(C) Daily Kos
This story was originally published by Daily Kos and is unaltered.
. . . . . . . . . .



The Merchants of Debt: An Ancient Struggle with Modern Consequences [1]

['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']

Date: 2025-09-08

The Merchants of Debt: An Ancient Struggle with Modern Consequences

As one of the primary organizational elements of Western society, capitalism—constantly evolving over its roughly one-thousand-year history—plays a unique role. Most historians trace its origins to the commercial revolutions of medieval Europe, when Italian city-states like Florence and Venice developed banking, credit instruments, and long-distance trade networks. My old history professor Carroll Quigley described its essence this way:

“…capitalism, because it seeks profits as its primary goal, is never primarily seeking to achieve prosperity, high production, high consumption, political power, patriotic improvement, or moral uplift. Any of these may be achieved under capitalism, and any (or all) of them may be sacrificed and lost under capitalism, depending on this relationship to the primary goal of capitalist activity—the pursuit of profits. During the nine-hundred-year history of capitalism, it has, at various times, contributed both to the achievement and to the destruction of these other social goals.”

— Carroll Quigley, Tragedy and Hope: A History of the World in Our Time

While Quigley alluded to the subject in his other works, this passage does not mention the broader and more ancient influence of debt and creditors—the “Merchants of Debt.” These forces predate capitalism by thousands of years. If we were to reframe Quigley’s analysis with debt at the center, it might read like this:

“Debt and creditors, the Merchants of Debt, because their primary goal is the repayment of loans with interest, do not seek prosperity, high production, high consumption, political power, patriotic improvement, or moral uplift. Instead, they aim to ensure that the value of principal and interest remain stable or grow, often by discouraging inflationary prosperity and encouraging economic contraction. Their interest in politics extends mainly to so-called ‘sound money’ policies. Over their four-thousand-year history, the Merchants of Debt have rarely contributed to patriotic improvement or moral uplift, and more often have played a role in their erosion.”

Debt Versus Capital

It is crucial to distinguish between banking and capitalism. While they often work hand in hand, they are not the same. They do not share identical goals, nor do they have the same social consequences. Like the rest of society, capitalism itself is constrained by the demands of the Merchants of Debt.

Because of debt’s overwhelming impact on societies, ancient traditions attempted to limit its destructive potential. The Old Testament, and many civilizations prior to the 10th century in Europe, mandated periodic forgiveness of debts. Even the New Testament’s line in the Lord’s Prayer—“forgive us our debts, as we also have forgiven our debtors”—echoes that practice.

At its core lies an inherent conflict between capitalists and the Merchants of Debt. Capitalists risk their wealth on ventures that may succeed—or fail. Creditors, however, abhor risk. They lend only when assured their principal and interest will be protected, often at the expense of society’s broader dynamism.

Modern Context

This tension is not just historical—it defines our present world.

The 2008 financial crisis revealed how powerful creditors can be. Governments bailed out banks to protect creditors’ claims, while millions lost jobs, homes, and savings. Source: New York Times, “2008 financial crisis lessons.”

The Greek debt crisis of the 2010s shows creditors’ harsh grip. Institutions like the IMF and ECB imposed austerity, deepening unemployment and poverty while safeguarding repayments. Source: Brookings, “Greece’s Debt Crisis.”

In the United States today, student debt locks many young people out of fully participating in economic life—stunting homeownership, family formation, and business-building. Source: Pew Research, “Key facts about student-loan debt.”

Even now, national debt discussions focus less on societal benefit and more on protecting bondholder returns. Source: CFR, “U.S. Debt Ceiling Showdown.” That perspective reflects the Merchants of Debt’s priorities.

In modern terms, the Merchants of Debt are bond markets, hedge funds, and sovereign creditors. They may not carry moneybags in temples—but their sway is just as potent. When Wall Street decides interest rates are “too low,” policymakers obey. When hedge funds short a nation’s currency, austerity follows. The faces have changed—but the power dynamic remains.

How the Trump Administration Is Making It Worse

Rather than pushing back, the Trump administration has fortified the power of creditors:

Student Debt: Trump blocked meaningful forgiveness, resumed collections, and enacted private refinancing schemes favoring financial firms. Source: Reuters, “Judge rejects Trump challenge to student-loan forgiveness.”

National Debt Policy: His team pushed “sound money” arguments while cutting social spending; debt-ceiling brinkmanship prioritized creditors over citizens. Source: Washington Post, “Trump debt ceiling.”

Tax Deregulation: Large tax cuts for corporations and investors, paired with lax regulation enforcement, have further tilted the system toward speculation rather than productive investment. Source: ProPublica, “Trump tax cuts banks.”

International Finance: Trump backed creditor interests globally, imposing austerity on debtor nations and undermining debt-relief mechanisms. Source: Foreign Policy, “Trump IMF debt relief.”

These actions don’t just benefit capitalists—they embolden the Merchants of Debt, transforming societal debt from shared burden to extractive tool.

Historical Echoes

Societies have long confronted this conflict. Ancient Athens occasionally canceled debts to prevent collapse; the Hebrew Bible institutionalized debt forgiveness via the Jubilee year. When Rome refused, peasants fled, hollowing out the Republic. Source: Yale Law Journal, “Historical Roots of Debt.”

Today’s debates—over student loan forgiveness, structural debt relief in Global South, and nuanced inflation policy—are not novel. They’re the latest chapter in humanity’s enduring struggle with creditor power.

Closing Thought

Capitalism depends on investors’ risk appetite; the Merchants of Debt demand certainty of return. This age-old conflict shapes economies and lives. If history guides us, societies that do not limit creditor power risk stagnation, inequality, and disintegration.

That is why battles over student loan forgiveness, Fed interest policy, and debt ceilings are not dry policy—they are moral and democratic struggles over the future. Debt politics is not bookkeeping. It’s about power—who decides, who benefits, and whether societies remain governed by the people or the purse.

And under the Trump administration, the quiet tightening of creditor power continues—threatening democracy itself.

[END]
---
[1] Url: https://www.dailykos.com/stories/2025/9/8/2342499/-The-Merchants-of-Debt-An-Ancient-Struggle-with-Modern-Consequences?pm_campaign=front_page&pm_source=latest_community&pm_medium=web

Published and (C) by Daily Kos
Content appears here under this condition or license: Site content may be used for any purpose without permission unless otherwise specified.

via Magical.Fish Gopher News Feeds:
gopher://magical.fish/1/feeds/news/dailykos/