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Is it necessary though? The biggest American companies 50 years ago:

1. IBM

2. AT&T

3. Kodak

4. GM

5. Standard Oil of NJ

6. Texaco

7. Sears

8. GE

9. Polariod

10. Gulf Oil

Not a single one of these companies is in the top 10 today. (Edit: correction, one is: Exxon.) Many of the current top 10 didn't exist at all 50 years ago. Thankfully our economy seems to be dynamic enough that companies must continue to compete or lose marketshare organically.

I don't know what these are "biggest" by (revenue? market cap?). If it's revenue, AT&T and Standard Oil of NJ (now ExxonMobil) are still in the top 10. Gulf Oil and Texaco (both now Chevron) are both in the top 15.[1] So 40% of that group is still around and quite successful.

1. https://en.wikipedia.org/wiki/List_of_largest_companies_in_t...

Usually when people says "biggest" it's by market cap.

The idea of a debt jubilee does not wipe out corporations, it wipes out current outstanding debts only. The idea would be that nobody would loan corporations so much money that they wouldn't be able to pay it back before the debt is wiped out.

Something like that could counter a lot of financial games that are played to the detriment of so many, which is why some societies had things like dept jubilees.

Wouldn't this just translate into higher interest rates, to make the supply of debt financially worthwhile for the lender?

We can see this market mechanism play out in the corporate lending market where companies with high credit risk must pay double or more interest rates. A debt jubilee would simply raise the default risk on all of society and thus increase rates to compensate.

If the debt forgiveness event is scheduled well in advance (and I believe that's how these things worked) why do interest rates need to change drastically? Lenders would just need to be sure that loans are structured so that they are repaid before the jubilee.

I would think the bigger effect would be to dissuade lenders from lending more than the borrowers could repay before the debt forgiveness date. Also certain things that are inflated due to finance (like housing, cars, college) might see an adjustment to more affordable prices, or maybe some things would cycle, going up when people could borrow, and going down as the debt forgiveness event approached.

It's an interesting idea, to think about the pros and cons.

Most people would be unable to get a mortgage if you were closer to the 49 year mark than not.

I wonder if it would work more like Canadian mortgages, that are renewed every five years.

Or maybe like in other countries, the price of housing would decrease to a three year loan instead of thirty.

The raw construction materials that make up your home are worth more than can be afforded in 36 payments, so I doubt that's a likely outcome.

Consider a jubilee date occurring in N years. The result would be that nobody is willing to lend with a maturity of more than N years. This is rather problematic as it means that primary debt markets can't function when N approaches zero. It would make it impossible for me to get a mortgage if N=5 for example, locking me unfairly out of the housing market for half a decade, artificially depressing house prices until N=0 when suddenly five years of pent up demand causes a demand spike/bubble.

I also don't agree that a jubilee date won't increase rates. The default risk is simply much higher now and therefore the rates must go up to compensate for the added risk. In the current system, debt isn't forgiven when repayments are late, which allows for lower rates since the default risk is lower. If late repayments automatically implies default due to the jubilee date, then rates must be higher.

I wouldn't argue that rates wouldn't go up. We might not agree on how much. For example, would jubilee in 20 years have an affect on a 5 year car loan? As far as homes go, maybe we'd just do home loans like the Canadians do, renewing/refinancing them every five years or less, timed with the debt jubilee. Doesn't need to be a big deal.

I look at it as mostly a thought exercise, questioning the way we currently handle debt. I think there is a lot of room for improvement. Maybe debt jubilees would act as a check on out-of-control debt, which seems to be a thing lately.

Take student loans. Politicians are talking about forgiving those debts. Maybe it's not such a crazy idea? But then again what they plan on doing will amount to just giving the banks the money, either inflating the money supply or treasuries that future generations have to pay back. Ugh.

We have bankruptcy laws, where you don't have to wait for the broader jubilee to declare the reset.

Of course it is different in that it follows you around for a while, but there also isn't a weird enforced lending cycle (and carrying lots of debts into a jubilee might not officially follow you around, but it would follow you around).

I'd wager there were bigger societal changes between now and 50 years ago then there were in the 50-100 range. Do you have a list of top 1920 companies and if so, how does it compare to the above list (presumably 1970)?

50 years ago the two top companies in that list had just started defending expensive and long-running antitrust cases. IBM changed its behaviour to settle these cases, transforming the computer industry, and in AT&T’s case the litigation led directly to the breakup of the company. These companies didn’t lose market share “organically.”

Almost every company on that list was the target of comprehensive antitrust action by the government, so you're proving the opposite.

I don't know about a complete societal reset, but I sure would be interested in a corporate reset.

Forest fires are good for forests over the long term. They remove large old trees that are full of rot, dead wood, and parasites. Those old giants aren't using the sun's light and other resources efficiently, but they block too much light for smaller trees in the understory to grow tall enough to compete. A forest fire clears those out, returns the nutrients in them to the soil, and provides a level playing field for smaller trees to grow and compete.

I wouldn't go full Fight Club Project Mayhem, but I'd love something like a cleansing fire that periodically breaks up or disbands all corporations above a certain size.

What makes you think the forest fire metaphor is applicable? Seems like a "firebombing Dresden" metaphor could just as easily apply.

> ...corporate reset...

You read my mind: this is exactly what is needed! I could not think of the right phrasing (because i, too, agree that a societal reset might not be the right thing here)...and the forest fire cleansing is an apt metaphor here. So thanks for sharing this thought!

I am fairly certain that corporate charters were originally time-limited.

If you are correct - and i don't doubt that you are - then this frustrates me even more around why corporations push to extend the life of their copyrights, trademarks, patents, etc. Patents and such were supposed to be an aid to kick things off (for a nascent economy), not survive for the long-ass life of some large conglomerate corporation to squeeze every little last drop of juice from all the existing citrus fruit! (Sorry, i guess lately i've been feeling very anti-corporation...and i haven't had my coffee yet today.)

I'm not sure what you're thinking of when you say a "societal reset". I've heard of this as debt forgiveness. No other property is interfered with. I believe it acts as a limit on how carried away, or long term entrenched, a society can get with debt.

Except this is not what happens at all. Older, larger trees tend to have thicker bark, which lets them survive the fires, while clearing out the understory and ground level.

Forest fires reset competition at the ground level while mostly maintaining the status quo for large, established trees.

This is exactly the sort of dynamic that would happen in many economic "resets" and is a huge part of the reason why the ultra wealthy aren't as concerned by such resets as many people assume

After thinking about this idea for a while, it occurred to me: couldn't the same thing be accomplished by banning inheritance? Debts are already forgiven upon death. The average human life isn't that much longer than 50 years, and the resets would be happening continuously.

Yes, estate taxes are progressive taxes. See Bernie Sanders' proposal:

https://www.sanders.senate.gov/newsroom/recent-business/a-pr....

This is an entirely different idea. Banning inheritance makes corporations even more powerful, as they can increase their wealth from one generation to another and families cannot.

> Banning inheritance makes corporations even more powerful

Corporations are legal fictions through which their owners operated. If ownership of corporations can’t be inherited, it doesn’t make “corporations” more powerful, it just distributes power over corporations (presuming that the absence of inheritance means that assets escheat to the State, and that the State itself is fundamentally democratic.)

How do you prevent them people from gifting their inheritance while they are alive?

What about just limiting inheritance to, say, 500k per child?

Off the top of my head, what happens to any farm, family business, or house in California?

Not sure. Maybe a policy like this stops crazy property inflation? And limits farm sizes? Meaning, local agriculture flourishes?

I think it's better for people to stop working when they get pretty rich, like $20mil. People should stop working when they get rich enough to pay for an awesome life, and give someone else the chance. And if they actually enjoy working, they can do it pro bono.

I do not trust the uber rich to mind their own business and stay out of other people's lives.

Accruement of those levels of wealth is usually the result of ownership, and not labor.

This view comes from the largely flawed assumption that making money is a zero or negative sum endeavour. In some cases it is but in many it's not. Whatever you think of his character, if Musk just threw in the towel at PayPal we wouldn't have SpaceX. I can say the same thing for Jobs, eg if he gave up after Next where would Apple be.

Making money is generally a positive sum endeavour as long as you're not generating unpriced externalities such as carbon pollution, and as such I don't like the idea that rich people stop working after they're rich. As long as they're not creating externalities we want them to continue building and contributing to society. It's a much better alternative to them relaxing on a yacht somewhere, which contributes nothing.

It's also inaccurate to think that making money by building crowds out other people from doing so. The opposite is the case. It's the same mindset behind the "immigrants took our jobs" train of thinking.

People can work as much as they want. They just don't get paid after $20mil.

I'm not worried about making money being zero sum. I'm worried about uber rich people doing uncalled for things with too much money. No one should have that kind of power.

I think we'll find a lot of the people who are currently uber rich would've either stopped working at $20 million (which would've been a big loss to the economy and society at large), or they would've gone to another country (as we see in countries with a wealth tax in EU - also a big loss). Money continues to be a motive even for those with enough to satisfy every need, because it becomes a marker of status, achievement, etc. If you remove that motive then you remove the output of some of our best minds.

You'll certainly remove their clout over society but I think you also need to consider the significant downsides to this proposal. Maybe you would be better off finding ways to limit the power of rich people over society (eg political contribution laws) instead of trying to ban being rich?

I think the issue is that people don't work to have money. They work so they can:

1. Have real practical advantage over other people in their community 2. Have real practical power to shape their community

For #1 that's mostly the middle class, who want better schools for their children, and safe pleasant environments for their families. Actions that remove that incentive, make the middle class irrelevant. Very few people are willing to work 9+ hour days during the start of their career, just so they can have more toys, and not a larger house in a good neighborhood later in life.

For #2 that's mostly the elite. If they're denied influence via money, they'll simply go into politics or religion where we'll end up with a society shaped by lucky charismatic people, and not necessarily anyone who has any skill. At least we can say non-hereditary wealthy people are lucky, and skilled as opposed to just being lucky.

What happens to any startup founder when the company hits 20 million? Do you propose we confiscate the extra shares? Obviously, putting a 20million dollar cap on the value of any startup would be profoundly distorting to the market for startups. Ownership in a company that grows in value is not equivalent to getting paid (which is approximate 100% of the click bate tweets).

> No one should have that kind of power.

I fundamentally disagree. I strongly prefer that Bill Gates gets to spend his money the way that he sees fit rather than it go to the federal government. Just the same with Elon Musk and Warren Buffet.

Any fixed amount only makes sense in a world with sound money, otherwise inflation or deflation will make the fixed number shift over time. Unfortunately because of these pernicious "inflation targets" with monetary and fiscal policy being popular the purchasing power of currency isn't even being attempted to be held stable in many parts of the world at the moment.

Why is inflation targeting pernicious? To the extent that currency is a replacement for bartering, a positive inflation rate is a mechanism for enforcing a sort of temporal locality in that conceptual bartering. Why is that bad, or else what other functions is currency serving where inflation targeting is undesirable?

> What about just limiting inheritance to, say, 500k per child?

What about just charging income tax on inheritance (but allowing deferral of tax recognition of windfall income over a period of, say, up to 10 years from the date of receipt.)

How would any of that contribute to a financial reset?

> Debts are already forgiven upon death.

Not quite. You should have life insurance and something the bank can seize to be able to get financing. So even if you die the bank can recover some of the principal. You can also file Chapter 11; that's actually a reset.

> Debts are already forgiven upon death

The dead person's estate is responsible for paying back creditors, even if that means liquidating the estate to do so.

yes, after the requisite math equations are complete, the remaining debt is forgiven.

I wonder if this would massively increase conspicuous and frivolous consumption. Some may go the direction of Bill Gates, but others may not be so benevolent. At least when wealth is conserved in the family unit it's mostly passively invested in the economy as capital supply.

So there are some noted problems with doing so. Namely, reset starting -when-? At a time of large scale inequality? I.e., millionaire owners of much of NY get locked in as owners for all future generations, and are unable to sell the land, only lease it? Does that lack of salability reduce their economic power sufficiently?

Likewise individuals; for anyone who doesn't own land at the start of the system, is there a path to land ownership?

Well to be clear I'm not saying we should just take what is directly in the bible and lift and shift it, there would obviously be substantial differences between the implementation now and then. As for the when I would say a regular calander cycle, every 50 years or so. Again this is more of the kernel of an idea than a fleshed out plan.

There's a reason this is just the kernel of an idea. It's because any possible plan you make off it will very quickly make its manifest unfairness obvious.

We aren't living in ancient times, and the distribution of wealth and debt in the world isn't what it used to be. Debt isn't "our crop failed and my family is going to starve this year" anymore.

Sure, but those questions have to be answered. Is there a system that guarantees people can own something? Is there a system that prevents it from being inherited? Else you prevent wealth generation for anyone coming to the country anew.

I agree that a reset on the extravagantly wealthy is needed...but that can also just take the form of, say, a wealth tax, without also raising questions on how new people enter the system fairly.

It can reset on a schedule. Everybody knows it's coming. It ensures that debt's don't grow so much that they warp other aspects of the economy. I believe it was done in the past to avoid the large scale virtual enslavement of the poor via debt. It was meant to be a relief valve of sorts.

Interest rates would skyrocket because the default risk of lendees just went up a lot. I'm not a fan of this idea, the debt market will figure out a way to be compensated all the same (or else refuse to provision debt, which is also a bad outcome).

Sure, the societal reset would start with promises of local manufacturing jobs but pretty soon they’d be getting guillotines imported from Shenzhen.

Ideas of large social changes always sound good in the abstract, but once you propose a real plan the devil is always in the details. In the US, we can’t even agree to let the government forgive student loan debt it already owns — but somehow completely reworking corporate debt and property will work/help/ever possibly happen?

> all land revert to it's ancestral owners

Because those who's great great great great great grandfather did well out of knowing Henry 8th don't already get enough headstart in life?

Land shouldn't be owned by the people, with rent paid yearly to the people based on its unimproved value.

This would make huge waves of distortions around these events. Who is going to be able to get a 30 year mortgage to buy a house if the debt reset is in 15 years? Now only people who can afford 15 year mortgages. As you get closer it gets worse. Then it all resets after.

I think the problems you’re trying to address with this need to be addressed in a more fundamental and continuous way.

You would buy fractional ownership in a house.

You want a societal reset? WW2 was a societal reset. The Bolshevik Revolution was a societal reset. Napoleon was a societal reset. The 30 Years War was a societal reset.

I hope I never see a societal reset.

Agreed . Yet we all benefit from these past resets.

This would cause even more short term thinking than we currently have. We need more companies that take on long term goals and projects.

I feel like the US has a similar (if incidental) cycle around antitrust. When the market is humming along regulators turn a blind eye, the public doesn't really care, etc. Over time the big companies get bigger and bigger, eating more and more smaller companies, until a breaking point is reached and suddenly everyone cares again and we have major action taken. Then the cycle starts again.

Late to the party but wanted to make sure to contribute this excellent talk by the late David Graeber about the history of debt. It includes the concept of Jubilee.

https://www.youtube.com/watch?v=CZIINXhGDcs

I kind of like the idea, in principle. But in practice...

Let's say you wipe out debts. And let's say that my pension was invested in those debts. That's going to be a bit problematic.

Let's say you reset companies. Including, say, Intel and AMD. The CPU monopoly is wiped out. Oh, yeah, and Microsoft. But next month I want to buy a computer. Can anybody make me an x86 chip? Can I get Windows, assuming that I want it? Or do I have to run Linux on a public-domain chip?

It's not going to be easy to maintain continuity of supply while shaking up firms that dominate important markets.

It would be great. We need a way of preventing "death by a thousand cuts" by bloated organizations and processes. I also think it would be good to upturn most processes since people learn how to exploit systems quite quickly.

But maybe it would be better to reset in a cascading fashion, rather than all at once.

There are other and more recent precedents for this - all debt periodically being forgiven. Graeber mentions this in is book "Debt: The First 5000 Years". Everybody knows it is coming, so the market works around it. I imagine it acts as a check on inflation via too many financial games.

So you're born 15 years into the reset.

When you're 18, you're about halfway through. If you work hard for 10 years to accumulate wealth, add value, whatever, by the time you're ~40, it's about to all get taken away. What's the point?

How about banning debt? People live according to their means?

No debt. Just gifts or charity.

No mortgages, just pay rent to the landowning class forever?

Of course the US is far too much of a debt-based society for things to change (well, without a lot of violence and instability) at this point, but mortgages aren't a thing everywhere. Home ownership does not automatically equal debt.

Currently we have a debt based monetary system, so banning debt means we would need an entirely different monetary system. This might be worth doing but there's a lot of challenges, specifically debt in some small amounts allows flexibility and options that don't exist otherwise. Some other mechanism to fund future work would need to be created to fill that gap.

https://www.weforum.org/great-reset - not based on jubilee, but rather seeing covid-19 as an opportunity to fix some of the problems which the pandemic is bringing to (more) light.

I wonder what that did to financial transactions in the 48th year?