David Graeber is a Reader of Anthropology at Goldsmith’s, London, and a left-wing political activist. His most recent book, Debt: The First 5000 Years, has just been published in the UK. It looks at the evolution of debt as both a moral and an economic concept, drawing on anthropological evidence from a wide range of societies, both contemporary and historical.
I met up with David to discuss some of the arguments in the book. In the first of a two-part interview, he examines how the language of morality became the language of debt, and how our basic moral and legal concepts have been profoundly shaped by a history of war and slavery.
In a recent column criticising right-wing Republicans for being cavalier about possibility of default, David Brooks made the following comment:
“The members of this movement [i.e. Tea Party Republicans] have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor.”
This intertwining of the language of debt with that of morality is a main theme of your book. Could you talk a bit about its history?
The idea that ‘honour’ and ‘credit’ are the same thing occurs in situations in which people are trading with each other directly. If there is some kind of market, and debts are denominated in money, but you can’t haul someone off to jail or break their legs if they don’t meet their obligations, then to operate successfully as a business your honour is your greatest resource. In medieval Arabic law - Sharia law – credit was capital: your personal honour was a form of capital, and was legally recognised as such. So Brooks’s comments aren’t as crazy as all that, because states actually can’t force each other to pay.
But there is an irony in thinking of a promise made by a state to pay a debt as something absolutely sacred. After all, a debt is just a promise, and politicians make all sorts of different promises. They break most of them. So why are these promises the only ones that they can’t break? It is considered completely normal for someone like Nick Clegg to say, ‘well of course we promised not to raise school fees. But that’s unrealistic.’ ‘Unrealistic’ here means ‘obviously there’s no possibility of breaking my promises to bankers, even those linked to banks we bailed out and in some cases effectively own’. It’s striking that no-one ever points that out. Why is a promise made by a politician to the people who elected him considered made to be broken – it isn’t “sacred” in any way – whereas a promise the same politician makes to a financier is considered the “honour of our nation”? Why isn’t the “honour of our nation” in any way entailed in keeping our promises to people to provide healthcare and education? And why does everyone just seem to accept that, that this is just “reality”?
And why do you think that is?
Because the latter promises are not typically framed in the language of ‘debt’. The language of debt is not an economic one; it’s a language of morality. It has been used for thousands of years by people in situations of vast inequalities of power. If you have a situation of complete inequality, particularly violent inequality – if you’ve conquered someone, or if you’re a mafioso extracting protection money – then framing the relationship in terms of debt makes it seem as though the extractors are magnanimous and the victims are to blame. “Well, you owe me, but I’ll be a nice guy and let you off the hook this month…” Before long the victims come to seem almost generically morally at fault by the very terms of their existence. And that logic sticks in people’s minds – it’s incredibly effective. Not universally effective, because it’s also true that the vast majority of revolts, insurrections, populist conspiracies and rebellions in world history have been about debts. When it backfires, it blows up in a big way. But nonetheless, that’s what people almost invariably do when they’re imposing a situation of complete inequality.
The irony of course is that when dealing with each other, rich and powerful people know that debts aren’t “sacred”, and they rearrange things all the time. They are often incredibly forgiving and generous when dealing with each other. The idea of the sacredness of debt is chiefly applied when we are talking about different sorts of people. Just as rich people will come to the aid of other rich people, so poor people also will bail each other out – they’ll make ‘loans’ that are really gifts, and so on. But when you’re dealing with debts owed by people without power to people with power, suddenly the debt becomes sacred and you can’t even question it.
The concept of credit-worthiness, the perception that you will be good for your money, is perhaps a good explanation for why, when powerful institutions or people owe money to other powerful institutions or people, they are so reluctant to default. Hence the weight given to the judgements of ratings agencies like Moody’s and S&P.
It’s interesting to trace it backwards, because the predecessors of the ratings agencies are essentially the institutions by which the financial capitalist classes first won their autonomy from the European princes who used to be able to push them around and routinely expropriate them. First they had to find independent power bases like the Hanseatic League and the Italian city states, where they had their own courts and armies. Then they formed a common front. I believe it was Philip II who first came up against this: he tried the old medieval expedient of simply defaulting on one of his loans when he was in the middle of a military campaign, and all of the major bankers in Europe told him, ‘you’re not getting credit from any of us unless you cut that out’. That was a key moment, that sudden unity of these people who were supposedly all competing with each other. Well, they were competing with each other, but in the face of an external power, they formed a common front. And that’s essentially what credit ratings agencies are: they are a form of political power exercised by certain extremely powerful social classes.
What’s the main argument of your book?
There’s a series of them. One is just what we’ve been discussing. What is a debt? A debt is a promise that has been perverted by mathematics and violence, and the book examines the history of how that happens. History has done this strange thing to us: we associate things like war and slavery with the ancient world and imagine that they have no contemporary relevance to our lives. But in fact that history of violence has completely transformed the way we think, so that our commonsense political and economic logic has been completely reshaped. All of these things have been shaped much more by violence and military operations than we’d ever imagine, to the point where I think we’re going to have to start thinking in dramatically new terms to even come up with a realistic idea of what a free society would be like. If “freedom” is the ability to make real promises, then, what sort of promises would free women and men make to one another? How would they be kept? We hardly know what it would even mean to start asking these questions, but in order to find out, we need to clear away a lot of the conceptual legacy of millennia of war, slavery, and debt, that keeps us from being able to find out. That’s not the explicit message of the book, but it’s one of the things I was really trying to convey.
Let’s look at the historical development of our conceptions of “liberty”, then.
That was something I had been vaguely aware of, but I hadn’t realised, until I began researching, just how flagrant it was. In most human languages, the word for ‘freedom’ means ‘the opposite of slavery’. Moses Finley pointed out a long time ago that it’s not a coincidence that doctrines of political liberty tend to emerge from places where they have the most extreme forms of chattel slavery, whether it’s ancient Athens or colonial Virginia, where Thomas Jefferson came from. But this is true on a much more profound level than I had ever imagined. In most societies a slave is essentially like the living dead: as a social person they’ve been killed. The idea is that they are someone who was captured in battle, their captive decided not to kill them (which he would have had every right to do), so essentially their previous life is gone and all they have left is a relation of total subordination to the person who was within his rights to kill them.
And they’re ripped from their social context.
Yes. So if you’re a Roman taken prisoner of war and held as a slave elsewhere, and then you come home again, you have to remarry your wife, you have to enter into all contractual relations over again, because you were effectively dead.
This helps to explain something really strange about our property law, which is derived from Roman law and has created terrible problems for jurists starting in the eleventh century. Our definition of property is that property is a relation between a person and a thing, whereby that person has absolute power over that thing. This definition doesn’t make sense. For example, if you’re on a desert island, you might have a deeply personal relationship with a tree on that island. You might well be talking to it every day. But do you ‘own’ it? Well, it’s kind of an irrelevant question unless someone else is there. In fact, property rights are relations, or arrangements, between people, about things.
Our notion of freedom is similarly problematic. ‘Freedom’ is the natural power, according to Roman law, to do absolutely anything you like – except for those things you can’t do, either because of the law or because somebody’s going to stop you. This is like saying that ‘the sun is square except insofar as it is round’. And people immediately pointed this out: by this definition, everyone is ‘free’. Slaves are ‘free’ – after all, they can do anything they want except for those things they can’t do. So why did they develop this absurd definition?
The reason is that what Roman magistrates were imagining was in fact a relationship between two people of total power, which therefore renders one of them a ‘thing’. That’s what slavery is all about. So you had this subtle shift in the meaning of freedom. Originally freedom meant ‘not being a slave’, and so referred to people who had social relations. In fact the word ‘free’ in English traces back to the same root as ‘friend’ – free people are, as noted before, people who can make commitments and promises to others, which of course slaves cannot do. But then the definition shifts, so that it now refers to the power of the slave-owner. A ‘free’ person becomes a person who has people they can do anything they want to, or who approaches the world as a set of properties in the same way – someone who has a personal private domain, within which they can do whatever they like. This definition has the advantage of not suggesting that freedom is unlimited except insofar as it is circumscribed. But it brings all these deeply perverse and contradictory notions into it: that freedom is not a product of social relations, but is in fact the negation of social relations. That has had a deeply insidious effect on how we look at the world.
I was interested in the passage in the book where you discuss “dualism” as an attempt to cobble together a philosophical account that could make sense of this odd Roman conception of property rights.
Yes, indeed. Because another one of the paradoxes becomes conceptual: in natural rights theory, as in Roman property law, freedom is your ability to do anything you like within your domain of private ownership. Well, if ‘freedom’ is essentially property rights, and if the entire world is seen in terms of property rights, then your first and most elementary property is your own body, your own person. C. B. MacPherson pointed this out long ago: all notions of natural rights and liberties begin with your own private property rights over yourself, your right to forbid others (even governments) to “trespass” upon your person, your house, your possessions. But if human rights are founded on your property rights over yourself, and property rights are modelled on slavery, that means you are both master and slave at the same time. Well, how does that work? It obviously doesn’t make any sense. That, it seems to me, is why we are so determined to create a division between the mind and the body, because it offers a way of imagining our mind as the ‘master’ and our body as the ‘slave’. This idea is a response to the way we chose to define ‘freedom’ in law.
The other paradox of course is that freedom itself is seen as something one ‘has’ – as a form of property. So freedom both is the ability to own things, and is also something you own. How does that work, and why would anyone want to formulate freedom as the right to own your freedom? It sounds like an infinite regression. Medieval law, for example, and any commonsense approach, would assume that my right is somebody else’s obligation, and vice versa. So if I have the right to trial by jury, that means you have the obligation to do jury duty. This makes sense in practice. Why do we instead imagine our rights as property? And especially our freedom as property?
If you trace it back, the people who really push that line consistently are not those who wanted to increase human liberty, but those who wanted to limit it – the people who believed in the absolutist state, for example. (Hobbes is the classic example.) Because if freedom is the ability to own your freedom, well, something you own, you can sell, you can rent, you can give away. It’s alienable. Similarly people who wanted to defend slavery were very much into natural rights theory.
The Declaration of Independence, written by Thomas Jefferson, a great libertarian slave-owner, begins by apparently subverting the very idea that something like slavery could be possible, declaring – and he got in trouble for this – that ‘we are endowed with certain inalienable rights’. This means that we own these things, but we can’t sell them. Nonetheless, it keeps the language and the logic of natural rights theory entirely intact. As a result, any attempt to actually apply it consistently creates endless paradoxes. I am convinced that if you took the average American and asked them to defend the argument that slavery should be illegal, they would find it very difficult to do. They would all assert that, yes, of course it’s wrong to own people, but if you pressed them on why, and used an example – well, we have prisoners sentenced to life without parole, and often prisons rent prisoners’ labour to local farms or companies. Why not sell them? – they probably couldn’t come up with a reason. Because the logic of our commonsense about law and freedom and liberty makes it difficult to object to the institution.
So this language of rights and self-ownership has been appealed to mainly by people wanting to limit freedom?
Yes, to come up with excuses for the slave trade. That was the argument. It’s interesting to point out, because ancient slavery was not, for the most part, based on any idea of ‘race’ or ethnic superiority. Anyone could become a slave – it was just bad luck. If you were captured in war, you became a slave. One claim you often hear is that in the ancient world nobody condemned slavery as an institution. I don’t think that’s true. I think everybody thought it was wrong. If you look at Roman law, one of the first things you learn in the first year, if you’re a Roman law student, is the definition of slavery, which is: ‘slavery is an institution according to the law of nations whereby one person falls under the property rights of another, contrary to nature’. It’s assumed to be unnatural and wrong. I think people thought of slavery in exactly the same way we think of war. Slavery was seen as a natural result of war: of course, people will go to fight in wars, some of them will surrender and become captives, and that’s just how it is. The question of whether it is right or wrong – well, yes, of course, it would be great if we could get rid of war. War is bad, so is slavery. But get real. That’s pretty much how people feel about war now, and that’s pretty much how people felt about slavery in antiquity.
The reason I bring this up is that one finds exactly the same thing in the very early period of the modern slave trade, before the elaboration of modern racial theories. They didn’t say ‘Africans are inferior, therefore they don’t really have civilisation, therefore it’s OK to drag them off’. Actually they made the opposite argument. They said that African institutions are as legitimate as ours, and so most of these people might well have been legally enslaved. Since all nations recognise that we have certain liberties and hence the right to sell those liberties, they might have sold themselves, or someone who had the legitimate right to sell them might have sold them—their parents, someone who captured them in war, a judge who convicted them of a crime. Sure, some of them might have been illegally enslaved, but abuses happen in every system, and the point is that slavery itself is a legitimate institution in Africa that rests on universal legal principles. It was this kind of mock universalism that originally justified slavery.
And historically has opposition to slavery rejected the language of rights, or has it tried to, as in the Declaration of Independence, appropriate it?
It went in different directions, but overwhelmingly the natural rights people won out. So you end up with the kind of writing under erasure that I described, where you start with Roman law terms and then you try to make them imply the opposite of what they were originally formulated to imply. It’s very much like the language of debt and morality. If say a subject population is told, ‘you owe us something (for not having killed you when we conquered you a century ago)’ – which is very similar to the argument made for slavery – then it’s almost impossible to come up with a reply that doesn’t take the form of, ‘wait a minute, who really owes what to who here?’ But as soon as you say that, you are accepting that debt is morality, that moral obligations are best framed as matters of debt— suddenly you are using the conqueror’s language. I would suggest that this has been happening constantly, throughout history.
That’s why you see, in so many of the ancient moral and religious texts, a strange duality, an internal tension, whereby people on the one hand feel obliged to use the language of debt (Sanskrit, Hebrew and Aramaic all use the same words for ‘debt’ as for ‘sin’) but at the same time, they start that way and then they say, ‘well, except not really’. They feel obliged to frame it as a matter of debt, and then they have to deconstruct the notion of debt and conclude that of course in reality what is sacred aren’t your debts but rather the ability to forgive debts (redemption). The realisation that debt is meaningless.
I suppose for a more contemporary example of that kind of internal tension about ‘debt’ and ‘honour’ one can look to the old English aristocracy, which on the one hand looks down on ‘new money’ and the market generally, but on the other hand does have this notion that an honourable man ‘pays his debts’. So, do you think the tension in our understanding of the morality of debt that was present in ancient texts remains unresolved? Does it remain a source of moral confusion?
Absolutely. The remarkable thing is just how consistent it is. People have been asking the same question for thousands of years. I always draw attention to Plato’s Republic, in which the whole Western political tradition, in a sense, starts with the question “What is justice?” “Well, it’s paying one’s debts. No, that doesn’t work – let’s try something else then…” The ‘honour’ formulation is one example of the tension. On the one hand, it does mean you pay your debts – not because you take them seriously, but because you’re committed to something higher. On the other hand it implies, in other contexts, absolute contempt for the entire commercial system that says that you would pay your debts (and lots of aristocrats don’t!).
OK, let’s examine debt more closely. To do that, we first have to look at money. What definition of money do you work with in the book?
There are two major schools of thought on this within economics. The orthodox or mainstream school assumes that money emerges as, and essentially remains a medium of, exchange. That’s how you get the classic ‘myth of barter’, as it’s sometimes called: once upon a time there was a little village, and everybody traded things directly with each other. “I’ll give you twenty chickens for that cow”; “oh, you don’t need chickens, well, what do you need?”; etc. Pretty much every economics textbook opens its section on money with this. And if I don’t have anything you want, I can’t get what you have; this is a problem; eventually we settle on something that everybody is going to want; and because that becomes the medium of exchange there is a virtuous circle in which people want it even more, money emerges, and eventually credit develops out of that.
There is a problem with this story. It assumes that everybody in a little village will be engaging exclusively in what economists call the “spot trade” – I give you something right now, you give me something right now, and we walk away. But of course that’s silly. If your neighbour has something you want, even if you don’t have something they are going to want now, he’s your neighbour and you’re going to have something he wants eventually. So what would really happen in that situation is a credit system. So the other school of economists begins with the idea of credit, and emphasises money’s role as a unit of account. Money is a way of measuring debts. That’s a sort of Chartalist school account – there are various other strains: credit theories of money, state theories of money, and so on. Money starts as a unit of account, and so it’s not something that necessarily has to be physically there.
So money in this sense is a like a ‘centimetre’, or a ‘litre’.
Exactly. There is a famous line by Mitchell Innes: ‘[the] eye has never seen, nor the hand touched a dollar’. Any more than it has touched an inch, or an hour. So money is a unit of measurement of value, but value as realised in credits and debts.
What’s interesting is that within the field of economics these guys are considered cranks, and they’re very marginal in mainstream economics. But among archaeologists and historians, conversely, they tend to be the dominant strain, because all actual evidence we have suggests that they’re right. In fact coins are invented thousands of years after money begins, and people were already using expense accounts and talking about compounded interest rates long before there were actual coins or even, as far as we know, before there were circulating lumps of silver in transactions. One fact that really impressed me is that even though the Sumerians had the technological capacity to do so, they did not make scales accurate enough to weigh out the amounts of silver that would have been required to buy typical consumer goods.
So if credit preceded hard currency, why was hard currency developed?
The emerging consensus among historians over the last ten years is that markets based on the use of actual bullion or currency in daily transactions are almost everywhere a side-effect of war. If you think about this, it makes sense. Why did they choose gold and silver as the universal currency of exchange? Well, gold and silver were the sort of things that soldiers were most likely to have a lot of on hand, since that is the easiest and most valuable thing to carry off if you’re looting and pillaging somewhere. But on the other hand, a soldier is the last person you’re going to want to extend credit to, since they are heavily armed and just passing through. So, soldiers wants of stuff (marketplaces always formed around an army), and they’ve got lots of these bits of precious metal; it makes sense that that’s where cash markets would emerge.
What seems to have happened is that states started systematizing the division of the loot into uniform pieces, eventually making them into coins. Then – and this is the big trick – they demanded those coins back, in taxes. One of the great mysteries, if you take the Adam Smith theory of the origin of money (that it arose from the inconveniences of barter), is, why did ancient kings want taxes at all? If gold and silver were naturally money, why not just grab the gold and silver mines directly and keep all of it? Indeed that is in fact what they did, so what’s the point of taking the gold that you already own, stamping your picture on it, handing it out and then saying, ‘OK, everybody, give it back’? The only logical explanation is that they were trying to create a market, and that also explains who they were giving it to. One of the big problems in the ancient world was how to feed one’s army. You have 50,000 people sitting around, and they’re going to eat pretty much anything standing in the area within about three weeks. How do you feed them? The easiest solution is to give the soldiers these metal coins and say, ‘OK, everyone in the kingdom is required to give me one of these coins’. Suddenly the whole population has to figure out a way to give the soldiers what they want in exchange for the coins. So you’re effectively employing your entire kingdom to feed your soldiers. Commercial markets are essentially, then, a by-product of military operations by states.
Jamie Stern-Weiner studies politics at Cambridge, and is co-editor of New Left Project. Thanks to Samuel Grove for help with editing.