The main reason that we’re unable to notice, I think, is that the legacy of violence has twisted everything around us. War, conquest, and slavery not only played the central role in converting human economies into market ones; there is literally no institution in our society that has not been to some degree affected. The story told at the end of chapter 7, of how even our conceptions of “freedom” itself came to be transformed, through the Roman institution of slavery, from the ability to make friends, to enter into moral relations with others, into incoherent dreams of absolute power, is only perhaps the most dramatic instance—and most insidious, because it leaves it very hard to imagine what meaningful human freedom would even be like.38
If this book has shown anything, it’s exactly how much violence it has taken, over the course of human history, to bring us to a situation where it’s even possible to imagine that that’s what life is really about. Especially when one considers how much of our own daily experience flies directly in the face of it. As I’ve emphasized, communism may be the foundation of all human relations—that communism that, in our own daily life, manifests itself above all in what we call “love”—but there’s always some sort of system of exchange, and usually, a system of hierarchy built on top of it. These systems of exchange can take an endless variety of forms, many perfectly innocuous. Still, what we are speaking of here is a very particular type of calculating exchange. As I pointed out in the very beginning: the difference between owing someone a favor, and owing someone a debt, is that the amount of a debt can be precisely calculated. Calculation demands equivalence. And such equivalence—especially when it involves equivalence between human beings (and it always seems to start that way, because at first, human beings are always the ultimate values)—only seems to occur when people have been forcibly severed from their contexts, so much so that they can be treated as identical to something else, as in: “seven martin skins and twelve large silver rings for the return of your captured brother,” “one of your three daughters as surety for this loan of one hundred and fifty bushels of grain” …
This in turn leads to that great embarrassing fact that haunts all attempts to represent the market as the highest form of human freedom: that historically, impersonal, commercial markets originate in theft. More than anything else, the endless recitation of the myth of barter, employed much like an incantation, is the economists’ way of fending off any possibility of having to confront it. But even a moment’s reflection makes it obvious. Who was the first man to look at a house full of objects and to immediately assess them only in terms of what he could trade them in for in the market likely to have been? Surely, he can only have been a thief. Burglars, marauding soldiers, then perhaps debt collectors, were the first to see the world this way. It was only in the hands of soldiers, fresh from looting towns and cities, that chunks of gold or silver—melted down, in most cases, from some heirloom treasure, that like the Kashmiri gods, or Aztec breastplates, or Babylonian women’s ankle bracelets, was both a work of art and a little compendium of history—could become simple, uniform bits of currency, with no history, valuable precisely for their lack of history, because they could be accepted anywhere, no questions asked. And it continues to be true. Any system that reduces the world to numbers can only be held in place by weapons, whether these are swords and clubs, or nowadays, “smart bombs” from unmanned drones.
It can also only operate by continually converting love into debt. I know my use of the word “love” here is even more provocative, in its own way, than “communism.” Still, it’s important to hammer the point home. Just as markets, when allowed to drift entirely free from their violent origins, invariably begin to grow into something different, into networks of honor, trust, and mutual connectedness, so does the maintenance of systems of coercion constantly do the opposite: turn the products of human cooperation, creativity, devotion, love, and trust back into numbers once again. In doing so, they make it possible to imagine a world that is nothing more than a series of cold-blooded calculations. Even more, by turning human sociality itself into debts, they transform the very foundations of our being—since what else are we, ultimately, except the sum of the relations we have with others—into matters of fault, sin, and crime, and making the world into a place of iniquity that can only be overcome by completing some great cosmic transaction that will annihilate everything.
Trying to flip things around by asking, “What do we owe society?” or even trying to talk about our “debt to nature” or some other manifestation of the cosmos is a false solution—really just a desperate scramble to salvage something from the very moral logic that has severed us from the cosmos to begin with. In fact, it’s if anything the culmination of the process, the process brought to a point of veritable dementia, since it’s premised on the assumption that we’re so absolutely, thoroughly disentangled from the world that we can just toss all other human beings—or all other living creatures, even, or the cosmos—in a sack, and then start negotiating with them. It’s hardly surprising that the end result, historically, is to see our life itself as something we hold on false premises, a loan long since overdue, and therefore, to see existence itself as criminal. Insofar as there’s a real crime here, though, it’s fraud. The very premise is fraudulent. What could possibly be more presumptuous, or more ridiculous, than to think it would be possible to negotiate with the grounds of one’s existence? Of course it isn’t. Insofar as it is indeed possible to come into any sort of relation with the Absolute, we are confronting a principle that exists outside of time, or human-scale time, entirely; therefore, as Medieval theologians correctly recognized, when dealing with the Absolute, there can be no such thing as debt.
Conclusion:
Perhaps the World Really Does Owe You a Living
Much of the existing economic literature on credit and banking, when it turns to the kind of larger historical questions treated in this book, strikes me as little more than special pleading. True, earlier figures like Adam Smith and David Ricardo were suspicious of credit systems, but already by the mid–nineteenth century, economists who concerned themselves with such matters were largely in the business of trying to demonstrate that, despite appearances, the banking system really was profoundly democratic. One of the more common arguments was that it was really a way of funneling resources from the “idle rich,” who, too unimaginative to do the work of investing their own money, entrusted it to others, to the “industrious poor”—who had the energy and initiative to produce new wealth. This justified the existence of banks, but it also strengthened the hand of populists who demanded easy money policies, protections for debtors, and so on—since, if times were rough, why should the industrious poor, the farmers and artisans and small businessmen, be the ones to suffer?
This gave rise to a second line of argument: that no doubt the rich were the major creditors in the ancient world, but now the situation has been reversed. So Ludwig von Mises, writing in the 1930s, around the time when Keynes was calling for the euthanasia of the rentiers:
Public opinion has always been biased against creditors. It identifies creditors with the idle rich and debtors with the industrious poor. It abhors the former as ruthless exploiters and pities the latter as innocent victims of oppression. It considers government action designed to curtail the claims of the creditors as measures extremely beneficial to the immense majority at the expense of a small minority of hardboiled usurers. It did not notice at all that nineteenth-century capitalist innovations have wholly changed the composition of the classes of creditors and debtors. In the days of Solon the Athenian, of ancient Rome’s agrarian laws, and of the Middle Ages, the creditors were by and large the rich and the debtors the poor. But in this age of bonds and debentures, mortgage banks, saving banks, life insurance policies, and social security benefits, the masses of people with more moderate income are rather themselves creditors.39
Whereas the rich, with their leveraged companies, are now the principal debtors. This is the “democratiza
tion of finance” argument and it is nothing new: whenever there are some people calling for the elimination of the class that lives by collecting interest, there will be others to object that this will destroy the livelihood of widows and pensioners.
The remarkable thing is that nowadays, defenders of the financial system are often prepared to use both arguments, appealing to one or the other according to the rhetorical convenience of the moment. On the one hand, we have “pundits” like Thomas Friedman, celebrating the fact that “everyone” now owns a piece of Exxon or Mexico, and that rich debtors are therefore answerable to the poor. On the other, Niall Ferguson, author of The Ascent of Money, published in 2009, can still announce as one of his major discoveries that:
Poverty is not the result of rapacious financiers exploiting the poor. It has much more to do with the lack of financial institutions, with the absence of banks, not their presence. Only when borrowers have access to efficient credit networks can they escape from the clutches of loan sharks, and only when savers can deposit their money in reliable banks can it be channeled from the idle rich to the industrious poor.40
Such is the state of the conversation in the mainstream literature. My purpose here has been less to engage with it directly than to show how it has consistently encouraged us to ask the wrong questions. Let’s take this last paragraph as an illustration. What is Ferguson really saying here? Poverty is caused by a lack of credit. It’s only if the industrious poor have access to loans from stable, respectable banks—rather than to loan sharks, or, presumably, credit card companies, or payday loan operations, which now charge loan-shark rates—that they can rise out of poverty. So actually Ferguson is not really concerned with “poverty” at all, just with the poverty of some people, those who are industrious and thus do not deserve to be poor. What about the non-industrious poor? They can go to hell, presumably (quite literally, according to many branches of Christianity). Or maybe their boats will be lifted somewhat by the rising tide. Still, that’s clearly incidental. They’re undeserving, since they’re not industrious, and therefore what happens to them is really beside the point.
For me, this is exactly what’s so pernicious about the morality of debt: the way that financial imperatives constantly try to reduce us all, despite ourselves, to the equivalent of pillagers, eyeing the world simply for what can be turned into money—and then tell us that it’s only those who are willing to see the world as pillagers who deserve access to the resources required to pursue anything in life other than money. It introduces moral perversions on almost every level. (“Cancel all student loan debt? But that would be unfair to all those people who struggled for years to pay back their student loans!” Let me assure the reader that, as someone who struggled for years to pay back his student loans and finally did so, this argument makes about as much sense as saying it would be “unfair” to a mugging victim not to mug their neighbors too.)
The argument might perhaps make sense if one agreed with the underlying assumption—that work is by definition virtuous, since the ultimate measure of humanity’s success as a species is its ability to increase the overall global output of goods and services by at least 5 percent per year. The problem is that it is becoming increasingly obvious that if we continue along these lines much longer, we’re likely to destroy everything. That giant debt machine that has, for the last five centuries, reduced increasing proportions of the world’s population to the moral equivalent of conquistadors would appear to be coming up against its social and ecological limits. Capitalism’s inveterate propensity to imagine its own destruction has morphed, in the last half-century, into scenarios that threaten to bring the rest of the world down with it. And there’s no reason to believe that this propensity is ever going to go away. The real question now is how to ratchet things down a bit, to move toward a society where people can live more by working less.
I would like, then, to end by putting in a good word for the non-industrious poor.41 At least they aren’t hurting anyone. Insofar as the time they are taking time off from work is being spent with friends and family, enjoying and caring for those they love, they’re probably improving the world more than we acknowledge. Maybe we should think of them as pioneers of a new economic order that would not share our current one’s penchant for self-destruction.
In this book I have largely avoided making concrete proposals, but let me end with one. It seems to me that we are long overdue for some kind of Biblical-style Jubilee: one that would affect both international debt and consumer debt. It would be salutary not just because it would relieve so much genuine human suffering, but also because it would be our way of reminding ourselves that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements and that if democracy is to mean anything, it is the ability to all agree to arrange things in a different way. It is significant, I think, that since Hammurabi, great imperial states have invariably resisted this kind of politics. Athens and Rome established the paradigm: even when confronted with continual debt crises, they insisted on legislating around the edges, softening the impact, eliminating obvious abuses like debt slavery, using the spoils of empire to throw all sorts of extra benefits at their poorer citizens (who, after all, provided the rank and file of their armies), so as to keep them more or less afloat—but all in such a way as never to allow a challenge to the principle of debt itself. The governing class of the United States seems to have taken a remarkably similar approach: eliminating the worst abuses (e.g., debtors’ prisons), using the fruits of empire to provide subsidies, visible and otherwise, to the bulk of the poulation; in more recent years, manipulating currency rates to flood the country with cheap goods from China, but never allowing anyone to question the sacred principle that we must all pay our debts.
At this point, however, the principle has been exposed as a flagrant lie. As it turns out, we don’t “all” have to pay our debts. Only some of us do. Nothing would be more important than to wipe the slate clean for everyone, mark a break with our accustomed morality, and start again.
What is a debt, anyway? A debt is just the perversion of a promise. It is a promise corrupted by both math and violence. If freedom (real freedom) is the ability to make friends, then it is also, necessarily, the ability to make real promises. What sorts of promises might genuinely free men and women make to one another? At this point we can’t even say. It’s more a question of how we can get to a place that will allow us to find out. And the first step in that journey, in turn, is to accept that in the largest scheme of things, just as no one has the right to tell us our true value, no one has the right to tell us what we truly owe.
NOTES
Chapter One
1. With the predictable results that they weren’t actually built to make it easier for Malagasy people to get around in their own country, but mainly to get products from the plantations to ports to earn foreign exchange to pay for building the roads and railways to begin with.
2. The United States, for example, only recognized the Republic of Haiti in 1860. France doggedly held on to the demand and the Republic of Haiti was finally forced to pay the equivalent of $21 billion between 1925 and 1946, during most of which time they were under U.S. military occupation.
3. Hallam 1866 V: 269–70. Since the government did not feel it appropriate to pay for the upkeep of improvidents, prisoners were expected to furnish the full cost of their own imprisonment. If they couldn’t, they simply starved to death.
4. If we consider tax responsibilities to be debts, it’s the overwhelming majority—and if nothing else the two are closely related, since over the course history, the need to assemble money for tax payments has always been the most frequent reason for falling into debt.
5. Finley 1960:63; 1963:24; 1974:80; 1981:106; 1983:108. And these are only the ones I managed to track down. What he says for Greece and Rome would appear to be equally true of Japan, India, or China.
6. Galey 1983.
7. Jacque
s de Vitry, in Le Goff 1990:64.
8. Kyokai, Record of Miraculous Events in Japan (c. 822 ad), Tale 26, cited in LaFleur 1986:36. Also Nakamura 1996:257–59.
9. ibid:36
10. ibid:37.
11. Simon Johnson, the IMF’s chief economist at the time, put it concisely in a recent article in The Atlantic: “Regulators, legislators, and academics almost all assumed that the managers of these banks knew what they were doing. In retrospect, they didn’t. AIG’s Financial Products division, for instance, made $2.5 billion in pretax profits in 2005, largely by selling underpriced insurance on complex, poorly understood securities. Often described as ‘picking up nickels in front of a steamroller,’ this strategy is profitable in ordinary years, and catastrophic in bad ones. As of last fall, AIG had outstanding insurance on more than $400 billion in securities. To date, the U.S. government, in an effort to rescue the company, has committed about $180 billion in investments and loans to cover losses that AIG’s sophisticated risk modeling had said were virtually impossible.” (Johnson 2010) Johnson of course passes over the possibility that AIG knew perfectly well what was eventually going to happen, but simply didn’t care, since they knew the steamroller was going to flatten someone else.