Where Would We Be Without Debts?

Debts oil the gears of market economy  

The spiralling national debt in countries all over the world has not only generated a spirit of doom and gloom but also given rise to a bumper crop of manuals on the topic of "how to get out of debt". Yet the truth of the matter is that without incurring debt on a vast scale we could never have achieved such levels of affluence. While in pre-modern times, economic prosperity doubled only every 500-1,000 years, over the last two centuries we have seen it multiply by this much every 40 years.

This was only possible thanks to the introduction of a debt-based monetary system. But loans are essentially a bet (or speculation) on a specific future outcome. If the outcome doesn't materialise as forecast, it results in crisis. Rather than being an accident, this is an inherent part of the system itself. That is how capitalism works! And all the countries involved form the rearguard. They have no choice.