Thursday, August 18, 2011

Debt Is When Math and Violence Pervert a Promise

Book Review of Debt: The First 5,000 Years by David Graeber

Debt: The First 5,000 Years is precisely what its title suggests: a wide-ranging exploration of the recorded history of debt. Which may sound a bit abstract, until one remembers that it was debt that nearly destroyed the entire global economy we all inhabit a few years ago. And it may sound a bit impersonal, until one remembers that personal debt is at historic levels. Actually, what it may seem is morose, depressing. What would be the value of such an exploration? What insights might it lead to?

Well, it might lead to "that great embarrassing fact that haunts all attempts to represent the market at the highest form of human freedom: that historically, impersonal, commercial markets originate in theft. [...] 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."

In this book, Graeber reveals the way in which the ancient concept of "obligation" was piggybacked upon by the modern capitalist idea of "debt". That is, it reveals how a very ancient concept with deep cultural and psychological roots, which is intertwined with our sense of morality, has mutated into a very different, fundamentally different modern concept. The ancient concept is "obligation", the sense that we owe everything to our community, without which our lives would be completely impossible; and specifically, the sense that we are obligated to be generous to those who have been (or would in the future be) generous to us. The modern concept is "debt", which exists in forms of varying similarity to the ancient concept: from the very obligation-esque loan from a friend or family member, to the multi-billion dollar junk bond or derivative instrument. Personal, one-to-one, community feelings of obligation and mutual support were transmuted in and appropriated by our modern capitalist system, a system which is a total mismatch to the environment in which such feelings first arose and evolved.

In my estimation, there is a significant degree of similarity between Graeber's anthropological project and the mission of evolutionary psychology. In evolutionary psychology, attempts (of wildly varying success) are made to show how the several-hundred-thousand years during which homo sapiens evolved as hunter-gatherers in the savannas of Africa shaped our psychology. Evolutionary psychology explains phenomena like our taste for salty, sweet and fatty foods: in the environment our species evolved in, salt, sugar and fat were hard to come by, and their presence in a food source in the African savannas would indicate that it was nutrient-rich and healthy; hence, part of the reason for today's widespread consumption of junk foods that are nutrient-poor and unhealthy.

With that being said, this book makes no claim that the concept of debt is genetically hard-wired into our species. What it does explain, however, is that the concept of debt is at least as old as recorded history. This is important for two reasons. First, it strongly suggests that the modern incarnation of debt can only be fully understood by looking at its roots; which, being roots, must still comprise a significant portion of the whole. Second, it exposes as a myth the "history" of money that is a cornerstone of economics today. (By "economics", I mean only the dominant paradigm within economics today, the neoclassical school, which I refer to as "theoclassical economics" for its similarities to fundamentalist religion.)

Before I get into the mythology of economics, a bit of history: before Adam Smith, the reigning paradigm in economics was the theory that each nation should strive to export more than it imported, enriching itself from inflows of precious metals as it progressively improved its technology and productivity. Adam Smith and other laissez faire economists led an overthrow of that paradigm, at least within England, leading to a new paradigm of free trade (now called "classical") economics: the belief that by minimizing governmental interference in the realm of economic activity, the most economically advanced nation, England, would maximize its power and wealth. This belief was proselytized, with varying degrees of success (more in Portugal, less in Germany and the United States), by a key modification: that free trade would benefit all nations, not just the most economically advanced. Karl Marx then came along and postulated that the next logical step from classical economics would be socialism, because the way capitalism under classical economics worked would inexorably lead to the overthrow of capitalists and the birth of a worker-led global economy. For obvious reasons, this idea was anathema to those who profited from the contemporary economic system, and it did not take long for economics to retreat from the intellectual lineage that Marx had corrupted with his contribution. The neoclassical school was born in this retreat, which attempted to resituate the classical economics of Adam Smith within a realm of simplified mathematical models of the economy on a microscopic scale. Rather than examining national and global economics, neoclassical economists zoomed in to the individual level, assuming that self-interested rationality governed all choices, and then made national and global policy prescriptions based on their unscientific models of how individuals made economic choices. Their models suggested that the aggregate of individual economic choices would result in the best outcomes for all, if only governments would allow individuals to choose freely. The policy prescriptions of neoclassical economics gave immediate benefit to already rich individuals and the already technologically advanced countries, while promising deferred benefits to the poor and developing nations. (Their policy prescriptions were rejected by the governments of successful developers like the United States and Germany during their periods of development.)

The Great Depression was nothing less than a mindfuck to the then-dominant neoclassical paradigm. According to the neoclassical economists, it should not have happened, or at least it should not have lasted for as long as it did. What should have occurred, according to the orthodox view, was a corrective period during which wages would drop to the level at which capitalists would be willing to begin investing and hiring en masse, and then the whole economy would begin growing again. That did not happen. Instead, what finally ended the worldwide depression was massive government spending, creating credit upon sovereign debt, for the war. These real-world events powerfully shook the economics academy into breaking from neoclassical orthodoxy, at least a bit, towards a view of the economy as needing government intervention to fix serious, inherent flaws.

Fast forward a few decades, and the neoclassical paradigm has arisen again like a zombie. And along with it, Adam Smith's mythology of the origins of human economy.

As Graeber explains, Adam Smith claimed that human economies were first based on barter; then, someone decided to introduce coins to make things simpler; then governments decided to take over the currency business, issuing their own currencies and regularly screwing things up by spending too much and causing inflation. Since this core myth still survives, it is easy to see how the contemporary debate over deficit spending assumes that governments which issue their own currencies are nonetheless subject to the same kinds of budgetary constraints that keep individuals from spending beyond their means.

Yet, a myth is a myth. Governments which issue their own currencies are not strictly subject to the same constraints. To begin to understand why, we must begin by replacing myth with history.

"[O]ur standard account of monetary history is precisely backwards. We did not begin with barter, discover money, and then eventually develop credit systems. It happened precisely the other way around. What we now call virtual money came first. Coins came much later, and their use spread only unevenly, never completely replacing credit systems. Barter, in turn, appears to be largely a kind of accidental byproduct of the use of coinage or paper money: historically, it has mainly been what people who are used to cash transactions do when for one reason or another they have no access to currency."

Credit (and the flip side of the coin, debt) did not arise only after coinage; it has existed in countless forms since (and doubtlessly before) the beginning of recorded history. Most likely the first form in which it existed was in what Marx called primitive communism: the interdependence of hunter-gatherer tribes, each member of which would both expect to help and be expected to help everyone else in the group. This is undoubtedly the first form of credit and debt to emerge. It is just another way of conceptualizing the sort of altruism that characterizes our species, and which gave early evolutionary theorists such a headache ("how could it be that there is so much altruism in our species, when our evolution is supposed to be governed by survival of the fittest? Shouldn't those who betray the altruists for their own benefit out-compete, and eventually completely replace, them?"). This sort of in-group altruism is pithily summarized by an anecdote from the Greenland Inuit, one of whom was thanked profusely by a hungry Danish writer who had been given a gift of walrus meat by one hunter:
"Up in our country we are human!" said the hunter. "And since we are human we help each other. We don't like to hear anybody say thanks for that. What I get today you may get tomorrow. Up here we say that by gifts one makes slaves and by whips one makes dogs."
Or, by whips one trains dogs, and by gifts one trains slaves. In other words, in this hunter-gatherer society, each member was expected to behave altruistically to everyone, without expectation of recompense in any form. A gift for which one expects thanks or repayment is a form of debt; and debt creates slaves.

So first, a form of reciprocal assistance emerged. Then, as human groups grew larger and more divorced from their kin-group beginnings, the ties that bound kin groups together evolved to support a much larger superstructure. A sense of altruism emerged within homo sapiens which formed a key role in supporting kin group bonds. These bonds were the basis that allowed early humans to organize into tribes, in which each member would work for the benefit of the other members, even though fairly extensive interbreeding with other tribes would have minimized the actual genetic relationship between members. But how could this happen? Altruism itself, even when practiced solely within families, was extremely difficult for early evolutionary theorists to explain. After all, would not the most ruthless, back-stabbing individuals out-compete and out-breed their more altruistic kin, leading to a race of selfish individualists who would never sacrifice an eyelash for anyone?

But as evolutionary biologist Robert Trivers showed, it is perfectly reasonable that altruism within kin groups would have evolved. After all, self-sacrifice for those who share a healthy percentage of one's own genes can very well increase the longevity of those very genes. That much is clear. That much fits within the umbrella of natural selection. But what could account for much larger groups of humans, who share far less genetic similarity, cooperating among each other as if they shared a substantial percentage of genes? That, it would seem, cannot be explained by genetic evolution on its own. It would seem, rather, that ideas whose existence was predicated upon kin-group solidarity themselves evolved, and provided the basis upon which much larger, non-kin-group organizations could develop. The evolution of ideas is something we are all very familiar with, even if we rarely systematically examine the process - we are familiar with the evolution of baseball from the basis of cricket, the evolution of rock 'n' roll from the blues, the evolution of World of Warcraft from Pong, and so on. In much the same way, altruism within artificial groups (like 'my people', 'my nation') could not evolve without the ideas that grew inside the minds of those who had evolved to behave altruistically to members of natural, genetic kin groups.

And central among the ideas that grew along with the formation of kin groups must have been the idea of debt. Only, back when it first emerged, "debt" probably looked nothing like our modern conception of the idea. When it first emerged, "debt" would have been more like our modern conception of "obligation", in the same way that we feel like we "owe", "are obliged to", or "should" provide care to our parents and relatives, who cared for us in our youth. This ancient form of "debt" can very easily be understood as the cornerstone of a bond that allowed large-scale cooperation to evolve in the first place: it is as if to say, "everyone in my group will help me, therefore I will help everyone else in my group because I owe them one."

The evolution from ancient to modern conceptions of debt did not occur seamlessly. Or painlessly. As modern ideas of debt emerged from their ancient counterparts, traditional social relations were torn apart. For instance, as horribly patriarchal as many early societies were, and as much control husbands were given over their wives:
"[a] Mesopotamian husband couldn't sell his wife [...]. Or, normally he couldn't. Still, everything changed the moment he took out a loan. Since if he did, it was perfectly legal - as we've seen - to use his wife and children as surety, and if he was unable to pay, they could then be taken away as debt pawns in exactly the same way that he could lose his slaves, sheep, and goats. What this also meant was that honor and credit became, effectively, the same thing: at least for a poor man, one's creditworthiness was precisely one's command over one's household, and (the flip side, as it were) relations of domestic authority, relations that in principle meant ones of care and protection, became property rights that could indeed be bought and sold."
The first human societies would disallow the selling of one's wife or children as if they were handicrafts in a marketplace. One may be obligated to provide for the larger community as a condition for membership, but one would never have to pledge one's family members as slaves in exchange for any benefit the community might give. But the more newly-evolved concept of debt did allow a man to offer his wife or children as collateral for a loan - not quite the same as a simple sale, but potentially having the exact same effect. In the first human social environments, to someone who helped you in a material way you would only feel the obligation to continue to be willing to help that person out - but as time went by, and social organizations grew much larger and evolved conceptions of "debt", you would feel a sense of obligation much more specific and temporal, tied to a particular item and lasting for a specific period of time. This new concept of social obligation as "debt" also, as slavery shows, could be profoundly inhuman.

As markets developed and societies grew larger, and it became impossible to know each and every member of one's in-group, obligation-as-debt came to completely destroy social bonds for the unluckiest. A farmer forced to take out a loan and unable to pay it back due to drought or an unfavorable market might be forced into slavery, or to sell his family members into slavery. (In fact, in ancient Greece it was an aristocratic rebellion against these terrible outcomes of the marketplace that led women to be veiled and shut up in the house, to keep them from the market-infected values of the public sphere.) Hence, when it first emerged as an impersonal market mechanism, "debt" was feared due to its sinister ability to exile people from their communities and rob them of their freedom:
"As everywhere in the ancient world, to be 'free' meant, first and foremost, not to be a slave. Since slavery means above all the annihilation of social ties and the ability to form them, freedom meant the capacity to make and maintain moral commitments to others. The English word 'free,' for instance, is derived from a German root meaning 'friend,' since to be free meant to be able to make friends, to keep promises, to live within a community of equals. This is why freed slaves in Rome became citizens: to be free, by definition, meant to be anchored in a civic community, with all the rights and responsibilities that this entailed."
Interestingly, around 600 AD, human nature began to rebel against this most drastic consequence of the concept of "debt", and all around the world, "over the course of centuries, amidst much unrest and confusion, chattel slavery largely ceased to exist." Although the intellectual justification for slavery as the natural consequence of unpaid debts remained in place, it inspired such revulsion in people that it was extinguished in most parts of the world. Or, elaborate new theories were invented to justify its re-adoption: "[i]t is one of the great ironies of history that modern racism - probably the single greatest evil of our last two centuries - had to be invented largely because Europeans continued to refuse to listen to the arguments of the intellectuals and jurists and did not accept that anyone they believed to be a full and equal human being could ever be justifiably enslaved."

So just what is this concept of debt, this mutation of an original sense of mutual obligation within the small societies in which we as a species spent most of our time evolving?
"A debt ... is just an exchange that has not yet been brought to completion. [...] It follows that debt is strictly a creature of reciprocity and has little to do with other sorts of morality [...] Debt is a very specific thing, and it arises from very specific situations. It first requires a relationship between two people who do not consider each other fundamentally different sorts of being, who are at least potential equals, who are equals in those ways that are really important, and who are not currently in a state of equality... This is what makes situations of effectively unpayable debt so difficult and so painful. Since creditor and debtor are ultimately equals, if the debtor cannot do what it takes to restore himself to equality, there is obviously something wrong with her; it must be her fault. [...] This connection becomes clear if we look at the etymology of common words for 'debt' in European languages. Many are synonyms for 'fault,' 'sin,' or 'guilt;' just as a criminal owes a debt to society, a debtor is always a sort of criminal."
Or, to be more accurate, is considered to be a sort of criminal. Someone who shirked one's obligations to a traditional, small human society might do so in the form of murdering a community member, or hoarding community resources, among other things; and this would make one a criminal. But as the modern concept of debt emerged, it piggybacked upon the idea of transgressions against the community and came to be considered nearly criminal in its own right. This is a glaring error. The modern concept of debt only emerged once societies had grown large enough to create faceless, impersonal marketplaces; and the sense of obligation, from which debt arose, is at home only in small societies whose members would each have had a personal relationship with every other member. In a large, impersonal marketplace, having a personal relationship with everyone else is an impossibility; hence, it makes no sense to apply the morality of small societies to it. To do so is to commit a category error. And yet today, we still apply our ancient sense of morality to the new, fundamentally inapplicable concept of debt, 'putting new wine in old wineskins' as Jesus would say.

This misapplication has innumerable and fascinating implications for modern society. As just one example:
"Consider the custom, in American society, of constantly saying 'please' and 'thank you.' To do so is often treated as basic morality: we are constantly chiding children for forgetting to do it, just as the moral guardians of our society - teachers and ministers, for instance - do to everybody else. We often assume the habit is universal, but as the Inuit hunter made clear, it is not. Like so many of our everyday courtesies, it is a kind of democratization of what was once a habit of feudal deference: the insistence on treating absolutely everyone the way that one used only to have to treat a lord or similar hierarchical superior. [...] In English, 'thank you' derives from 'think,' it originally meant, 'I will remember what you did for me' [...] but in other languages (the Portuguese obrigado is a good example) the standard term follows the form of the English 'much obliged' - it actually does mean 'I am in your debt.' The French merci is even more graphic: it derives from 'mercy,' as in begging for mercy; by saying it you are symbolically placing yourself in your benefactor's power - since a debtor is, after all, a criminal."

So, now that we know to be wary of our conception of debt because is founded upon and partially composed of radically different ideas that make sense only in an entirely different sort of small-scale, primitive communist society, what else must we reexamine?

As it happens, the answer is: the entire structure of our contemporary world economy. And this reexamination must start from the beginning.

Traditional small-scale human societies, judging from the still-extant ones today that anthropologists have been able to study, had forms of currency. But these currencies were fundamentally different from the currency used today. They may have been rare feathers, or shells, or copper wires; but what differentiates them from a dollar or peso is that they were not redeemable for anything. Rather, they played a very limited and specific social role, such as making up for social transgressions, or paying for a rite of passage. But they were not "money" in the modern sense, something that can be used to trade for just about anything one might need or desire, from food to clothes to shelter. A form of modern money emerged as tokens of debt between individuals. Merchants with a reputation for paying debts might issue unmistakeable tokens of debt, say in the form of a chip or a notched wooden stick. The recipient of this IOU then might, rather than hold on to it and wait for the merchant debtor to redeem it, trade it for something else to someone who similarly trusted that the merchant would honor the debt instrument.

This, for obvious reasons, was only a very limited form of money. Few would accept as payment a wooden stick that was claimed to be redeemable for actual goods by an unknown merchant thousands of miles away. The birth of modern money required a midwife. A very powerful midwife, as it happened: governments, and their desire to wage war.
"Say a king wishes to support a standing army of fifty thousand men. Under ancient or medieval conditions, feeding such a force was an enormous problem - unless they were on the march, one would need to employ almost as many men and animals just to locate, acquire, and transport the necessary provisions. On the other hand, if one simply hands out coins to the soldiers and then demands that every family in the kingdom was obliged to pay one of those coins back to you, one would, in one blow, turn one's entire national economy into a vast machine for the provisioning of soldiers, since now every family, in order to get their hands on the coins, must find some way to contribute to the general effort to provide soldiers with things they want. Markets are brought into existence as a side effect."
So, while 'soldiers win battles, but logistics win wars,' government-issued money makes logistics possible in the first place. Hence, power-hungry kings soon latched on to the idea of issuing their own currencies, to create markets that would make military logistics much easier.

It is useful here to explain, in extremely simplified form, the difference between Modern (formerly known as Chartalist) Monetary Theory, and the outdated, conventional monetary theory. The outdated theory begins with Adam Smith's mythology about currency first being the spontaneous invention of private actors in a free marketplace choosing to use precious metals as a way of simplifying and facilitating trade. From this falsehood flows the idea that since governments forced their way into the realm of currency by issuing their own money, they must be kept in check just as would the most powerful merchant in a market who made himself the sole issuer of currency. After all, the temptation is too great on the part of the sovereign to use his money-creation powers to satisfy his own greed, destroying the value of the currency and the markets which depend on it in the process; so the smaller players need to band together to heap restrictions on governments to keep them from creating too much new money. This irrational and unspoken prejudice informs much of conventional monetary theory, horribly afraid as it is of inflation, and willing to countenance much unemployment and many unmet societal needs in order to keep it at bay. Better that governments spend less even if it leaves people suffering in unemployment, rather than employing them and possibly creating inflation that might rile investors.

Modern Monetary Theory (MMT), on the other hand, correctly locates the origin of money as the creation of the state. This is the conclusion all serious investigation has arrived at, even though it remains at the furthest reaches of mainstream Western economics today. John Maynard Keynes' "conclusion, which he set forth at the very beginning of his Treatise on Money, his most famous work, was more or less the only conclusion one could come to if one started not from first principles, but from a careful examination of the historical record: that the lunatic fringe was, essentially, right. Whatever its earliest origins, for the last four thousand years, money has been effectively a creature of the state." As the creature of the state, states have a great deal of freedom in its use. For instance, on the topic of spending, MMT holds that governments that issue their own currency are under no intrinsic limit; they can, and should, spend sufficiently to provide full employment to the population. The bugaboo of runaway inflation is one that governments need not be as terrified of as they currently are. As one of MMT's leading proponents, Bill Mitchell, puts it: "[a]ny spending that pushes nominal aggregate demand (spending) more quickly than the growth in real capacity will be inflation. That is the risk in all spending. There is nothing special about government spending in this regard. So, yes, under certain circumstances, government deficits could be inflationary but that begs the question as to why a prudent government would want to expand its deficit beyond full employment." In other words, government spending can cause inflation, but only under the same conditions that private spending can cause inflation: when there is too much money chasing too few goods and services. When natural, environmental, technological or human resources are left unused (which they by definition are whenever there is high unemployment), government spending can bring them into use by the economy. When such resources are fully tapped, further credit creation by the government or by private banks to allow more spending on tapped resources will lead to inflation.

This is a view diametrically opposed to the conventional monetary theory, with its basis in a myth about what money and credit are, in essence. But back to history:
"Chinese monetary theory was always chartalist. This was partly just an effect of size: the empire and its internal market were so huge that foreign trade was never especially important; therefore, those running the government were well aware that they could turn pretty much anything into money, simply by insisting that taxes be paid in that form."
This is interesting beyond the mere observation that the Chinese had stumbled upon the reality of modern money long before Western economists. It also points to a deeper challenge to our standard ideas about economics:
"[W]e're used to assuming that capitalism and markets are the same thing, but, as the great French historian Fernand Braudel pointed out, in many ways they could equally well be conceived as opposites. While markets are ways of exchanging goods through the medium of money - historically, ways for those with a surplus of grain to acquire candles and vice versa [...] - capitalism is first and foremost the art of using money to get more money [...]. Normally, the easiest way to do this is by establishing some kind of formal or de facto monopoly. For this reason, capitalists, whether merchant princes, financiers, or industrialists, invariably try to ally themselves with political authorities to limit the freedom of the market, so as to make it easier for them to do so. From this perspective, China was for most of its history the ultimate anti-capitalist market state. Unlike later European princes, Chinese rulers systematically refused to team up with would-be Chinese capitalists (who always existed). Instead, like their officials, they saw them as destructive parasites - though, unlike the usurers, ones whose fundamentally selfish and antisocial motivations could still be put to use in certain ways."
Not only is capitalism not particularly cozy with free markets, it is not terribly fond of freedom itself. "It is the secret scandal of capitalism that at no point has it been organized primarily around free labor." From the conquest of the Americas, to debt peonage, African slavery, indentured servitude, coolies, forced labor and the like, the history of capitalism betrays a tension with freedom bordering on open conflict. "This is a scandal not just because the system occasionally goes haywire, [...] but because it plays havoc with our most cherished assumptions about what capitalism really is - particularly that, in its basic nature, capitalism has something to do with freedom."

Above all, what Debt: The First 5,000 Years does brilliantly is dispelling illusions and revealing the folly in some of our foundational, yet largely unexamined, ideas. Nowhere is this more apparent than when Graeber shifts his gaze to contemporary political economic discourse about debt:
"[T]here is something profoundly deceptive going on here. All these moral dramas start from the assumption that personal debt is ultimately a matter of self-indulgence, a sin against one's loved ones - and therefore, that redemption must necessarily be a matter of purging and restoration of ascetic self-denial. What's being shunted out of sight here is first of all the fact that everyone is now in debt (U.S. household debt is now estimated at on average 130 percent of income), and that very little of this debt was accrued by those determined to find money to bet on the horses or toss away on fripperies. Insofar as it was borrowed for what economists like to call discretionary spending, it was mainly to be given to children, to share with friends, or otherwise to be able to build and maintain relations with other human beings that are based on something other than sheer material calculation. One must go into debt to achieve a life that goes in any way beyond sheer survival. [...] The chief cause of bankruptcy in America is catastrophic illness; most borrowing is simply a matter of survival (if one does not have a car, one cannot work); and increasingly, simply being able to go to college now almost necessarily means debt peonage for at least half one's subsequent working life. Still, it is useful to point out that for real human beings survival is rarely enough. Nor should it be."


Debt ends with a concrete proposal which is worth quoting at length:
"[W]e 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 population; 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."

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