In elites we trust

What, borrowing the tone of Morpheus in The Matrix, if I were to tell you that it is an extremely rare government that ever actually pays its debts?

“If one looks at the history of public debt, almost all public debt that’s ever been issued has been, in the end, inflated away or had its real value reduced through restructuring,” said Felix Martin, a macroeconomist and bond investor, who took part in the [London School of Economics] discussion.[1]

That comes to me from Matt Phillips in a critique of the finger-wagging being waged against Greece about its debt. He points to a number of finger-wagging countries as hypocrites: Germany, saddled with reparations following World War I; Britain, by going off the gold standard; and the U.S., with inflation.[2]

And what, resuming the Morpheus tone, if I were to tell you that the purpose of a system of exchange is to ensure that those who provide goods and services are compensated? And what if I were to tell you that it was consumer bankruptcy that was cracked down upon,[3] not corporate bankruptcy or any of the ways that politicians have of evading debt?

You might suspect, Morpheus might say in that wonderful deep voice, that it is ordinary people who must pay for what they get, not powerful people.

I have repeatedly cited Max Weber[4] explaining that an economic system of exchange inherently privileges whomever has the greater capacity to say no, and that this privilege is cumulative.[5] I have developed the argument that capitalism is inextricably linked to slavery,[6] beginning from Sven Beckert’s work.[7] I have explained how capitalist libertarians and other conservatives are hypocrites for refusing to redress these discrepancies. I’ve pointed out that money unjustly reduces human beings and their efforts to mere quantities.[8] And Friedrich Hayek correctly, I believe, pointed out that Marx’s attempt to distinguish labor value from exchange value was still based on exchange value,[9] which would mean that even a socialist effort to compensate workers fully for their labors is probably misguided.

Any one of these critiques should be sufficient to radically challenge our economic arrangements. But taken together, they expose a fraud that elites perpetrate on ordinary people on an ongoing basis.

Because we refuse to trust each other. Because we refuse to cooperate. Because we insist on the doctrine of Original Sin that humans are inherently selfish, greedy, and sinful, and because, all too often, we treat others as we expect to be treated rather than as we, ourselves, would want to be treated. Because, despite our distrust of each other, we trust in elites, who being human, are just as susceptible to human failings as the rest of us. And because we do these things, we regard ourselves as pragmatic and as sane.

  1. [1]Matt Phillips, “Let’s just admit it: Governments never really pay off their debts,” Quartz, February 9, 2015,
  2. [2]Matt Phillips, “Let’s just admit it: Governments never really pay off their debts,” Quartz, February 9, 2015,
  3. [3]Committee on the Judiciary, H.R. Rep. No. 109-031, pt. 1 (2005).
  4. [4]Max Weber, “Class, Status, Party,” in Social Theory: The Multicultural and Classic Readings, ed. Charles Lemert, 4th ed. (Boulder, CO: Westview, 2010), 119-129.
  5. [5]I most fully develop this argument in David Benfell, “Sorry, Virginia, there is no such thing as ‘fair trade’,” Not Housebroken, July 11, 2014,
  6. [6]David Benfell, “Why capitalism is inherently immoral,” Not Housebroken, December 31, 2014,
  7. [7]Sven Beckert, “Slavery and Capitalism,” Chronicle of Higher Education, December 12, 2014,
  8. [8]David Benfell, “Trying to understand Marx’s Development of the Labor Theory of Value,” December 8, 2013,; David Benfell, “Money is even more broken than I thought,” Not Housebroken, June 25, 2014,
  9. [9]F. A. Hayek, The Collected Works of F. A. Hayek, ed. Bruce Caldwell, vol. 2, The Road to Serfdom: Text and Documents; The Definitive Edition (1944; repr., Chicago: University of Chicago, 2007), 140-141.

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