What is Debt: After 5,000 Years?
not as bad as activist David Graeber wants us to believe
I’ve been slowly reading Debt: The First 5,000 Years by recently deceased lefty activist David Graeber, anthropologist and leader of Occupy Wall Street.
And after 390 pages he reckons it’s time for a Debt Jubilee, where all debts are canceled. After all, the great imperial states from Hammurabi to Greece and Rome did it, so why not us? And as a guy that had to pay back all his student loans — on an anthropologist’s salary — why not?
Yeah, but don’t we thereby reward the non-industrious poor? Why not, asks Graeber? Hey:
At least they aren’t hurting anyone. Insofar as the time they are taking off from work is being spent with friends and family, enjoying and caring those they love, they are probably improving the world more than we acknowledge.
Actually, he has a point. Down the ages the poor have borrowed just to put the next meal on the table, usually without a hope of repaying.
But guess what, Davey. We already have a form of Debt Jubilee. It is called Bankruptcy Law. I’ve never been in bankruptcy court, but I have heard stories about how the non-industrious poor can game the system a bit when it’s time to declare bankruptcy.
Somehow I do’t think the non-industrious poor would be the main benefactors of a Debt Jubilee. Somehow I think that gubmints and the wokey rich would be the beneficiaries. And the ordinary middle class would almost certainly be hurt the most.
But what is Debt? Graeber says:
A debt is just the perversion of a promise, it is a promise corrupted by both math and violence.
Well, no. I’d say that Debt is what you get after the conversion of face-to-face promises, from the proverbial “I owe you one” in the informal world of the stateless band or tribe or village where everyone knows everyone else, to the economy of strangers in the city. Like everything else in the city, Debt loses the person-to-person intimacy of the companionable village, and takes on the hard edge of paper and bailiffs and dunning letters and the thuggery of the local city gang. And that’s a pity.
But whatabout the poor? It’s a good question. What does happen to the poor in an agricultural village? I doubt if anyone loans them money. They probably get charitable leavings from the lord’s table. Or they are vagabonds on the move, robbing poor David Copperfield on his way to his aunt’s house.
But then government. Graeber makes an interesting point that in the village, down the ages, there is very little money or coinage. People run a tab at the store or the inn, and everyone is expected to balance accounts every quarter day. Metal coinage is very much a feature of governments paying their armies, because with gold or silver coinage there is no question of trust, just checking that the metal is real.
Sir Arthur Wellesley, later Duke of Wellington, paid for supplies in Portugal in gold during the Peninsular War, and the Rothschilds recycled it back to England. It is a good strategy, because farmers typically want to hide their grain and animals from an army that is supplying itself by just pillaging along the route of march like Sherman in his March through Georgia. But hey, when the army is offering gold... And governments are really into the debt thing, and into stiffing the bankers when they can’t afford to pay. That’s why nobles were so eager to deal with Jews. It was easier to stiff them than co-religionist lenders.
Also governments are into hyperinflation when they lose wars. And guess who gets screwed. Seems to me in Germany after World War I it was the ordinary middle class with their money in government bonds and their accounts in Reichmarks at the local bank.
So I’d say to the ghost of David Graeber that the solution to the debt problem is for government to stop their stupid wars and stop handing out the free stuff to their elite supporters, especially with student loans that go to pay the paychecks of millions of university administrators.
And maybe the non-industrious poor would get a job rather than holding up convenience stores and dealing in drugs.