My Take | Did Aristotle predict America’s decline?

I have been sent back to reading Aristotle. That’s partly because of a recent online post by Michael Hudson, one of my favourite political economists.

Titled “The inability of democracies to resist financial oligarchies from gaining power”, Hudson wrote: “Aristotle described democracy as the political stage immediately preceding oligarchy, and tending to evolve into it. Ever since his epoch in classical antiquity, democracy has not been able to protect populations from the financial sector using debt to reduce them to bondage (in antiquity), expropriate their lands by debt foreclosure, take their property and demand a rising share of their income as debt service. The result of financial patronage is debt dependency – and in modern economies, debt deflation.”

Actually, that’s not strictly accurate if you refer back to the political or constitutional schema of different forms of government as presented in Aristotle’s Politics, but that’s a minor query. I take Hudson’s general point.

There is much in his post that needs unpacking, if you didn’t already know his unique research into the practice of debt forgiveness dating back to the Bronze Age of Sumer, Babylonia, Assyria and the world’s oldest city, Ur, in ancient Mesopotamia.

To cut a long story short, you would be amiss if you assume modern – read American/Western – financial system, practice and theory, along with their much-celebrated “financial innovations”, must be much more sophisticated and enlightening than the ancients.

Much more complex, yes, involving advanced mathematics and computer simulations with complicated derivatives that no one knows how to evaluate and determine their true risks. But more sophisticated and enlightening – or moral? Definitely not.