation, to continue with debates about how we can really work together to rejuvenate the politics around debt and think together about what a new vision might be, what it might mean to forge a common horizon for this liberation from such an odious and abhorrent system of debt, as Michael has said. Thank you so much to everyone. We're gonna close it here.
I hope you have an excellent weekend and see you next time.
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Transcription: Juan Sanguino
Photo by Pavel Neznanov on Unsplash