Students enjoy a pleasant campus at University of Tennessee at Chattanooga, but most have entered a debt servitude to pay for studies.
None are more hopelessly enslaved than those who falsely believe they are free.
— Johann Wolfgang von Goethe, 1749-1832
Know ye not, that to whom ye yield yourselves servants to obey, his servants ye are to whom ye obey; whether of sin unto death, or of obedience unto righteousness?
— Romans 6:16
The rich ruleth over the poor, and the borrower is servant to the lender.
— Proverbs 22:7
In a society where unbounded license is called freedom, and that freedom is the primary value, slavery must be the greatest sin. So it is in America today, and to cement my reputation as an untouchable troglodyte, I thought I would write an article exposing widespread modern slavery. I’m not talking about trafficking in sex slaves or illegal workers, but a slavery far more vast. It appears that slavery is a natural condition of fallen humanity. If suppressed in one form, it is bound to change shape and pop up in another, and the enslaved seem to welcome it.
In ancient times slavery was everywhere practiced, and not the relatively mild form that emerged in America where the owner had rights only to the slave’s labor. Rather, ancient slave owners had, and exercised, life and death ownership over the slave.
In the Old Testament law, slavery was regulated and its purpose was redemptive. Hebrews could only be enslaved for seven years if they defaulted on a debt, and for lifetime only if they volunteered. Of the nations around them the Hebrews could make slaves for life, bringing its people permanently into the family of God’s covenant people.
Slavery was not a condition ordained by God, but a result of the Fall. God allowed slavery to mitigate the effects of the Fall. If men weren’t sinful, slavery, like the death penalty, would never have been necessary.
Cannibals all
In 1854 a Southerner, George Fitzhugh, published a defense of slavery called Cannibals All! Or Slaves Without Masters. Now it’s not my purpose to defend slavery, but Fitzhugh pointed out a certain social dynamic that we are still dealing with today.
Think of the medieval serf. True, he was bound to labor for some master, but he also had rights. The master was legally bound to protect and provide for him not only in his productive years, but also in infancy, infirmity, and old age. The master who had the benefit of the serf’s labor also had the obligation to support him.
When serfdom was abolished, those legal protections were also abolished, and an excess of labor thrown on the market. Because of the disparity in economic power between capital and labor, the fierce competition for jobs would force labor to take every lower wage rates, down to starvation levels. As proof, Fitzhugh pointed contemporary reports of labor’s terrible living conditions in England.
Fitzhugh buttressed his argument with the charge often laid to slavery that free labor was cheaper. That was true, he said, and showed that the Southern slave actually kept a larger proportion of his labor than the northern free laborer. It also demonstrated that the Southern slave owner was bearing the burden of caring for his labor in infancy, infirmity and old age. In fact, the free laborer’s condition was worse than the slave laborer. He was a “slave without a master,” and those who profited from his labor were “Cannibals all.”
Slavery abolished — or was it?
Most Southerners were glad to be rid of slavery. Was it really abolished in America? Or did it just change its shape and take on a new form? Upon demand for war production and finance in the north, the War Between the States created vast new fortunes, wealth on a scale America had never before witnessed. These fortunes were expanded in the post war years of the Robber Barons in which industry and finance were concentrated into corporations and cartels combined with astonishingly shameless raids on the government treasury. Concentrated economic and political control brought new forms of bondage for labor and agriculture. Visionary “philanthropists” imagined a world where labor would be docile and at the same time voracious consumers, and threw big money into promoting public education – of a certain type.
The wheels nearly came off industrial capitalism with the Great Depression. Suddenly men realized that no economy could grow to the sky, and industrial capitalism – the organism of those vast corporations formed 70 years earlier – was forced to rationalize itself. Thus was born the New Deal. Under the mask of compassion for the poor, industrial capitalists shucked responsibility for caring for its laborers in infancy, infirmity, and old age onto the government, i.e., onto the taxpayer, through Social Security.
There followed unemployment insurance and other welfare schemes, until finally this was petrified into permanent policy with laws like the Full Employment Act of 1948.
Now the federal government had become the Great Massah on the national plantation. Freedom was traded for government-provided security.
Debt slavery
Although consumer credit took off in the 1920s, until after World War II Americans borrowed scandalously little money. After that watershed, they began to borrow for everything, cars, housing, business operations, agriculture. The magnanimous federal government stepped in to encourage borrowing, making interest payments tax deductible and even sponsoring entities to subsidize and encourage more borrowing: FHA, Fannie Mae, Freddie Mac, small business loans, and finally student loans.
The people willingly made themselves debt slaves.
Think what happens with a student loan: the borrower monetizes his future labor, mortgaging it to a lender. But how does this differ from an indentured servant, another kind of slave? The hungry indentured servant in England agreed to sell his labor forward for seven years in exchange for passage to America today.
Remember that the slave himself, body and soul, was not owned, but only his labor and the use of his labor. Thus when someone bought a slave or an indentured servant, he was theoretically ready to pay the discounted net present value of his future labor. The borrower taking out a student loan is doing the same. He is selling the rights to his future labor to the lender. He is giving an indenture for his future labor. He is selling himself into bondage. Ditto every other borrower, to the extent of his borrowing.
I’m not in favor of chattel slavery or any other kind, but the longer I live the more people I observe who seem incapable of governing themselves. They might be pretty good folks if they had somebody to stand over them most of the time, keep them busy, and say, “Do this, but don’t do that.” Since they don’t, they end up drunkards or addicted to dope or meth, filling up the jails. Those jails have become debtor’s prisons. Those on probation or liable to pay child support go through a revolving door in and out of jail according to their ability to keep making payments. If that’s not slavery, what is it?
I’m not in favor of slavery, but I can’t tell how debt slavery differs in kind from any other slavery. Oh, it has been sanitized and the master no longer bears the risks and costs of supporting the slave in infancy and infirmity and old age, but it’s the same old cannibalism, far as I can tell.
Maybe we are still Cannibals All!
From the October 2012 Moneychanger. Used by permission. Franklin Sanders is publisher of The Moneychanger, a privately circulated monthly newsletter that focuses on gold and silver and the application of Christianity to economics, culture and family life. We have subscribed to this newsletter for more than 20 years, and consider it a must read. F$99 a year. Franklin is an active trader in gold and silver (he’ll swap your green Federal Reserve rectangles and give you real money in return). He trades with savers and investors outside Tennessee. Subscribe to his daily price report and market commentary on the website. F. Sanders, The Moneychanger, P.O. Box 178, Westpoint, Tenn. 38486 Tel. 888-218-9226.
