TURMEL: David Graeber's DEBT: The First 5,000 Years Chap01
ISBN: 978-1-61219-129-4
https://www.amazon.com/Debt-Updated-Expanded-First-Years/dp/1612194192/ref=sr_1_2?ie=UTF8
All reports at http://SmartestManOnEarth.Ca/debt5000
JCT: Here is my book report on David Graeber's DEBT: The First
5,000 Years. Usually the quotes I comment on but there are
long stretches of unique material.
DG: Winner of 2012 Bread & Roses Award for Radical Publishing
Winner of 2012 Gregory Bateson book prize, awarded by the
Society for Cultural Anthropology
ISBN: 978-1-61219-129-4
" [Debt] may assume for the Occupy movement the theoretical
importance that Michael Hardt and Antonio's Negri's Empire
(2000) did for anti-globalisation campaigners during the past
decade... SUKHEV SANDHU, THE TELEGRAPH
GRAEBER teaches anthropology at Goldsmiths, University of
London. He is the author of Towards an Anthropological Theory
of Value, Lost People: Magic and the Legacy of Slavery in
Madagascar, Fragments of an Anarchist Anthropology,
Possibilities: Essays on Hierarchy, Rebellion, and Desire, and
Direct Action: An Ethnography. He has written for Harper's,
The Nation, The Baffler, The Wall Street Journal, The
Washington Post, and The New Left Review. In the summer of
2011, he worked with a small group of activists to plan Occupy
Wall Street.
In Time's 2012 "Person of the Year" feature on the
"Protestor," Kurt Anderson wrote that Graeber "nudged the
group to a fresh vision: a long-term encampment in a public
space, an improvised democratic protest village without
preappointed leaders, committed to a general critique-the U.S.
economy is broken, politics is corrupted by big money-but with
no immediate call for specific legislative or executive
action. It was also Graeber, a lifelong hater of corporate
smoke and mirrors, who coined the movement's ingenious slogan,
'We are the 99%.'"
JCT: But the 1% run the money. I participated in the Occupy
Movement from Toronto and a few other cities logged in my
index of videos at http://SmartestManOnEarth.Ca/kotp since
they were protesting what I'd started out protesting three
decades earlier when I was alone:
http://SmartestManOnEarth.Ca/imf82.jpg
CONTENTS
1 On the Experience of Moral Confusion 1
2 The Myth of Barter 21
3 Primordial Debts 43
4 Cruelty and Redemption 73
5 Brief Treatise on the Moral Grounds of Economic Relations 89
6 Games with Sex and Death 127
7 Honor and Degradation, or, On the Foundations of
Contemporary Civilization 165
8 Credit Versus Bullion, And the Cycles of History 211
9 The Axial Age (800 BC-600 AD) 223
10 The Middle Ages (600 AD-1450 AD) 251
11 Age of the Great Capitalist Empires (1450-1971) 307
12 The Beginning of Something Yet to Be Determined (1971-
present) 361
Notes 393
Bibliography 455
Index 493
Chapter One
ON THE EXPERIENCE OF MORAL CONFUSION
P1: debt: noun 1 a sum of money owed. 2 the state of owing
money. 3 a feeling of gratitude for a favour or service. -
Oxford English Dictionary
If you owe the bank a hundred thousand dollars, the bank owns
you. If you owe the bank a hundred million dollars, you own
the bank. - American Proverb
TWO YEARS AGO, by a series of strange coincidences, I found
myself attending a garden party at Westminster Abbey. I was a
bit uncomfortable. It's not that other guests weren't pleasant
and amicable, and Father Graeme, who had organized the party,
was nothing if not a gracious and charming host. But I felt
more than a little out of place. At one point, Father Graeme
intervened, saying that there was someone by a nearby fountain
whom I would certainly want to meet. She turned out to be a
trim, well - appointed young woman who, he explained, was an
attorney - "but more of the activist kind. She works for a
foundation that provides legal support for anti-poverty groups
in London. You'll probably have a lot to talk about." We
chatted. She told me about her job. I told her I had been
involved for many years with the global justice movement -
"antiglobalization movement," as it was usually called in the
media.
JCT: Isn't it appropriate that my UNILETS presentation was
slated to the "Globalization Committee" of the Millennium
Forum.
DG: She was curious: she'd of course read a lot about Seattle,
Genoa, the tear gas and street battles, but... well, had we
really accomplished anything by all of that? "Actually," I
said, "I think it's kind of amazing how much we did manage to
accomplish in those first couple of years."...
JCT: I was at the Battle in Seattle too but I took time every
day to cross the pond to Redmond to picket Bill Gates to set
up a global Microsoft LETS.
http://SmartestManOnEarth.Ca/praybill but he blew his chance
to lead the world out of poverty.
And protested at Washington, Philadelphia, New York, Quebec,
Paris earlier. My reason is to get the message of interest-
free financing out.
P2: "But what was your position?" the lawyer asked.
"About the IMF? We wanted to abolish it."
"No, I mean, about the Third World debt."
"Oh, we wanted to abolish that too.
"they'd borrowed the money! Surely one has to pay one's
debts."
It was at this point that I realized this was going to be a
very different sort of conversation than I had originally
anticipated. Where to start? I could have begun by explaining
how these loans had originally been taken out by unelected
dictators who placed most of it directly in their Swiss bank
accounts, and ask her to contemplate the justice of insisting
that the lenders be repaid, not by the dictator, or even by
his cronies, but by literally taking food from the mouths of
hungry children. Or to think about how many of these poor
countries had actually already paid back what they'd borrowed
three or four times now, but that through the miracle of
compound interest, it still hadn't made a significant dent in
the principal.
JCT: Sure, this is "odious" debt which I am prepared to stiff.
But retired persons pensions funds I'm not.
P3 I could also observe that there was a difference between
refinancing loans, and demanding that in order to obtain
refinancing, countries have to follow some orthodox free-
market economic policy designed in Washington or Zurich that
their citizens had never agreed to and never would, and that
it was a bit dishonest to insist that countries adopt
democratic constitutions and then also insist that, whoever
gets elected, they have no control over their country's
policies anyway.
Or that the economic policies imposed by the IMF didn't even
work. But there was a more basic problem: the very assumption
that debts have to be repaid.
JCT: Some do. Some don't. A debt to help a neighbor back,
sure. To pay interest to use the chips, not when we use our
own.
DG: If a bank were guaranteed to get its money back, plus
interest, no matter what it did, the whole system wouldn't
work.
JCT: It could not work. Never work. Not enough Principal was
created to pay off Principal + Interest, thus creating the
mort-gage death-gamble between debtors.
DG: Still, for several days afterward, that phrase kept
resonating in my head. "Surely one has to pay one's debts."
This was the kind of line that could make terrible things
appear utterly bland and unremarkable. This may sound strong,
but it's hard not to feel strongly about such matters once
you've witnessed the effects. I had. For almost two years, I
had lived in the highlands of Madagascar. Shortly before I
arrived, there had been an outbreak of malaria. It was a
particularly virulent outbreak because malaria had been wiped
out in highland Madagascar many years before, so that, after a
couple of generations, most people had lost their immunity.
The problem was, it took money to maintain the mosquito
eradication program, since there had to be periodic tests to
make sure mosquitoes weren't starting to breed again and
spraying campaigns if it was discovered that they were. Not a
lot of money. But owing to IMF-imposed austerity programs, the
government had to cut the monitoring program. Ten thousand
people died. I met young mothers grieving for lost children.
One might think it would be hard to make a case that the loss
of ten thousand human lives is really justified in order to
ensure that Citibank wouldn't have to cut its losses on one
irresponsible loan that wasn't particularly important to its
balance sheet anyway. But here was a perfectly decent woman-
one who worked for a charitable organization, no less - who
took it as self-evident that it was. After all,they owed the
money, and surely one has to pay one's debts.
For the next few weeks, that phrase kept coming back at me.
Why debt? What makes the concept so strangely powerful?
Consumer debt is the lifeblood of our economy. All modern
nation-states are built on deficit spending. Debt has come to
be the central issue of international politics. But nobody
seems to know exactly what it is, or how to think about it.
P5: In 1895, for example, France invaded Madagascar, disbanded
the government of then - Queen Ranavalona III, and declared
the country a French colony. One of the first things General
Gallieni did after "pacification," as they liked to call it
then, was to impose heavy taxes on the Malagasy population, in
part so they could reimburse the costs of having been invaded,
but also, since French colonies were supposed to be fiscally
self-supporting, to defray the costs of building the
railroads, highways, bridges, plantations, and so forth that
the French regime wished to build. Malagasy taxpayers were
never asked whether they wanted these railroads, highways,
bridges, and plantations, or allowed much input into where and
how they were built.1
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.
JCT: Youtube John Perkins Economic Hitman for his short 2-
minute video on how economic oppression for resources works.
To the contrary: over the next half century, the French army
and police slaughtered quite a number of Malagasy who objected
too strongly to the arrangement (upwards of half a million, by
some reports, during one revolt in 1947). It's not as if
Madagascar has ever done any comparable damage to France.
Despite this, from the beginning, the Malagasy people were
told they owed France money, and to this day, the Malagasy
people are still held to owe France money, and the rest of the
world accepts the justice of this arrangement. When the
"international community" does perceive a moral issue, it's
usually when they feel the Malagasy government is being slow
to pay their debts.
p6: But debt is not just victor's justice; it can also be a
way of punishing winners who weren't supposed to win. The most
spectacular example of this is the history of the Republic of
Haiti - the first poor country to be placed in permanent debt
peonage. Haiti was a nation founded by former plantation
slaves who had the temerity not only to rise up in rebellion,
amidst grand declarations of universal rights and freedoms,
but to defeat Napoleon's armies sent to return them to
bondage. France immediately insisted that the new republic
owed it 150 million francs in damages for the expropriated
plantations, as well as the expenses of outfitting the failed
military expeditions, and all other nations, including the
United States, agreed to impose an embargo on the country
until it was paid. The sum was intentionally impossible
(equivalent to about 18 billion dollars), and the resultant
embargo ensured that the name "Haiti" has been a synonym for
debt, poverty, and human misery ever since.2
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.
JCT: So France kept Haiti poor with the world's help. See
Perkins.
P7: In the 1720s, one of the things that most scandalized the
British public when conditions at debtors' prisons were
exposed in the popular press was the fact that these prisons
were regularly divided into two sections. Aristocratic
inmates, who often thought of a brief stay in Fleet or
Marshalsea as something of a fashion statement, were wined and
dined by liveried servants and allowed to receive regular
visits from prostitutes. On the "common side," impoverished
debtors were shackled together in tiny cells, "covered with
filth and vermin," as one report put it, "and suffered to die,
without pity, of hunger and jail fever."3
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.
JCT: Lose your mort-gage death-gamble, you end up mort.
DG: What is the difference between a gangster pulling out a
gun and demanding you give him a thousand dollars of
"protection money," and that same gangster pulling out a gun
and demanding you provide him with a thousand-dollar "loan"?
JCT: If the borrower gets rich and becomes reputable, you
might get paid back.
P8: Arguments about debt have been going on for at least five
thousand years. For most of human history - at least, the
history of states and empires - most human beings have been
told that they are debtors.4
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.
Historians, and particularly historians of ideas, have been
oddly reluctant to consider the human consequences, especially
since this situation - more than any other - has caused
continual outrage and resentment...
For thousands of years, the struggle between rich and poor has
largely taken the form of conflicts between creditors and
debtors - of arguments about the rights and wrongs of interest
payments, debt peonage, amnesty, repossession, restitution,
the sequestering of sheep, the seizing of vineyards, and the
selling of debtors' children into slavery.
By the same token, for the last five thousand years, with
remarkable regularity, popular insurrections have begun the
same way: with the ritual destruction of the debt records -
tablets, papyri, ledgers, whatever form they might have taken
in any particular time and place...
As the great classicist Moses Finley often liked to say, in
the ancient world, all revolutionary movements had a single
program: "Cancel the debts and redistribute the land."5
JCT: And then let the monopolizing tendency of usury continue
another cycle of slavery.
DG: If one looks at the history of debt, then, what one
discovers first of all is profound moral confusion. Its most
obvious manifestation is that most everywhere, one finds that
the majority of human beings hold simultaneously that (1)
paying back money one has borrowed is a simple matter of
morality, and (2) anyone in the habit of lending money is
evil.
P9: the situation the French anthropologist Jean-Claude Galey
encountered in a region of the eastern Himalayas where as
recently as the 1970s, the low-ranking castes - they were
referred to as "the vanquished ones," since they were thought
to be descended from a population once conquered by the
current landlord caste many centuries before - lived in a
situation of permanent debt dependency. Landless and
penniless, they were obliged to solicit loans from the
landlords simply to find a way to eat - not for the money,
since the sums were paltry, but because poor debtors were
expected to pay back the interest in the form of work, which
meant they were at least provided with food and shelter while
they cleaned out their creditors' outhouses and reroofed their
sheds. For the "vanquished" - as for most people in the world,
actually - the most significant life expenses were weddings
and funerals. These required a good deal of money, which
always had to be borrowed. In such cases it was common
practice, Galey explains, for high-caste moneylenders to
demand one of the borrower's daughters as security. Often,
when a poor man had to borrow money for his daughter's
marriage, the security would be the bride herself. She would
be expected to report to the lender's household after her
wedding night, spend a few months there as his concubine, and
then, once he grew bored, be sent off to some nearby timber
camp, where she would have to spend the next year or two as a
prostitute working off her father's debt. Once it was paid
off, she'd return to her husband and begin her married life.6
JCT: What a way for poor folks to get married.
P10: The Catholic Church had always forbidden the practice of
lending money at interest, but the rules often fell into
desuetude, causing the Church hierarchy to authorize preaching
campaigns, sending mendicant friars to travel from town to
town warning usurers that unless they repented and made full
restitution of all interest extracted from their victims, they
would surely go to Hell.
JCT: Not any more, priests protect the investment of their
congregations by seeking out the highest returns like any
other loansharks.
DG: Looking over world literature, it is almost impossible to
find a single sympathetic representation of a moneylender - or
anyway, a professional moneylender, which means by definition
one who charges interest. I'm not sure there is another
profession (executioners?) with such a consistently bad image.
It's especially remarkable when one considers that unlike
executioners, usurers often rank among the richest and most
powerful people in their communities.
JCT: Morters get rich.
DG: Yet the very name, "usurer," evokes images of loan sharks,
blood money, pounds of flesh, the selling of souls, and behind
them all, the Devil, often represented as himself a kind of
usurer, an evil accountant with his books and ledgers, or
alternately, as the figure looming just behind the usurer,
biding his time until he can repossess the soul of a villain
who, by his very occupation, has clearly made a compact with
Hell.
JCT: Getting your neighbors to fight it out to the economic
death by mort-gage is the height of evils.
P11: In medieval Hindu law codes, not only were interest-
bearing loans permissible (the main stipulation was that
interest should never exceed principal),
JCT: Not the pure Christian and Muslim: Just help me and I'll
help you back later, why do you need a share of my score just
because you're positive and I'm now negative?
DG: but it was often emphasized that a debtor who did not pay
would be reborn as a slave in the household of his creditor -
or in later codes, reborn as his horse or ox. The same
tolerant attitude toward lenders, and warnings of karmic
revenge against borrowers, reappear in many strands of
Buddhism. Even so, the moment that usurers were thought to go
too far, exactly the same sort of stories as found in Europe
would start appearing.
P13: What does it mean when we reduce moral obligations to
debts? What changes when the one turns into the other? And how
do we speak about them when our language has been so shaped by
the market? On one level the difference between an obligation
and a debt is simple and obvious. A debt is the obligation to
pay a certain sum of money. As a result, a debt, unlike any
other form of obligation, can be precisely quantified. This
allows debts to become simple, cold, and impersonal - which,
in turn, allows them to be transferable. If one owes a favor,
or one's life, to another human being, it is owed to that
person specifically. But if one owes forty thousand dollars at
12-percent interest, it doesn't really matter who the creditor
is; neither does either of the two parties have to think much
about what the other party needs, wants, is capable of doing -
as they certainly would if what was owed was a favor, or
respect, or gratitude.
One does not need to calculate the human effects; one need
only calculate principal, balances, penalties, and rates of
interest. If you end up having to abandon your home and wander
in other provinces, if your daughter ends up in a mining camp
working as a prostitute, well, that's unfortunate, but
incidental to the creditor. Money is money, and a deal's a
deal.
P14: the crucial factor is money's capacity to turn morality
into a matter of impersonal arithmetic - and by doing so, to
justify things that would otherwise seem outrageous or
obscene. The factor of violence, which I have been emphasizing
up until now, may appear secondary.
French usurers had powerful friends and enforcers, capable of
bullying even Church authorities. How else would they have
collected debts that were technically illegal?
The way violence, or the threat of violence, turns human
relations into mathematics will crop up again and again over
the course of this book...
The resulting dilemmas appear to be as old as civilization
itself. We can observe the process in the very earliest
records from ancient Mesopotamia; it finds its first
philosophical expression in the Vedas, reappears in endless
forms throughout recorded history, and still lies underneath
the essential fabric of our institutions today - state and
market, our most basic conceptions of the nature of freedom,
morality, sociality - all of which have been shaped by a
history of war, conquest, and slavery in ways we're no longer
capable of even perceiving because we can no longer imagine
things any other way.
P16 Surveys showed that an overwhelming majority of Americans
felt that the banks should not be rescued, whatever the
economic consequences, but that ordinary citizens stuck with
bad mortgages should be bailed out.
JCT: My http://SmartestManOnEarth.Ca talks about interest-free
Central Bank credit cards for all, Quantitative Easing for
Citizens as well as Banks.
In the United States this is quite extraordinary. Since
colonial days, Americans have been the population least
sympathetic to debtors. In a way this is odd, since America
was settled largely by absconding debtors, but it's a country
where the idea that morality is a matter of paying one's debts
runs deeper than almost any other. In colonial days, an
insolvent debtor's ear was often nailed to a post. The United
States was one of the last countries in the world to adopt a
law of bankruptcy: despite the fact that in 1787, the
Constitution specifically charged the new government with
creating one, all attempts were rejected on "moral grounds"
until 1898.12
12. In contrast, England already had a national bankruptcy law
in 1571. An attempt to create a U.S. federal bankruptcy law in
1800 foundered; there was one briefly in place between 1867
and 1878, aimed to relieve indebted Civil War veterans, but it
was eventually abolished on moral grounds (see Mann 2002 for a
good recent history). Bankruptcy reform in America is more
likely to make the terms harsher than the other way around, as
with the 2005 reforms, which Congress passed, on industry
urgings, just before the great credit crash.
The bankers were rescued; small-scale debtors - with a paltry
few exceptions - were not.13
13. The mortgage relief fund set up after the bailout, for
example, has only provided aid to a tiny percentage of
claimants, and there has been no movement toward
liberalization of bankruptcy laws that had, in fact, been made
far harsher, under financial industry pressure, in 2005, just
two years before the meltdown.
To the contrary, in the middle of the greatest economic
recession since the '30s, we are already beginning to see a
backlash against them - driven by financial corporations who
have now turned to the same government that bailed them out to
apply the full force of the law against ordinary citizens in
financial trouble. "It's not a crime to owe money," reports
the Minneapolis-St. Paul StarTribune, "But people are
routinely being thrown in jail for failing to pay debts." In
Minnesota, "the use of arrest warrants against debtors has
jumped 60 percent over the past four years, with 845 cases in
2009.. In Illinois and southwest Indiana, some judges jail
debtors for missing court-ordered debt payments. In extreme
cases, people stay in jail until they raise a minimum payment.
In January [2010], a judge sentenced a Kenney, Ill., man 'to
indefinite incarceration' until he came up with $300 toward a
lumber yard debt."15 In other words, we are moving toward a
restoration of something much like debtors' prisons.
JCT: Note how Jesus warned people to avoid the courts:
COURTS OF JUSTICE
With slavery or death for those who failed in their reports,
It's obvious why Jesus told them to avoid the courts.
Luke 12, verse 57, warns the debtor of the trap,
"You settle with him out of court or you will do the rap.
The magistrate will turn you over to the jailers who,
Will keep you chained until you've paid the last penny due."
The problem is how long it takes for one who is in jail,
To earn the money necessary to fulfill his bail?
Christ used this clever way make us see how slavery,
Is caused by debts that have exploded due to usury.
http://SmartestManOnEarth.Ca/allpoems.txt
P18: How many times have we been told that the advent of
virtual money, the dematerialization of cash into plastic and
dollars into blips of electronic information, has brought us
to an unprecedented new financial world?
JCT: Only for those of us who seize the opportunity to run our
own new financial world with our own new financial chips.
DG: there's nothing new about virtual money. Actually, this
was the original form of money. Credit system, tabs, even
expense accounts, all existed long before cash. These things
are as old as civilization itself. True, we also find that
history tends to move back and forth between periods dominated
by bullion - where it's assumed that gold and silver are money
- and periods where money is assumed to be an abstraction, a
virtual unit of account. But historically, credit money comes
first, and what we are witnessing today is a return of
assumptions that would have been considered obvious common
sense in, say, the Middle Ages - or even ancient Mesopotamia.
JCT: Bingo. Greatest discovery of this book: "In-head LETS"
allowed people to create their own credits without any
national banks like we do with our computers or
http://SmartestManOnEarth.Ca/unilets printed DIY P2P notes.
DG: But history does provide fascinating hints of what we
might expect.
JCT: No need, just read the reports on the effects of LETS
already published over the past 33 years.
DG: The new age of credit money we are in seems to have
started precisely backwards. It began with the creation of
global institutions like the IMF designed to protect not
debtors, but creditors. At the same time, on the kind of
historical scale we're talking about here, a decade or two is
nothing. We have very little idea what to expect.
JCT: A global network designed for debtors and creditors isn't
so hard to imagine. Game Theory has already been used to pick
the winning "poker chips" model.
I return to the question of the origins of money to
demonstrate how the very principle of exchange emerged largely
as an effect of violence - that the real origins of money are
to be found in crime and recompense, war and slavery, honor,
debt, and redemption.
an actual history of the last five thousand years of debt and
credit, with its great alternations between ages of virtual
and physical money.
JCT: So using abundant clay or papyri credits always seemed to
work out fine and using scarce metal credits always seemed to
enslave the users.
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