Preface

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Collaborative Research
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Collaborative Research
This book was produced by Human Bridges.
Michael Hudson
Michael Hudson has devoted his career to the study of debt.
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A Note From Jan Ritch-Frel, Co-Founder and Publisher of the Observatory

Michael Hudson is best known in 2025 for his work on the structure of modern finance and the world economy. I believe that in the decades and centuries to come, his efforts to explain the archaic worldviews from the Paleolithic to the Iron Age of western Eurasia will be recognized as his great achievement.

When he told me he had a mostly finished research project that he had spent decades on, in which he attempted to explain the process that produced the social structures and modern institutions that order society and shape the modern mind, I jumped at the chance to tell him it was a perfect candidate for a publishing model the Observatory has been working on—Collaborative Research, and the Mainframe publishing model that allows scholars and researchers who assemble a sufficient body of work for others to later complete and expand upon in the future.

Hudson started The Creation of Order in 1981, and went a long way toward establishing the foundation of his argument in the years that followed, before getting caught up in other research projects. Readers will appreciate the maturation of his thinking on the creation of order four decades later in the text of a speech he gave in February 2025 about the role of temples in archaic periods that led to many of the social and financial institutions of the day, which is included in this text.

It’s our hope that the content and spirit of Hudson’s pursuit to piece together and explain the creation of order will encourage future researchers to follow their instincts and dreams, and that our publishing tools and process are an appealing substrate to develop them.

Jan Ritch-Frel, August 2025

Author’s Preface

Introduction

As a professional economist concerned with the international repercussions of debt, I had a particular reason for venturing into the study of archaic society. In 1979 I was preparing a speech on the history of debt cancellations for a United Nations conference on third world debts. I wanted to show that there was once a time when debt cancellations were accepted as normal events which, instead of disrupting societies, saved them from bankruptcy and widespread debt-servitude. I began by looking into the earliest debt cancellations that were widely known—the biblical Jubilee Year of Leviticus canceling debts every 50 years, and the laws of Deuteronomy canceling agrarian debts and freeing the debt-slaves every seven years. This initial study led me to a series of increasingly broad questions: What was the earlier tradition of such debt cancellations? Did debts polarize archaic Bronze Age societies as much as they did those of classical Greece and Rome? What was the effect of interest-bearing debts on commerce and enterprise, and how did debt legislation relate to social values in general?

From reading the Roman histories of Livy and Plutarch, I knew that agrarian usury had grown pervasive by the time of Julius and Augustus Caesar at the transition from the Roman Republic to the Empire in the first century BC. Under what circumstances did so corrosive an innovation start, and how soon after its inception did it begin to cause financial strains? How did Bronze Age Mesopotamia avoid economic polarization long enough to build up its great cities and far-flung commerce? If it was simply an Oriental despotism, as some people believed, how were its traditions of economic equity and distributive justice to be explained? I was able to trace debt cancellations from Sumer in southern Mesopotamia beginning c. 2400 BC, their spread up to Assyria along the Euphrates to Mari and Syria and into Assyria’s trading colonies in Asia Minor by 2000 BC, and subsequently into Israel. As late as the first millennium BC, Assyrian rulers were still proclaiming andurārum, a word translated variously as justice and righteousness, liberty or freedom, or simply as a debt cancellation. So here were the two countries most counterposed to each other—the militarized Assyrian empire on the one hand, and Israel on the other, both using cognate words (andurārum and deror, respectively) to cancel debts. Evidently these Clean Slates restoring financial order were part of a tradition spanning a broad political spectrum of societies, which shared in common the restoration of popular liberty from debt bondage and from the forfeiture of lands to foreclosing creditors.

My adventure soon developed into a full-time occupation. I became a research fellow at Harvard’s Peabody Museum in Babylonian economic studies in 1984–1985, and thereafter a visiting scholar first at New York University’s economics and classics departments and then at its Institute of Fine Arts (IFA). Here I collaborated with Günter Kopcke in teaching seminars on the Mesopotamian influence on Mycenaean Greece in the pre–Homeric Bronze Age.

It seemed ironic that I should find the greatest support for my studies at the IFA, for at first glance there would not seem to be much connection between art history and the analysis of financial behavior. But I soon came to see that the iconography of temples and royal rituals was one of the earliest sources of empirical evidence reflecting the social values that underlay the public policies I was surveying. I also learned the importance of the archaeological context in which most statues and inscriptions of Bronze Age Mesopotamian rulers have been recovered: They were buried in the foundations of temples as part of New Year ritual dedications, often associated with royal proclamations re-creating order. This meant that the kind of Clean Slates I was studying had a sacred ritual context.

In short, I came to realize that archaic myth and ritual, social values, and economic practices mutually influenced one another, and were reflected in art, drama, and even in ideas of how to temper the musical scale. Most of all, social values were apparent at archaic New Year rituals. A large proportion of surviving statues, dramatic texts, royal inscriptions, and public laws derive from these festivals, for it was on these occasions that new rulers took the throne and pledged to rule with righteousness and justice, and proclaimed Clean Slates reordering society’s financial and property relations.

Underlying these policies were ideas of straightness and rectitude. From third-millennium BC Sumer to first-millennium BC Assyria, it was normal for new rulers taking the throne, usually about once in a generation, to cancel the agrarian debts of their populations and declare a moratorium on debt bondage. The effect was to establish what today would be called a political honeymoon. When rulers managed to live particularly long, as did Hammurapi in the 18th century BC, it was traditional to cancel debts on the 30th anniversary of their coronation, that is, when they had ruled for “a month of years.”

I came to the conclusion that the key to understanding archaic social practices, terminology, and royal ritual was in the overall Bronze Age worldview—its value system and ultimately its cosmological foundation. From the Bronze Age through classical antiquity, the symmetries found in nature served as a model for worldly society, its division into tribes and amphictyonies, and its periodic economic renewal based on equal shares, above guaranteeing of subsistence plots to each family in what were predominantly agrarian economies. This worldview shaped the values according to which populations expected rulers to act, and how rulers were educated to act.

Even warfare was made part of the ordered cosmos. Sumerian towns often went to war with each other as they jockeyed for position to control watercourses and achieve leadership of southern Mesopotamia. In addition to military attack and defense being subject to strict formalities (as certainly was the case in Greek and Roman antiquity), after their battles were over, rulers consolidated their victories by declaring financial Clean Slates for their own population and those of the defeated cities. These proclamations won the loyalty of war-wracked populations by preserving their land tenure. Holdings that had been sold or forfeited to creditors were returned to their original family holders, while family members enslaved for debt were set free. This “restored order” to the postwar situation. What made my investigation along these lines more complex than I had anticipated was the realization that in order to explain how interest-bearing debt arose in the first place, I had to understand the structure and value systems of societies that regularly proclaimed amnesty for debtors. Interest-bearing debts in the third and second millennia BC typically were owed by cultivators to the temples (and later to the palaces) for sharecropping rents or various kinds of user-fees (e.g., for water usage), or by merchants for the advance of textiles and other temple workshop products. These merchants held semipublic status, and owed their wealth mainly to their favorable relations with the temple or palace bureaucracies. It was in fact their temple interface that sanctified what actually was a kind of profiteering from public office.

In sum, I was dealing with a mixed economy combining both public and private enterprise. Well-placed individuals amassed wealth to obtain their own lands and servants, primarily by handling temple or palace handicrafts for export, or subleasing temple lands to sharecroppers. Such merchants owed silver to the public institutions, while engaging in petty usury by advancing money for the grain obligations due from the peasantry to the palaces and temples. Cuneiform records describe rich families conspicuous for a generation or so, but they tended to vanish in response to reassertions of palace authority. Ambitious rulers no doubt sought to consolidate popular support against local vested interests by keeping wealthy families dependent for their social position on the temples and palace. In any event, rulers had an obvious interest in clearing the land of debts, if only to secure the loyalty of their populations and gain that of subject towns.

The speculations of most political theorists concerning how the state originated are not helpful in explaining the genesis and unique economic functions of Sumer’s entrepreneurial temple-institutions. Instead of describing ancient Mesopotamia or for that matter Egypt or the Indus Valley, to say nothing of neolithic Asia Minor, they drew their evidence mainly from modern tribal communities. The result is that instead of grounding their ideas in actual history, modern political theorists speculate abstractly about what might have occurred at the beginning of history according to certain modernist assumptions. They see all public-sector institutions as arms of “the state” rather than as public utilities in a society bifurcated between a subsistence, family-based communal sector and a surplus-generating public sector which did not rule society politically, although physical rules and measures stemmed from temple ritual activities and the ration system used to support public dependents.

A further problem soon became apparent in studying Mesopotamia’s debt cancellations. Their translations into German, French, and English read quite differently. Evidently each school has its own ideas of just what “freedom” means. British cuneiformists, for instance, tend to believe that Assyrian andurārum meant simply “free trade.” They construe the idea of free movement to refer to goods rather than to debt-slaves able to return freely to their homes from the households of their creditors. The American Samuel Noah Kramer believed that what happened was simply a tax holiday. In sum, reflecting their own value system, British and American translators tend to project a modern view of “the state” as something parasitic and oppressive.

These antistatist views obscure some important facts. First, neither the Mesopotamian temples nor the early palaces were yet a “state” in the sense that modern political scientists define the term. Sumer’s temples and palaces did not have the power to make laws for society at large, to levy general taxes, or even to formally declare war. Rulers formulated public laws for the palace and temples in their particular economic relations with the rest of society, but oral common law continued to govern family affairs on the land, including marriage and inheritance relations and damages for personal injury under the traditional “feud justice.”

Instead of stifling the economic independence of the free landholding population, the palace rulers who canceled the debts and “proclaimed justice” were protecting popular freedom and widespread self-sufficiency on the land, not threatening it. In short, to read archaic texts in the spirit of their times, it is necessary to put aside modern preconceptions of the state and the individualistic virtues of free trade and laissez-faire.

Long before there was a state as modern theorists define it, there were public institutions, epitomized by the Sumerian temples. Furthermore, public enterprise developed before private enterprise. In fact, it was only in a public-spirited setting that charging interest or ground-rent could have flowered without violating traditional values. Personal property emerged in the wake of public-enterprise economies breaking down toward the close of the Bronze Age. This is just the opposite of what antistatist political and economic theorists have long believed concerning an alleged profit-seeking instinct of individuals in all times and places.

Even after the concrete archaic meaning of “freedom” (or “justice,” “social justice,” or however the term should be translated) began to be interpreted explicitly as debt cancellation first by French translators led by François Thureau-Dangin early in the century, and then by the Germans behind Fritz R. Kraus, many scholars expressed doubts that such proclamations were actually enforced. These acts were seen as idealistic statements, not binding policies. This prejudice has led to widespread misunderstanding of the New Year inscriptions of Mesopotamian rulers, and hence of what actually was happening at the New Year festivals. The “myth and ritual” school interpreted these proclamations symbolically, while the materialist school has tended to ignore them as if they were just an exercise in public relations. Yet debt cancellations had the concrete economic effect of preventing financial agents of the palace or temples from permanently appropriating land held by communal kinship groupings. For thousands of years these proclamations restored order and freedom from debt-servitude for Near Eastern families.

Having discerned the political setting of interest-bearing debt, I found that something still was missing. Gradually the outlines of the missing structure became clear. What ultimately had to be explained was the genesis of the public sector itself: How did the temples come to act as civilization’s first major industrial entrepreneurs and creditors? Why were the first major workshops organized in the large public institutions rather than in the households of chieftains or other well-placed families? I found that public institutions functioned as regulated public utilities, and indeed as civilization’s first business corporations. However, unlike their subsequent counterparts, these public corporations sought to avoid the economically polarizing effects which normally result from private wealth-seeking.

The temples and palaces were civilization’s first absentee landlords (literally as “lords”) as well as innovating the first corporate enterprise. As the industrial centers of the Early Bronze Age, they supported the first dependent labor widows and orphans, the crippled and infirm, and, in time, war prisoners. These public servants were sustained by rations rather than hired for wages. When free rural labor developed in the second millennium BC, it usually was a byproduct of moneylending. This labor took the form of what economists call antichretic interest to work off the debts owed to creditor-employers: A debtor would work off his debt by providing labor on the creditor’s land, especially at harvest time.

The Bronze Age was redistributive within the public sector, but used market relations for the relatively marginal transactions between the public institutions and the landed “private” sector. What is important to recognize is that the first prices, as economists understand the term, were charged for public goods and services. So was the first interest.

How Debt Cancellations, Social Justice Proclamations, and New Year Festivals Fit Into Archaic Cosmology

By periodically undoing the dynamics of economic polarization, Mesopotamia managed to avoid the kind of disintegration that characterized classical antiquity. As I traced the evolution of the debt cancellations that restored economic equity, what interested me in particular was a tradition that finds no counterpart in modern tribal enclaves: the role of calendrical periodicities in determining the occasions for social restructuring. The central occasion for canceling Bronze Age Near Eastern debts was the New Year festival.

Surviving texts from the 21st to the seventh centuries BC indicate that in Babylon the creation epic was read aloud (or, more likely, sung) twice. This epic, Enuma Elish (“when on high”), has been known for a century, and has attracted much attention from modern religious and literary historians. But something is missing from most commentaries—the immediate social role of creation epics and their associated New Year festivals in restoring economic balance. It also was at these New Year festivals that Enmetena (c. 2400 BC), Urukagina (2350 BC), Gudea (2100 BC), the Assyrian rulers Ilushuma and Erishum early in the second millennium BC, and numerous subsequent rulers interred their Clean Slate proclamations in temple foundations or displayed them publicly.

The cancellation of rural debts and public administration of interest rates and prices occurred in the context of a broad cosmological rationale. Each region had its own local variations, but there was a common ethic of equity and standardization.

A key dimension to ordering archaic life was its public frame of reference. To think of this simply as “myth and ritual” obfuscates its worldly aspects. I prefer the term “cosmological,” referring to the Greek kosmos, an ordered world. Perception of this cosmological dimension of social ordering enables less anachronistic ideas to be formulated concerning, for instance, the evolution of cities. Their genesis was not as centers of the state and its laws, but just the opposite, as stateless and, hence, neutral free-enterprise zones, communal counterparts, amphictyonic centers, and cities of refuge. The first towns were not formed by households banding together for mutual defense or other secular purposes. Rather, the focal point of early centers, at least in the fourth and third millennia BC, was their temples. These in turn played the major role in sponsoring external trade and undertaking bulk handicraft production.

All the characteristics of cities noted by materialist archaeologists apply first and foremost to temples. Furthermore, the first space to be measured and demarcated was sacred space. Temples were oriented astronomically, and their dimensions represented models of calendrical time. This is why measures of length so often reflect calendrical numbers, e.g., Rome’s 12 inches per foot (not 10 “toes”) and probably the 36-inch yard deriving from a solar measure originally reflecting the 360-day administrative year. In any event, the sacred or celestial aspects of these early temples and public spaces lay in their articulation of cosmological order, which in turn had a social and economic function. Sacred and social cosmologies developed in tandem, and were seen as a holistic unity.

The Unhelpful Myth of Technological Determinism

Assyriologists interested in economic matters have concentrated on the most basic level of material analysis: the technologies used, population levels and the degree of urbanization, soil yields, consumption standards, and the accumulation of wealth, as far as these can be ascertained from the limited surviving documentation, burials, and architectural remains. Nearly everything else must be inferred, and speculation is often looked upon askance by those whose frame of reference consists of trees rather than the forest.

Attempts to put technology in its social context have suffered from the “materialist fallacy”: the idea that if one knows what technology was employed, the social structure follows more or less automatically. For instance, it is obvious that neolithic agriculture made possible the production of large crop surpluses. These were greatly augmented by irrigation, even in rainfed regions, enabling the support of a specialized workforce of craftsmen and traders, a managerial class, priesthood, and for that matter an army. But what does this really tell us? It only describes economic potential, not how the surplus was organized and distributed, who obtained the commercial proceeds or ended up with the community’s gold and silver.

An enlightening result of studying archaic civilization is the discovery that there are many ways to organize any given technology—so many that no theorist has grounds to claim that any given type of social structure follows “naturally” from a particular technology or ecological environment.

One learns to beware of the tendency to reason backward and to assume that any given way to organize society is a more or less natural and inevitable response to a combination of local conditions and “objective” technological and economic systems, culminating inexorably in our own social system. (Aristotle, for instance, believed Greek-style slavery and aristocracy to be natural and universal.) The corollary of this attitude is to assume that other ways to organize social life are less efficient; otherwise, why would they have died out? Archaic customs are depicted as species that have not survived the struggle for existence. What rarely is questioned is whether the survivors have gained their status by better economic organization and new technologies, by superior military organization, or simply by brute force of numbers or covert forms of conquest.

The absence of any inherent linkage between technology and social structure is illustrated clearly enough in today’s world by the fact that the world’s leading economies share similar technologies but organize their societies along quite different lines.

As early as the third millennium BC, Mesopotamia, Egypt, and the Indus Valley used much the same technology—bronze-making, weaving, irrigation, and military weapons—yet they organized their industry and agriculture, their political and social systems along quite different lines. There thus was no single “natural” way to develop. Each region organized its economic life in a distinct manner but not along modern lines. There were so many ways to evolve that practically every variation that could be thought of was tried except that no ancient society turned to economic individualism. This, like debt-financed direct investment, is a modern phenomenon. In no Bronze Age society was industry financed by debt, nor was this done in classical antiquity. Instead of letting individuals pursue their financial advantage with the idea that this would maximize society’s overall output and income, archaic social philosophy viewed one person’s gain as resulting in someone else’s loss.

The socially permissible thing to do with one’s wealth was to consume it in a public display associated with hosting a feast, to bury it with an ancestor, or simply to give it away. Well-to-do peers lent money to each other without charging interest (e.g., the Greek eranos loans). But usury and mercantile profits were disparaged, despite the fact that most well-to-do individuals engaged in such activities. From the Mesopotamian temples and Near Eastern palaces up through classical Greek and Roman workshops, industry was self-financing, as was the public sector for the most part, avoiding taxation (but drawing tribute where possible). Profits earned by public enterprise financed monumental building or public works—mainly temples and canals. Precious metals were cast into statues as communal savings.

The basic financial dynamic of Greece and Rome, from the sixth through first centuries BC, was that of petty usury (consumer lending). This was a zero-sum activity in which the merchant’s gain was indeed the client’s loss. Land and other collateral passed into the hands of usurers while debtors and/or their family members fell into debt-servitude.

We must beware of confusing consequences with intentions. Many traditions retained superficial trappings of their original function, but survived in a different context. For instance, modern boundary posts at the entrances to large country estates or urban tenements often take the form of square columns topped with a sphere. One would not be likely to think of them as an archaic image of squaring the circle, yet precisely this cosmological significance was a feature of early boundary markers. Setting off property in this way symbolized its part in the permanent celestial order. Bronze Age Mesopotamia’s boundary stones were mainly for the public temples and palaces. Communal landholdings, being subject to periodic redistribution, had markers made of more perishable materials. In any event, none have survived, and there is no reason to think that they originally contained cosmological sanctification, except to the extent that they originally emulated public boundary stones. They made property transfers irreversible, originally a character only of sanctified public property.

Had Clean Slates not been proclaimed, archaic communities would have polarized between rich and poor, creditors and debtors. This would have made them prey to invaders, for an effective military tactic, from Sumerian times through the hapiru occupation of Canaanite towns c. 1400 BC and as late as classical Greek and Roman antiquity, was for attacking armies and defenders alike to promise to cancel local debts and redistribute the lands in return for popular support. The military manual by Tacticus in the third century BC, for instance, suggested such debt cancellations as a tactic for winning over local peasant-armies. Plutarch’s life of Coriolanus in early Rome turns on much the same promise of canceling the population’s debts, and this issue triggered the early Secessions of the Plebs. But by these relatively late times the tradition of Bronze Age Clean Slates had long been forgotten.

The Modern Context for The Creation of Order

Taking an intellectual trip back into archaic times invariably turns into an exercise in mind expansion. Instead of asking what kind of society might result from new technological breakthroughs, one asks what kinds of societies could have produced the artifacts, records, and myths that survive. How different were the organizing principles at work and the ideas of social order that underlay the earliest urbanization and such practices as interest-bearing debt? And to what extent were these developments built into the structure of modern civilization?

The evolutionary twists and turns of the alphabet, urbanization, and land tenure point to perhaps the most striking discovery in an excursion into the archaic past: As on returning from any long trip to a foreign land, we see our own society from a new perspective. Many symbols that seemed merely decorative turn out to have a cosmological significance going back to the origins of civilization. The Bible itself may appear in a new light after reviewing the Bronze Age past, particularly its periodic debt cancellations and notions of social liberty and equity. Some archaeologists try to make popular points by leaning with the prevailing political winds and lauding the benefits of individualism. The fact that early Mesopotamia and Egypt yielded to more individualistic (and aristocratic) Iron Age successors is taken to mean that they were not “efficient”; otherwise they would not have been conquered. Does this really demonstrate the benefits of economic individualism? Or did lower-level armies conquer the more sophisticated societies of Mesopotamia, Egypt, and the eastern Mediterranean?

In an important respect, civilization since classical antiquity represents a decontextualization, for the process of diffusion is invariably associated with innovations taken out of context. When the centralized Bronze Age economies were overthrown, their economic practices were put into a new context of warlord estates. This privatized the hitherto centralized Bronze Age modes of organization directed by large public institutions. Aristocracies became closed, and few palace rulers survived to periodically reverse the forfeiture of lands and personal freedom to creditors. On the relatively rare occasions when debts were canceled, most notably in Sparta in the third century BC by the kings Agis and Cleomenes, it was too late: Agis was exiled, Cleomenes was forced to commit suicide, and their successor Nabis was defeated by Rome.

It takes many years to master the linguistic skills needed to translate cuneiform archives. Analysis of the documents excavated in Sumer, Mari and Ebla, Ugarit, Crete, and Mycenae has absorbed many years in the lives of scholars drawn from a rather small pool of graduates in Near Eastern and Mediterranean archaeology and philology. Once ushered into the profession, archaeologists in the 20th century did not try to use the limited evidence available to sketch or illustrate how archaic social life was structured. The barriers to be surmounted were not just evidence, but also how ways of thought developed across thousands of years. It takes a long time for quality synthesis from a body of archaeological evidence to emerge: The initial interpretations and quotidian ideological biases that frequently accompany newly published archaeological evidence often need to be peeled away, before they can be integrated into attempts to understand broader social contexts.

I began my research into antiquity to investigate the financial worldviews underlying the debt policies of Bronze Age Mesopotamia and the biblical lands, classical Greece and Rome. I wanted to understand how debts came into being and under what conditions they were canceled regularly without disrupting Bronze Age societies, Israel under Nehemiah, and Athens in the time of Solon. I wanted to know whether the biblical debt cancellations really occurred or were just utopian, otherworldly images (as some historians have claimed). In order to put this initially narrow concern into its broad policy context, I found it necessary to expand my research to understand just how the archaic kosmos shaped society’s overall value systems. I ended up describing the archaic search for periodicities in nature and their application to society in the creation of a Natural Law of equity and distributive justice.

As a result of these studies, I expanded my original focus to understanding social transitions from the paleolithic into the Bronze Age. It was necessary to include the worldly social dimension of archaic cosmology, myth, and ritual. My starting point for writing this work accordingly became the perception that the calendrical periodicities of the heavens provided the model for organizing society, giving celestial sanction to earthly social order. Bronze Age myth and ritual, the division of populations into tribal fractions, and the iconography of public architecture and town planning were based on these calendrical proportions, in a cosmology that permeated everyday life.

This structuring had an ethical dimension, which reflected social values based on the principles of balance and proportion. The social-ethical dimension of regularity and equity is essential for understanding Bronze Age cosmologies. Royal coronations and their associated festivals of renewal, as well as foundation ceremonies sanctifying temple precincts and, in time, entire towns, helped promote an ethic of communal equity. The same is true of public laws, royal measures, much public art, and even music. Economic polarization was counteracted by periodic debt cancellation. This social renewal process is what ultimately distinguishes archaic ideas of cyclical time and liberty from modern ideas of secular progress. The irreversible arrow of time meant cumulative indebtedness and irreversible social polarization.

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