Debt

by David Graeber

  In the last three chapters I have tried to show that there is another way of looking at things, and then to describe how it is that we got here. This is why I developed the concept of human economies: ones in which what is considered really important about human beings is the fact that they are each a unique nexus of relations with others—therefore, that no one could ever be considered exactly equivalent to anything or anyone else. In a human economy, money is not a way of buying or trading human beings, but a way of expressing just how much one cannot do so.

  I then went on to describe how all this can begin to break down: how humans can become objects of exchange: first, perhaps, women given in marriage; ultimately, slaves captured in war. What all these relations have in common, I observed, was violence. Whether it is Tiv girls being tied up and beaten for running away from their husbands, or husbands being herded into slave ships to die on faraway plantations, that same principle always applies: it is only by the threat of sticks, ropes, spears, and guns that one can tear people out of those endlessly complicated webs of relationship with others (sisters, friends, rivals …) that render them unique, and thus reduce them to something that can be traded.

  All of this, it is important to emphasize, can happen in places where markets in ordinary, everyday goods—clothing, tools, foodstuffs—do not even exist. In fact, in most human economies, one’s most important possessions could never be bought and sold for the same reasons that people can’t: they are unique objects, caught up in a web of relationships with human beings.124

  My old professor John Comaroff used to tell a story about carrying out a survey in Natal, in South Africa. He had spent most of a week driving from homestead to homestead in a jeep with a box full of questionnaires and a Zulu-speaking interpreter, driving past apparently endless herds of cattle. After about six days, his interpreter suddenly started and pointed into the middle of one herd. “Look!” he said. “That’s the same cow! That one there—with the red spot on its back. We saw it three days ago in a place ten miles from here. I wonder what happened? Did someone get married? Or maybe there was a settlement to some dispute.”

  In human economies, when this ability to rip people from their contexts does appear, it is most often seen as an end in itself. One can already see a hint of this among the Lele. Important men would occasionally acquire war captives from far away as slaves, but it was almost always to be sacrificed at their funeral.125 The squelching of one man’s individuality was seen as somehow swelling the reputation, the social existence, of the other.126 In what I’ve been calling heroic societies, of course this kind of addition and subtraction of honor and disgrace is lifted from a somewhat marginal practice to become the very essence of politics. As endless epics, sagas, and eddas attest, heroes become heroes by making others small. In Ireland and Wales, we can observe how this very ability to degrade others, to remove unique human beings from their hearths and families and thus render them anonymous units of accounting—the Irish slave-girl currency, the Welsh washerwomen—is itself the highest expression of honor.

  In heroic societies, the role of violence is not hidden—it’s glorified. Often, it can form the basis of one’s most intimate relations. In the Iliad, Achilles sees nothing shameful in his relation with his slave-girl, Briseis, whose husband and brothers he killed; he refers to her as his “prize of honor,” but almost in the very same breath, he also insists that, just any decent man must love and care for his household dependents, “so I from my heart loved this one, even though I won her with my spear.”127

  That such relations of intimacy can often develop between men of honor and those they have stripped of their dignity, history can well attest. After all, the annihilation of any possibility of equality also eliminates any question of debt, of any relation other than power. It allows a certain clarity. This is presumably why emperors and kings have such a notorious tendency to surround themselves with slaves or eunuchs.

  There is something more here, though. If one looks across the expanse of history, one cannot help but notice a curious sense of identification between the most exalted and the most degraded; particularly, between emperors and kings, and slaves. Many kings surround themselves with slaves, appoint slave ministers—there have even been, as with the Mamluks in Egypt, actual dynasties of slaves. Kings surround themselves with slaves for the same reason that they surround themselves with eunuchs: because the slaves and criminals have no families or friends, no possibility of other loyalties—or at least that, in principle, they shouldn’t. But in a way, kings should really be like that too. As many an African proverb emphasizes: a proper king has no relatives either, or at least, he acts as if he does not.128 In other words, the king and slave are mirror images, in that unlike normal human beings who are defined by their commitments to others, they are defined only by relations of power. They are as close to perfectly isolated, alienated beings as one can possibly become.

  At this point we can finally see what’s really at stake in our peculiar habit of defining ourselves simultaneously as master and slave, reduplicating the most brutal aspects of the ancient household in our very concept of ourselves, as masters of our freedoms, or as owners of our very selves. It is the only way that we can imagine ourselves as completely isolated beings. There is a direct line from the new Roman conception of liberty—not as the ability to form mutual relationships with others, but as the kind of absolute power of “use and abuse” over the conquered chattel who make up the bulk of a wealthy Roman man’s household—to the strange fantasies of liberal philosophers like Hobbes, Locke, and Smith, about the origins of human society in some collection of thirty- or forty-year-old males who seem to have sprung from the earth fully formed, then have to decide whether to kill each other or begin to swap beaver pelts.129

  European and American intellectuals, it is true, have spent much of the last two hundred years trying to flee from the more disturbing implications of this tradition of thought. Thomas Jefferson, that owner of many slaves, chose to begin the Declaration of Independence by directly contradicting the moral basis of slavery, writing “we hold these truths to be self-evident, that all men are created equal, and that they are endowed by their Creator with certain inalienable Rights …”—thus undercutting simultaneously any argument that Africans were racially inferior, and also that they or their ancestors could ever have been justly and legally deprived of their freedom. In doing so, however, he did not propose some radically new conception of rights and liberties. Neither have subsequent political philosophers. For the most part, we’ve just kept the old ones, but with the word “not” inserted here and there. Most of our most precious rights and freedoms are a series of exceptions to an overall moral and legal framework that suggests we shouldn’t really have them in the first place.

  Formal slavery has been eliminated, but (as anyone who works from nine to five can testify) the idea that you can alienate your liberty, at least temporarily, endures. In fact, it determines what most of us have to do for most of our waking hours, except, usually, on weekends. The violence has been largely pushed out of sight.130 But this is largely because we’re no longer able to imagine what a world based on social arrangements that did not require the continual threat of tasers and surveillance cameras would even look like.

  Chapter Eight

  CREDIT VERSUS BULLION

  AND THE CYCLES OF HISTORY

  Bullion is the accessory of war, and not of peaceful trade.

  —Geoffrey W. Gardiner

  ONE MIGHT WELL ASK: If our political and legal ideas really are founded on the logic of slavery, then how did we ever eliminate slavery? Of course, a cynic might argue that we haven’t; we’ve just relabeled it. The cynic would have a point: an ancient Greek would certainly have seen the distinction between a slave and an indebted wage laborer as, at best, a legalistic nicety.1 Still, even the elimination of formal chattel slavery has to be considered a remarkable achievement, and it is worthwhile to wonder how it was accomplished. Especially since it was not j
ust accomplished once. The truly remarkable thing, if one consults the historical record, is that slavery has been eliminated—or effectively eliminated—many times in human history.

  In Europe, for instance, the institution largely vanished in the centuries following the collapse of the Roman empire—an historical achievement rarely recognized by those of us used to referring to these events as the beginning of “the Dark Ages.”2 No one is quite sure how it happened. Most agree that the spread of Christianity must have had something to do with it, but that can’t have been the direct cause, since the Church itself was never explicitly opposed to the institution and in many cases defended it. Instead, the abolition appears to have happened despite the attitudes of both the intellectuals and the political authorities of the time. Yet it did happen, and it had lasting effects. On the popular level, slavery remained so universally detested that even a thousand years later, when European merchants started trying to revive the trade, they discovered that their compatriots would not countenance slaveholding in their own countries—one reason why planters were eventually obliged to acquire their slaves in Africa and set up plantations in the New World.3 It 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.

  What’s more, the demise of ancient slavery was not limited to Europe. Remarkably, right around the same time—in the years around 600 ad—we find almost exactly the same thing happening in India and China, where, over the course of centuries, amidst much unrest and confusion, chattel slavery largely ceased to exist. What all this suggests is that moments of historical opportunity—moments when meaningful change is possible—follow a distinct, even a cyclical pattern, one that has long been far more coordinated across geographical space than we would ever have imagined. There is a shape to the past, and it is only by understanding it that we can begin to have a sense of the historical opportunities that exist in the present.

  The easiest way to make these cycles visible is to reexamine exactly the phenomenon we’ve been concerned with over the course of this book: the history of money, debt, and credit. The moment we begin to map the history of money across the last five thousand years of Eurasian history, startling patterns begin to emerge. In the case of money, one event stands out above all others: the invention of coinage. Coinage appears to have arisen independently in three different places, almost simultaneously: on the Great Plain of northern China, in the Ganges river valley of northeast India, and in the lands surrounding the Aegean Sea, in each case, between roughly 600 and 500 bc. This wasn’t due to some sudden technological innovation: the technologies used in making the first coins were, in each case, entirely different.4 It was a social transformation. Why this happened in exactly this way is an historical mystery. But this much we know: for some reason, in Lydia, India, and China, local rulers decided that whatever longstanding credit systems had existed in their kingdoms were no longer adequate, and they began to issue tiny pieces of precious metals—metals that had previously been used largely in international commerce, in ingot form—and to encourage their subjects to use them in day-to-day transactions.

  From there, the innovation spread. For more than a thousand years, states everywhere started issuing their own coinage. But then, right around 600 ad, about the time that slavery was disappearing, the whole trend was suddenly thrown into reverse. Cash dried up. Everywhere, there was a movement back to credit once again.

  If we look at Eurasian history over the course of the last five thousand years, what we see is a broad alternation between periods dominated by credit money and periods in which gold and silver come to dominate—that is, those during which at least a large share of transactions were conducted with pieces of valuable metal being passed from hand to hand.

  Why? The single most important factor would appear to be war. Bullion predominates, above all, in periods of generalized violence. There’s a very simple reason for that. Gold and silver coins are distinguished from credit arrangements by one spectacular feature: they can be stolen. A debt is, by definition, a record, as well as a relation of trust. Someone accepting gold or silver in exchange for merchandise, on the other hand, need trust nothing more than the accuracy of the scales, the quality of the metal, and the likelihood that someone else will be willing to accept it. In a world where war and the threat of violence are everywhere—and this appears to have been an equally accurate description of Warring States China, Iron Age Greece, and pre-Mauryan India—there are obvious advantages to making one’s transactions simple. This is all the more true when dealing with soldiers. On the one hand, soldiers tend to have access to a great deal of loot, much of which consists of gold and silver, and will always seek a way to trade it for the better things in life. On the other, a heavily armed itinerant soldier is the very definition of a poor credit risk. The economists’ barter scenario might be absurd when applied to transactions between neighbors in the same small rural community, but when dealing with a transaction between the resident of such a community and a passing mercenary, it suddenly begins to make a great deal of sense.

  For much of human history, then, an ingot of gold of silver, stamped or not, has served the same role as the contemporary drug dealer’s suitcase full of unmarked bills: an object without a history, valuable because one knows it will be accepted in exchange for other goods just about anywhere, no questions asked. As a result, while credit systems tend to dominate in periods of relative social peace, or across networks of trust (whether created by states or, in most periods, transnational institutions like merchant guilds or communities of faith), in periods characterized by widespread war and plunder, they tend to be replaced by precious metal. What’s more, while predatory lending goes on in every period of human history, the resulting debt crises appear to have the most damaging effects at times when money is most easily convertible into cash.

  As a starting point to any attempt to discern the great rhythms that define the current historical moment, let me propose the following breakdown of Eurasian history according to the alternation between periods of virtual and metal money. The cycle begins with the Age of the First Agrarian Empires (3500–800 bc), dominated by virtual credit money. This is followed by the Axial Age (800 bc-600 ad), which will be covered in the next chapter, and which saw the rise of coinage and a general shift to metal bullion. The Middle Ages (600–1450 ad), which saw a return to virtual credit money, will be covered in chapter 10; chapter 11 will cover the next turn of the cycle, the Age of Capitalist Empires, which began around 1450 with a massive planetary switch back to gold and silver bullion, and which could only really be said to have ended in 1971, when Richard Nixon announced that the U.S. dollar would no longer be redeemable in gold. This marked the beginning of yet another phase of virtual money, one which has only just begun, and whose ultimate contours are, necessarily, invisible. Chapter 12, the final chapter, will be devoted to applying the insights of history to understanding what it might mean and the opportunities it might throw open.

  Mesopotamia

  (3500–800 BC)

  We have already had occasion to note the predominance of credit money in Mesopotamia, the earliest urban civilization that we know about. In the great temple and palace complexes, not only did money serve largely as an accounting measure rather than physically changing hands, merchants and tradespeople developed credit arrangements of their own. Most of these took the physical form of clay tablets, inscribed with some obligation of future payment, that were then sealed inside clay envelopes and marked with the borrower’s seal. The creditor would keep the envelope as a surety, and it would be broken open on repayment. In some times or places at least, these bullae appear to have become what we would now call negotiable instruments, since the tablet inside did not simply record a promis
e to pay the original lender, but was designated “to the bearer”—in other words, a tablet recording a debt of five shekels of silver (at prevailing rates of interest) could circulate as the equivalent of a five-shekel promissory note—that is, as money.5

  We don’t know how often this happened; how many hands such tablets would typically pass through, how many transactions were based on credit, how often merchants actually did weigh out silver in rough chunks to buy and sell their merchandise, or when they were most likely to do so. No doubt all this varied over time. Promissory notes usually circulated within merchant guilds, or between inhabitants of the relatively well-off urban neighborhoods where people knew one another well enough to trust them to be accountable, but not so well that they could rely on one another for more traditional forms of mutual aid.6 We know even less about the marketplaces frequented by ordinary Mesopotamians, except that tavern-keepers operated on credit, and hawkers and operators of market stalls probably did as well.7

  The origins of interest will forever remain obscure, since they preceded the invention of writing. The terminology for interest in most ancient languages is derived from some word for “offspring,” causing some to speculate that it originates in loans of livestock, but this seems a bit literal-minded. More likely, the first widespread interest-bearing loans were commercial: temples and palaces would forward wares to merchants and commercial agents, who would then trade them in nearby mountain kingdoms or on trading expeditions overseas.8

  The practice is significant because it implies a fundamental lack of trust. After all, why not simply demand a share in the profits? This seems more fair (a merchant who came back bankrupt would probably have little means of paying anyway), and profit-sharing partnerships of this sort became common practice in the later Middle East.9 The answer seems to be that profit-sharing partnerships were typically contracted between merchants, or anyway people of similar background and experience who had ways of keeping track of one another. Palace or temple bureaucrats and world-roaming merchant adventurers had little in common, and the bureaucrats seem to have concluded that one could not normally expect a merchant returned from a far-off land to be entirely honest about his adventures. A fixed interest rate would render irrelevant whatever elaborate tales of robbery, shipwreck, or attacks by winged snakes or elephants a creative merchant might have concocted. The return was fixed in advance.