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DEBT: The First 5,000 Years

Monday, September 05, 2011

Anthropologist David Graeber, reader in social anthropology at Goldsmiths College, University of London, talks about his new  book, DEBT: The First 5,000 Years, and proposes a radical debt forgiveness scheme

Guests:

David Graeber

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Comments [1]

P.F.Henshaw from way uptown

You and your guest may not know, well apparently don't, that there is a systematic problem and systematic solution for excessive debt accumulation, first fully understood by JM Keynes.

The problem is that because the economy needs to maintain positive returns on investment even when it is not physically growing, savings for investment keeps growing exponentially naturally, even when the ability to pay for it does not. The reason the economists have avoided discussing Keynes' approach to it, Chapter 16 in The General Theory, may be the obscure problem that we live in a physical world, and can't control the natural limits of growth.

There's also the problem that by implication, at physical limits it becomes physically necessary to end the compounding of interest. It's spending the earnings on investment that would create earnings for the economy and relieve its unsustainable debt burden.

That would completely alter the principle of automatic multiplying wealth, that people are very emotionally attached to. It's quite unnecessary for the economy to work smoothly, though, whether it's growing or not. It does become necessary, but that would only be when, for natural causes, the physical economy is not naturally multiplying itself, like now when "the earth is full".

Still, the problem has been studied and there are real available solutions, that other economists have "religiously" avoided studying to even understand. My overview, as a systems ecologist like Keynes himself seems to have been, and references to how Keynes described the problem and solution are at:
http://synapse9.com/blog/2010/04/01/keynes-widows-cruse-compulsive-capitalism-v-natural-growth

Sep. 05 2011 11:05 AM

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