Hudson has written eloquently and persuasively about the longstanding practice of #jubilee, in which all debts were periodically wiped clean (say, whenever a new king took the throne, or once per generation):
https://pluralistic.net/2020/03/24/grandparents-optional-party/#jubilee
Hudson's core maxim is that "debt's that can't be paid won't be paid."
24/
The productive economy will have need for credit to secure the inputs to their processes. Farmers need to borrow every year for labor, seed and fertilizer. If all goes according to plan, the producer pays off the lender after the production is done and the goods are sold.
But even the most competent producer will eventually find themselves unable to pay.
25/
The best-prepared farmer can't save every harvest from blight, hailstorms or fire. When the producer can't pay the creditor, they go a little deeper into debt. That debt accumulates, getting worse with interest and with each bad beat.
Run this process long enough and the entire productive economy will be captive to lenders, who will be able to direct production for follies and fripperies.
26/
