Abolition, Central Banking, and Collective Bondage

1. Abolition and the Centralization of Credit

• Antebellum America: Credit markets were fragmented. State-chartered banks issued notes, prone to collapse. Defaults were harsh, and debt enforcement was local and personal.
• Civil War era: The Union financed war through the first large-scale fiat issues (Greenbacks) and a national banking system. Slavery was abolished, but in its place came a centralized fiat-credit system.
• 20th century: The Federal Reserve (1913) institutionalized the “lender of last resort.” Its raison d’être was to prevent liquidity panics and distribute losses across the whole system rather than individuals.

Coincidence: As chattel slavery ended, financial collectivism replaced it. Instead of debtors bearing bondage, society bore defaults through monetary elasticity.

2. From Lender of Last Resort to Debtor of Ultimate Resort

• Lender of last resort (central bank): Absorbs shocks when banks face runs, socializing liquidity risk.
• Debtor of ultimate resort (sovereign government): Issues unlimited debt to stabilize crises, fight wars, and fund welfare, effectively pledging the future tax base of the citizenry.
• Citizens, through inflation and taxation, pay for the defaults and expenditures that private actors are relieved of.

Moral hazard: The government’s willingness to assume debt on behalf of the population encourages over-leverage everywhere. Private bondage is abolished, but systemic bondage is universalized.

3. Indefinite National Debt and Collective Bondage

• Once the state assumes responsibility for economic stabilization, war financing, and social insurance, national debt becomes permanent and self-expanding.
• Unlike individuals, the state cannot “go bankrupt” in the ordinary sense. Instead, it perpetually rolls debt forward, backed by taxation and inflation.
• Result: The “freedom” of the individual debtor (abolition of slavery, legal bankruptcy protections) is matched by the enslavement of the body politic to endless debt service.
• The war machine is the apex beneficiary: elastic currency enables war on a scale impossible under hard money.

4. The Paradox

• Rigid inelastic money: Debtors enslaved individually, but society free collectively (state cannot easily wage perpetual war).
• Elastic fiat money: Debtors freed individually, but society enslaved collectively (state can mortgage the future indefinitely).
• Mechanism: The same tool that made abolition socially sustainable (elastic absorption of defaults) becomes the instrument for systemic re-enslavement through state debt.

5. Theological-Eschatological Layer

• Debt-bondage is transposed from persons to peoples.
• The state becomes Pharaoh: issuing decrees of freedom at the personal level while tightening the yoke collectively through taxation, conscription, and inflation.
• The war machine is the modern “devourer”: absorbing the fruit of collective bondage under the guise of protection and progress.
• True jubilee is displaced: forgiveness is never final, because the sovereign perpetually reissues obligations in the name of all.

6. Summary

• Coincidence: Abolition of slavery in America arose in parallel with the institutionalization of elastic fiat credit (Civil War → Greenbacks → National Banking → Fed).
• Shift: From individual debt bondage to collective monetary bondage.
• Mechanism: Central banking as lender of last resort; sovereign debt as debtor of ultimate resort.
• Outcome: Endless national debt, financing permanent war, coopting society’s abolitionist mechanism to re-enslave the whole polity.