Debt: The First 5000 Years Part 13

29. I might note that this a.s.sumption echoes the logic of neocla.s.sical economic theory, which a.s.sumes that all basic inst.i.tutional arrangements that define the context of economic activity were agreed to by all parties at some imaginary point in the past, and that since then, everything has and will always continue to exist in equilibrium. Interestingly, Keynes explicitly rejected this a.s.sumption in his theory of money (Davidson 2006). Contemporary social contract theorists incidentally make a similar argument, that there's no need to a.s.sume that this actually happened; it's enough to say it could have and act as if it did.

30. Aglietta is a Marxist, and one of the founders of the "Regulation School," Orleans, an adherent of the "economics of convention" favored by Thevenot and Boltanski. Primordial debt theory has been mainly developed by a group of researchers surrounding economists Michel Aglietta and Andre Orleans, first in La Violence de la Monnaie (1992), which employed a psychoa.n.a.lytic, Giradian framework, and then in a volume called Sovereignty, Legitimacy and Money (1995) and a collection called Sovereign Money (Aglietta, Andreau, etc. 1998), co-edited by eleven different scholars. The latter two volumes abandon the Girardian framework for a Dumontian one. In recent years the main exponent of this position has been another Regulationist, Bruno Theret (1992, 1995, 2007, 2008). Unfortunately almost none of this material has ever been translated into English, though a summary of many of Aglietta's contributions can be found in Grahl (2000).

31. For instance, Randall Wray (1990, 1998, 2000) and Stephanie Bell (1999, 2000) in the United States, or Geoffrey Ingham (1996, 1999, 2004) in the United Kingdom. Michael Hudson and others in the ISCANEE group have taken up elements of the idea, but have never to my knowledge fully embraced it.

32. *Rna. Malamoud (1983:22) notes that already in the earliest text it had both the meaning of "goods received in return for the promise to hand back either the goods themselves or something of at least equivalent value", as well as "crime" or "fault." So also Olivelle 1993:48, who notes *rna "can mean fault, crime, or guilt-often at the same time." It is not however the same as the word for "duty." For a typical example of early prayers for release from debt, see Atharva Veda Book 6 Hymns 117, 118, and 119.

33. Satapatha Brahmana 3.6.2.16 34. As Sylvain Levi, Marcel Mauss's mentor, remarked, if one takes the Brahmanic doctrine seriously, "the only authentic sacrifice would be suicide" (1898:133; so also A.B. Keith 1925:459). But of course no one actually took things that far.

35. More precisely, it offered the sacrificer a way to break out of a world in which everything, including himself, was a creation of the G.o.ds, to fas.h.i.+on an immortal, divine body, ascend into heaven, and thus be "born into a world he made himself" (Satapatha Brahmana VI:2.2.27) where all debts could be repaid, buy back his abandoned mortal body from the G.o.ds (see, i.e., Levi 1898:13032, Malamoud 1983:3132). This is certainly one of the most ambitious claims ever made for the efficacy of sacrifice, but some priests in China around that time were making similar claims (Puett 2002).

36. Translated "saints" in the text with which I began the chapter, but since it refers to the authors of the sacred texts, the usage seems appropriate.

37. I am fusing here two slightly different versions: one in Tattiriya Sarphita (6.3.10.5), which says that all Brahmans are born with a debt, but only lists G.o.ds, Fathers, and sages, leaving out the duty of hospitality, and the other in Satapatha Brahmana (1.7.2.16) that says all men are born as a debt, listing all four-but which seems really to be referring to males of twice-born castes. For a full discussion: see Malamoud 1983 and Olivelle 1993:46-55, also Malamoud 1998.

38. Theret 1999:6061 39. "The ultimate discharge of this fundamental debt is sacrifice of the living to appease and express grat.i.tude to the ancestors and deities of the cosmos" (Ingham 2004:90).

40. op cit. He cites Hudson 2002:1023, on the terms for "guilt" or "sin," but as we'll see the point goes back to Grierson (1977:2223).

41. Laum 1924. His argument about the origin of money in Greece in temple distributions is intriguing and has found contemporary exponents in Seaford (2004) and partly in Hudson (e.g., 2003) but is really a theory of the origin of coinage.

42. More than I would ever dream of trying to cite. There are two standard survey works on "primitive money," by Quiggin and by Einzig, both of which, curiously, came out in 1949. Both are outdated in their a.n.a.lysis but contain a great deal of useful material.

43. English "pay" is from French payer, which in turn is derived from Latin pacare, "to pacify," "to make peace with." Pacare in turn is related to pacere, "to come to terms with an injured party" (Grierson 1977:21).

44. Grierson 1977:20.

45. In fact, as Grierson notes, the authors often seemed to be intentionally making fun of themselves, as in the Irish text that specifies that one can demand compensation for a bee-sting, but only if one first deducts the cost of the dead bee (Grierson 1977:26).

46. We have plenty of myths and hymns from ancient Mesopotamia, too, for instance-but most were discovered in the ruins of ancient libraries that were also full of records of court trials, business contracts, and personal correspondence. In the case of the oldest Sanskrit texts, religious literature is all we have. What's more, since these were texts pa.s.sed on verbatim from teacher to student for thousands of years, we can't even say with any precision when and where they were written.

47. Interest-bearing loans certainly existed in Mesopotamia, but they only appear in Egypt in h.e.l.lenistic times, and in the Germanic world even later. The text speaks of "the tribute that I owe to Yama," which could refer to "interest," but the comprehensive review of early Indian legal sources in Kane's History of Dharmasastra (1973 III:411461) comes to no clear conclusion on when interest first appeared; Kosambi (1994:148) estimates that it might have appeared in 500 bc but admits this is a guess.

48. Mesopotamia, Egypt, and China come most immediately to mind. The notion that life is a loan from the G.o.ds does occur elsewhere: it seems to crop up spontaneously in ancient Greece, around the same time as money and interest-bearing loans do. "We are all owed as a debt to death," wrote the poet Simonides, around 500 bc. "The sentiment that life was a loan to be repaid by death [became] an almost proverbial saying" (Millet 1991a:6). No Greek author to my knowledge connects this explicitly to sacrifice, though one could conceivably argue that Plato's character Cephalus does so implicitly in one pa.s.sage of the Republic (331d).

49. Hubert and Mauss (1964) provide a good survey of the ancient literature in this regard.

50. Finley 1981:90 51. This was something of a legalistic distinction; what it really meant in practice was that funds levied in Persia were technically considered "gifts," but it shows the power of the principle (Briant 2006:39899) 52. Pharaonic Egypt and imperial China certainly did levy direct taxes, in money, kind, or labor, in different proportions at different times. In early India, the gana-sangha republics do not seem to have demanded taxes of their citizens, but the monarchies that ultimately replaced them did (Rhys Davies 1922:198200). My point is that taxes were not inevitable and were often seen as marks of conquest.

53. I am following what I believe is still the predominant view; though at least in some places Palaces were in charge of pretty much everything from quite early on, and Temples quite subordinate (see Maekawa 19731974). There is lively debate about this, as with the balance of temple, palace, clan, and individual holdings in different times and places, but I have avoided going into such debates, however interesting, unless they have a direct bearing on my argument.

54. I am following Hudson's interpretation (2002), though others-e.g. Steinkeller 1981, Mieroop 2002:64-suggest that interest may have instead originated in rental fees.

55. For a good summary, Hudson 1993, 2002. The meaning of amargi is first noted in Falkenstein (1954), see also Kramer (1963:79, Lemche (1979:16n34).

56. In ancient Egypt there were no loans at interest, and we know relatively little about other early empires, so we don't know how unusual this was. But the Chinese evidence is at the very least suggestive. Chinese theories of money were always resolutely Chartalist; and in the standard story about the origins of coinage, since at least Han times, the mythic founder of the Shang dynasty, upset to see so many families having to sell their children during famines, created coins so that the government could redeem the children and return them to their families (see chapter 8, below).

57. What is sacrifice, after all, but a recognition that an act such as taking an animal's life, even if necessary for our sustenance, is not an act to be taken lightly, but with an att.i.tude of humility before the cosmos?

58. Unless the recipient is owed money by the creditor, allowing everyone to cancel their debts in a circle. This might seem an extraneous point, but the circular cancellation of debts in this way seems to have been quite a common practice in much of history: see, for instance, the description of "reckonings" in chapter 11 below.

59. I am not ascribing this position to the authors of the Brahmanas necessarily; only pursuing what I take to be the internal logic of the argument, in dialogue with its authors.

60. Malamoud 1983:32.

61. Comte 1891:295 62. In France, particularly by political thinkers like Alfred Fouille and Leon Bourgeois. The latter, leader of the Radical Party in the 1890s, made the notion of social debt one of the conceptual foundations for what his philosophy of "solidarism"-a form of radical republicanism that, he argued, could provide a kind of middle-ground alternative to both revolutionary Marxism and free-market liberalism. The idea was to overcome the violence of cla.s.s struggle by appealing to a new moral system based on the notion of a shared debt to society-of which the state, of course, was merely the administrator and representative (Hayward 1959, Donzelot 1994, Jobert 2003). Emile Durkheim too was a Solidarist politically.

63. As a slogan, the expression is generally attributed to Charles Gide, the late-nineteenth-century French cooperativist, but became common in Solidarist circles. It became an important principle in Turkish socialist circles at the time (Aydan 2003), and, I have heard, though I have not been able to verify, in Latin America.

Chapter Four.

1. Hart 1986:638.

2. The technical term for this is "fiduciarity," the degree to which its value is based not on metal content but public trust. For a good discussion of the fiduciarity of ancient currencies, see Seaford 2004:139146. Almost all metal coins were overvalued. If the government set the value below that of the metal, of course, people would simply melt them down; if it's set at exactly the metal value, the results are usually deflationary. As Bruno Theret (2008:82627) points out, although Locke's reforms, which set the value of the British sovereign at exactly its weight in silver, were ideologically motivated, they had disastrous economic effects. Obviously, if coinage is debased or the value otherwise set too high in relation to the metal content, this can produce inflation. But the traditional view, where, say, the Roman currency was ultimately destroyed by debas.e.m.e.nt, is clearly false, since it took centuries for inflation to occur (Ingham 2004:1023).

3. Einzig 1949:104; similar gambling chits, in this case made of bamboo, were used in Chinese towns in the Gobi desert (ibid: 108).

4. On English token money, see Williamson 1889; Whiting 1971; Mathias 1979b.

5. On cacao, Millon 1955; on Ethopian salt money, Einzig 1949:12326. Both Karl Marx (1857:223, 1867:182) and Max Weber (1978:67374) were of the opinion that money had emerged from barter between societies, not within them. Karl Bucher (1904), and arguably Karl Polanyi (1968), held something close to this position, at least insofar as they insisted that modern money emerged from external exchange. Inevitably there must have been some sort of mutually reinforcing process between currencies of trade and the local accounting system. Insofar as we can talk about the "invention" of money in its modern sense, presumably this would be the place to look, though in places like Mesopotamia this must have happened long before the use of writing, and hence the history is effectively lost to us.

6. Einzig (1949:266), citing Kulischer (1926:92) and Ilwof (1882:36).

7. Genealogy of Morals, 2.8.

8. As I remarked earlier, both Adam Smith and Nietzsche thus antic.i.p.ate Levi-Strauss's famous argument that language is the "exchange of words." The remarkable thing here is that so many have managed to convince themselves that in all this, Nietzsche is providing a radical alternative to bourgeois ideology, even to the logic of exchange. Deleuze and Guattari, most embarra.s.singly, insist that "the great book of modern ethnology is not so much Mauss' The Gift as Nietzsche's On the Genealogy of Morals. At least it should be," since, they say, Nietzsche succeeds in interpreting "primitive society" in terms of debt, where Mauss still hesitates to break with the logic of exchange (1972:22425). On their inspiration, Sarthou-Lajus (1997) has written philosophy of debt as an alternative to bourgeois ideologies of exchange, that, she claims, a.s.sume the prior autonomy of the person. Of course what Nietzsche proposes is not an alternative at all. It's another aspect of the same thing. All this is a vivid reminder of how easy it is to mistake radicalized forms of our own bourgeois tradition as alternatives to it (Bataille [1993], who Deleuze and Guattari praise as another alternative to Mauss in the same pa.s.sage, is another notorious example of this sort of thing).

9. Genealogy of Morals 2.5.

10. Nietzsche had clearly been reading too much Shakespeare. There is no record of the mutilation of debtors in the ancient world; there was a good deal of mutilation of slaves, but they were by definition people who could not be in debt. Mutilation for debt is occasionally attested to in the Medieval period, but as we'll see, Jews tended to be the victims, since they were largely without rights, and certainly not the perpetrators. Shakespeare turned the story around.

11. Genealogy of Morals 2.19.

12. Genealogy of Morals 2.21.

13. Freuchen 1961:154. It's not clear what language this was said in, considering that Inuit did not actually have an inst.i.tution of slavery. It's also interesting because the pa.s.sage would not make sense unless there were some contexts in which gift exchange did operate, and therefore, debts accrued. What the hunter is emphasizing is that it was felt important that this logic did not extend to the basic means of human existence, such as food.

14. To take an example, the Ganges Valley in the Buddha's time was full of arguments about the relative merits of monarchical and democratic const.i.tutions. Gautama, though the son of a king, sided with the democrats, and many of the decision-making techniques used in democratic a.s.semblies of the time remain preserved in the organization of Buddhist monasteries (Muhlenberger & Paine 1997.) Were it not for this we would not know anything about them, or even be entirely sure that such democratic polities existed.

15. For instance, buying back one's ancestral land (Leviticus 25:25, 26) or anything one had given to the Temple (Leviticus 27).

16. Here too, in the case of complete insolvency, the debtor might lose his own freedom as well. See Houston (2006) for a good survey of the contemporary literature on economic conditions in the time of the prophets. I here follow a synthesis of his and Michael Hudson's (1993) reconstruction.

17. See for instance, Amos 2.6, 8.2, and Isaiah 58.

18. Nehemiah 5:37.

19. There continues to be intense scholarly debate about whether these laws were in fact invented by Nehemiah and his priestly allies (especially Ezra), and whether they were ever actually enforced in any period: see Alexander 1938; North 1954; Finkelstein 1961, 1965; Westbrook 1971; Lemke 1976, 1979; Hudson 1993; Houston 1996 for a few examples. At first there were similar debates about whether Mesopotamian "clean states" were actually enforced, until overwhelming evidence was produced that they were. The bulk of the evidence now indicates that the laws in Deuteronomy were enforced as well, though we can never know for certain how effectively.

20. "Every seventh year you shall make a cancellation. The cancellation shall be as follows: every creditor is to release the debts that he has owing to him by his neighbor" (Deuteronomy 15:13). Those held in debt bondage were also freed. Every 49 (or in some readings 50) years came the Jubilee, when all family land was to be returned to its original owners, and even family members who had been sold as slaves set free (Leviticus 25:9).

21. Unsurprisingly, since the need to borrow was most often sparked by the need to pay taxes imposed by foreign conquerors.

22. Hudson notes in Babylonian, clean slates were "called hubullum (debt) masa'um (to wash), literally 'a was.h.i.+ng away of the debt [records],' that is, a dissolving of the clay tablets on which financial obligations were inscribed" (1993:19).

23. Matthew 18: 2334.

24. To give a sense of the figures involved, ten thousand talents in gold is roughly equivalent to the entire Roman tax receipts from their provinces in what's now the Middle East. A hundred denarii is 1/60 of one talent, and therefore worth 600,000 times less.

25. Opheilma in the Greek original, which meant "that which is owed," "financial debts," and by extension, "sin." This was apparently used to translate the Aramaic hoyween, which also meant both "debt" and, by extension, "sin." The English here (as in all later Bible citations) follows the King James version, which in this case is itself based on a 1381 translation of the Lord's prayer by John Wycliffe. Most readers will probably be more familiar with 1559 Book of Common Prayer version that subst.i.tutes "And forgive us our trespa.s.ses, as we forgive them that trespa.s.s against us." However, the original is quite explicitly "debts."

26. Changing these to "spiritual debts" doesn't really change the problem.

27. The prospect of s.e.xual abuse in these situations clearly weighed heavily on the popular imagination. "Some of our daughters are brought unto bondage already" protested the Israelites to Nehemiah. Technically, daughters taken in debt bondage were not, if virgins, expected to be s.e.xually available to creditors who did not wish to marry them or marry them to their sons (Exodus 21:79; Wright 2009:13033) though chattel slaves were s.e.xually available (see Hezser 2003), and often the roles blurred in practice; even where laws theoretically protected them, fathers must often have had little means to protect them or cause those laws to be enforced. The Roman historian Livy's account of the abolition of debt bondage in Rome in 326 bc, for instance, featured a handsome young man named Caius Publilius placed in bondage for a debt he'd inherited from his father, and who was savagely beaten for refusing the s.e.xual advances of his creditor (Livy 8.28). When he appeared on the streets and announced what had happened to him, crowds gathered and marched on the Senate to demand that they abolish the inst.i.tution.

28. Particularly if the slaves were foreigners captured in war. As we'll see, the common belief that there were no moral objections to slavery in the ancient world is false. There were plenty. But aside from certain radicals such as the Essenes, the inst.i.tution was accepted as an unfortunate necessity.

29. Hudson (2002:37) cites the Greek historian Diodorus Siculus (i.79) who attributes this motive to the Egyptian pharaoh Bakenranef, though he too emphasizes that military considerations were not the only ones, but that cancellations reflected broader feelings about justice.

30. Oppenheim 1964:88. Oppenheim suggests that interest-free loans were more common in the Levant, and that in Mesopotamia social equals were more likely to charge each other interest but on easier terms, citing an Old a.s.syrian merchant who speaks of "the rate one brother charges another" (op cit). In ancient Greece, friendly loans between social equals were known as eranos loans, usually of sums raised by an impromptu mutual-aid society and not involving the payment of interest (Jones 1956:17173; Vondeling 1961; Finley 1981:6768; Millet 1991:153155). Aristocrats often made such loans to one another, but so did groups of slaves trying to pool money to buy back their freedom (Harrill 1998:167). This tendency, for mutual aid to be most marked at the very top and very bottom of the social scale is a consistent pattern to this day.

31. Hence the constant invocation of the phrase "your brother," particularly in Deuteronomy, e.g., "you shall not lend at interest to your brother" (23:20).

Chapter Five.

1. As we'll see in chapter seven, Plato begins The Republic in exactly the same way.

2. For a polite but devastating a.s.sessment, see Kahneman 2003.

3. Homans 1958, also Blau 1964; Levi-Strauss 1963:296. In anthropology, the first to propose reciprocity as a universal principle was Richard Thurnwald (1916), but it was made famous by Malinowski (1922).

4. One reason no known law code has ever been known to enforce the principle; the penalty was always there to be commuted to something else.

5. Atwood (2008:1). The author then proceeds to explore the nature of our sense of economic morality by comparing the behavior of caged apes with middle-cla.s.s Canadian children to argue that all human relations are indeed either exchange or forcible appropriation (ibid:49). Despite the brilliance of many of its arguments, the result is a rather sad testimony to how difficult it is for the scions of the North Atlantic professional cla.s.ses not to see their own characteristic ways of imagining the world as simple human nature.

6. Seton's father, a failed s.h.i.+pping magnate turned accountant, was, Seton later wrote, so cold and abusive that his son spent much of his youth in the woods trying to avoid him; after paying the debt-which incidentally came to $537.50, a tidy but not insurmountable sum in 1881-he changed his name and spent much of the rest of his life trying to develop more healthy child-rearing techniques.

7. Rev. W.H. Beatley in Levy-Bruhl 1923:411 8. Rev. Fr. Bulleon, in Levy-Bruhl 1923:425 9. This phrase was not coined by Marx, incidentally, but was apparently a slogan current in the early French workers' movement, first appearing in print in the work of socialist Louis Blanc in 1839. Marx only took up the phrase in his Critique of the Gotha Programme in 1875, and even then used it in a rather idiosyncratic way: for the principle he imagined could apply on the level of society as a whole once technology had reached the point of guaranteeing absolute material abundance. For Marx, "communism" was both the political movement aiming to bring about such a future society, and that society itself. I am drawing here more on the alternate strain of revolutionary theory, evident most famously perhaps in Peter Kropotkin's Mutual Aid (1902).

10. At least, unless there is some specific reason not to-for instance, a hierarchical division of labor that says some people get coffee and others do not.

11. What this means of course is that command economies-putting government bureaucracies in charge of coordinating every aspect of the production and distribution of goods and services within a given national territory-tends to be much less efficient than other available alternatives. This is obviously true, though if it "just doesn't work" at all, it's hard to imagine how states like the Soviet Union could have existed, let alone maintain themselves as world powers, in the first place.

12. Evans-Pritchard 1940:182 13. Similarly, a middle-cla.s.s pedestrian would be unlikely to ask a gang member for directions, and might even run in fear if one approached him to ask for the time, but this is again because of an a.s.sumption of a tacit state of war existing between them.

14. Ibid, p. 183.

15. Richards 1939:197. Max Gluckman, remarking on such customs, concludes that insofar as it is possible to speak of "primitive communism," it exists in consumption, rather than production, which tends to be much more individually organized (1971:52).

16. A typical example: "if a cabin of hungry people meets another whose provisions are not entirely exhausted, the latter share with the newcomers the little which remains to them without waiting to be asked, although they expose themselves thereby to the same danger of peris.h.i.+ng as those whom they help ..." Lafitau 1974 Volume II:61.

17. Jesuit Relations (1635) 8:127, cited in Delage 1993:54.

18. This is a common arrangement in certain parts of the world (particularly the Andes, Amazonia, insular Southeast Asia, and Melanesia), and invariably there is some rule whereby each half is dependent on the other for something considered essential to human life. One can only marry someone from the other side of the village, or maybe one can only eat pigs raised on the other side, or perhaps one side needs people from the other side to sponsor the rituals that initiate its male children into manhood.

19. As I have suggested elsewhere, Graeber 2001:15960; cf. Mauss 1947: 1045.

20. I'm side-stepping the whole question of one-sided examples discussed in Graeber 2001:218.

21. Marshall Sahlins (1972) coined the phrase "generalized reciprocity" to describe this sort of relation, on the principle that if everything circulates freely, eventually, all accounts will balance out. Marcel Mauss was already making such an argument in lectures back in the 1930s (1947), but he also recognized the problems: while this might be true of Iroquois moieties, some relations.h.i.+ps never balance out-for instance, between mother and child. His solution, "alternating reciprocity"-that we repay our parents by having children ourselves-is clearly drawn from his study of the Vedas, but it ultimately demonstrates that if one has already decided that all relations are based on reciprocity, one can always define the term so broadly as to make it true.

22. Hostis: see Benveniste 1972:72. The Latin terminology concerning hospitality emphasizes the absolute mastery of the house by its (male) owner as the precondition of any act of hospitality; Derrida (2000, 2001) argues that this points to a central contradiction in the very concept of hospitality, since it implies an already-existing absolute dominium or power over others, the kind that might be seen as taking its most exploitative form in Lot's offering his own daughters up to a crowd of Sodomites to dissuade them from raping his houseguests. However, this same principle of hospitality can be equally well doc.u.mented in societies-such as the Iroquois-that were anything but patriarchal.

23. Evans-Pritchard 1940:154, 158.

24. This is of course one reason why the very rich like to a.s.sociate mainly with one another.

25. In a less hostile vein one can speak of an exchange of prisoners, notes, or compliments.

26. A good source on haggling: Uchendo 1967.

27. Bohannan 1964:47.

28. Not even a real business deal, since these may often involve a great deal of collective wining and dining and giving of presents. More the sort of imaginary business deal that appears in economics textbooks.

29. One need only glance at the vast anthropological literature on "compet.i.tive feasting": e.g., Valeri 2001.

30. Bourdieu 1965 is the key text, but he repeats the main points in Bourdieu 1990:98101.

31. Onvlee 1980:204.

32. Petronius 51; Pliny Natural History 36.195; Dio 57.21.57.