A hallmark of our dark current times is debt. More and more people are drowning in debt while banks get bailed out and bankster CEOs ride into the sunset with huge bonuses even after crashing the world economy. People often think that a system of credit and debt is the latest in economic developments, but in reality debt has a long and interesting history which explains why our almost religious worship of debt can lead to dreadful human suffering.
You have the option of listening to the following 1 hour and 21 minutes-long talk by David Graeber or read my short 598-word summary below:
(Note: if the video linked above gets deleted, you may search the Internet for the title: »David Graeber: “DEBT: The First 5,000 Years” | Talks at Google«)
Summary: Debt started, and is apparently inborn in us, as a way of social cohesion. Example: I gave you, my neighbor, a cow. So, some day, you help me build a new barn. Another neighbor gave me a bunch of chicken to start my chicken coup, and next year, when he has had a bad harvest, I give him and his hungry family several sacks of potatoes…
Since humans tend to depend on one another for survival and a good life, debt thus assumes a moral dimension.
The old debts, like those I just described, were not measured in exact terms of value or repaid in exact equivalence. In fact, in at least some cultures, it was (and still is) almost an insult to repay a debt exactly, because that cuts the social ties created through mutual indebtedness. Because of this imprecise accounting of exchanged favors, money didn’t use to be necessary. Exact accounting only appeared whenever people were angry with one another (say, after an injurious fight). Then people demanded exact restitution: en eye for an eye, a tooth for a tooth, or a specific, legally codified amount of grain for 20 chickens. In contrast to friendly casual gifting, on-the-spot barter happened mostly between strangers, which people didn’t meet very often in olden times. So, there was little pressure to invent money to grease the economic wheels.
Money came into existence not really for exact accounting or facilitated exchange of goods and services — in other words, to replace barter. Rather it appeared out of military activities since troops were otherwise difficult to supply and they couldn’t make credit arrangements with the rest of the population. So, warmongering kings would issue metallic coins and give them to their armies. The soldiers could then buy the things they needed with those coins as long as people wanted the coins. To make sure the people would want the coins, the kings would tax their subjects in coins, taking back the money so their subjects would value the money and readily accept money as payment for their goods and services, thus making sure that the soldiers could buy them and were thus supplied.
Also, historically, debtors were often protected from excessive debt and usury (with things like the Hebraic Jubilee or modern bankruptcy laws), so that the beneficial system of mutual support could remain intact, instead of running off the rails creating rich masters (creditors) and destitute slaves (debtors) in a land spiraling into poverty. We now have such a big debt crisis because our bought governments are now exclusively protecting the creditors instead. The obvious problem: debtors lack money and assets and can be driven over the cliff. Creditors, on the other hand, have plenty. They probably didn’t lend away everything they have, so – if they don’t get their loans back – it’ll hurt but not destroy them. Besides, creditor’s risk incentivizes responsible lending whereas bailing out and protecting the creditors incentivizes irresponsible lending and slave-seeking.
Our current system of heartless exploitation (that essentially enslaves ever more of us ever more brutally) oddly tends to pass our moral compass rather than driving us instantly on the barricades, because we instinctively feel a moral need to pay back all debt — as the old-style debt once held society together and enabled human survival, so that debt-honoring instincts developed. However, when the principle of credit and debt is being abused like it is today, we need to surmount our instincts and put on our thinking caps, so we can see that the wealth-grabbing and hoarding that is currently going on is neither ethical nor sustainable.
For more Beanstock’s World pieces featuring David Graeber click here.
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