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Debt: The First 5000 Years
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By David Graeber
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Amazon: Link
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#Pg.TC Highlight
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1118If you owe the bank a hundred thousand dollars, the bank owns you. If you owe the bank a hundred million dollars, you own the bank. — American Proverb
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2131As it happened, she didn’t actually know what the IMF was, so I offered that the International Monetary Fund basically acted as the world’s debt enforcers—“You might say, the high-finance equivalent of the guys who come to break your legs.” I launched into historical background, explaining how, during the ’70s oil crisis, OPEC countries ended up pouring so much of their newfound riches into Western banks that the banks couldn’t figure out where to invest the money; how Citibank and Chase therefore began sending agents around the world trying to convince Third World dictators and politicians to take out loans (at the time, this was called “go-go banking”); how they started out at extremely low rates of interest that almost immediately skyrocketed to 20 percent or so due to tight U.S. money policies in the early ’80s; how, during the ’80s and ’90s, this led to the Third World debt crisis; how the IMF then stepped in to insist that, in order to obtain refinancing, poor countries would be obliged to abandon price supports on basic foodstuffs, or even policies of keeping strategic food reserves, and abandon free health care and free education; how all of this had led to the collapse of all the most basic supports for some of the poorest and most vulnerable people on earth. I spoke of poverty, of the looting of public resources, the collapse of societies, endemic violence, malnutrition, hopelessness, and broken lives.
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3149Where to start? I could have begun by explaining how these loans had originally been taken out by unelected dictators who placed most of it directly in their Swiss bank accounts, and ask her to contemplate the justice of insisting that the lenders be repaid, not by the dictator, or even by his cronies, but by literally taking food from the mouths of hungry children. Or to think about how many of these poor countries had actually already paid back what they’d borrowed three or four times now, but that through the miracle of compound interest, it still hadn’t made a significant dent in the principal. I could also observe that there was a difference between refinancing loans, and demanding that in order to obtain refinancing, countries have to follow some orthodox free-market economic policy designed in Washington or Zurich that their citizens had never agreed to and never would, and that it was a bit dishonest to insist that countries adopt democratic constitutions and then also insist that, whoever gets elected, they have no control over their country’s policies anyway. Or that the economic policies imposed by the IMF didn’t even work. But there was a more basic problem: the very assumption that debts have to be repaid.
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4174For several days afterward, that phrase kept resonating in my head. “Surely one has to pay one’s debts.” The reason it’s so powerful is that it’s not actually an economic statement: it’s a moral statement. After all, isn’t paying one’s debts what morality is supposed to be all about? Giving people what is due them. Accepting one’s responsibilities. Fulfilling one’s obligations to others, just as one would expect them to fulfill their obligations to you. What could be a more obvious example of shirking one’s responsibilities than reneging on a promise, or refusing to pay a debt?
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X5193The very fact that we don’t know what debt is, the very flexibility of the concept, is the basis of its power. If history shows anything, it is that there’s no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt—above all, because it immediately makes it seem that it’s the victim who’s doing something wrong. Mafiosi understand this. So do the commanders of conquering armies. For thousands of years, violent men have been able to tell their victims that those victims owe them something. If nothing else, they “owe them their lives” (a telling phrase) because they haven’t been killed.
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6213But debt is not just victor’s justice; it can also be a way of punishing winners who weren’t supposed to win. The most spectacular example of this is the history of the Republic of Haiti—the first poor country to be placed in permanent debt peonage. Haiti was a nation founded by former plantation slaves who had the temerity not only to rise up in rebellion, amidst grand declarations of universal rights and freedoms, but to defeat Napoleon’s armies sent to return them to bondage. France immediately insisted that the new republic owed it 150 million francs in damages for the expropriated plantations, as well as the expenses of outfitting the failed military expeditions, and all other nations, including the United States, agreed to impose an embargo on the country until it was paid. The sum was intentionally impossible (equivalent to about 18 billion dollars), and the resultant embargo ensured that the name “Haiti” has been a synonym for debt, poverty, and human misery ever since.
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7232Now, it’s true that, throughout history, certain sorts of debt, and certain sorts of debtor, have always been treated differently than others. In the 1720s, one of the things that most scandalized the British public when conditions at debtors’ prisons were exposed in the popular press was the fact that these prisons were regularly divided into two sections. Aristocratic inmates, who often thought of a brief stay in Fleet or Marshalsea as something of a fashion statement, were wined and dined by liveried servants and allowed to receive regular visits from prostitutes. On the “common side,” impoverished debtors were shackled together in tiny cells, “covered with filth and vermin,” as one report put it, “and suffered to die, without pity, of hunger and jail fever.”
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8279One extreme possibility might be the situation the French anthropologist Jean-Claude Galey encountered in a region of the eastern Himalayas where as recently as the 1970s, the low-ranking castes—they were referred to as “the vanquished ones,” since they were thought to be descended from a population once conquered by the current landlord caste many centuries before—lived in a situation of permanent debt dependency. Landless and penniless, they were obliged to solicit loans from the landlords simply to find a way to eat—not for the money, since the sums were paltry, but because poor debtors were expected to pay back the interest in the form of work, which meant they were at least provided with food and shelter while they cleaned out their creditors’ outhouses and reroofed their sheds. For the “vanquished”—as for most people in the world, actually—the most significant life expenses were weddings and funerals. These required a good deal of money, which always had to be borrowed. In such cases it was common practice, Galey explains, for high-caste moneylenders to demand one of the borrower’s daughters as security. Often, when a poor man had to borrow money for his daughter’s marriage, the security would be the bride herself. She would be expected to report to the lender’s household after her wedding night, spend a few months there as his concubine, and then, once he grew bored, be sent off to some nearby timber camp, where she would have to spend the next year or two working as a prostitute to pay off her father’s debt. Once accounts were settled, she return to her husband and begin her married life.
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9312Looking over world literature, it is almost impossible to find a single sympathetic representation of a moneylender—or anyway, a professional moneylender, which means by definition one who charges interest. I’m not sure there is another profession (executioners?) with such a consistently bad image. It’s especially remarkable when one considers that unlike executioners, usurers often rank among the richest and most powerful people in their communities. Yet the very name, “usurer,” evokes images of loan sharks, blood money, pounds of flesh, the selling of souls, and behind them all, the Devil, often represented as himself a kind of usurer, an evil accountant with his books and ledgers, or alternately, as the figure looming just behind the usurer, biding his time until he can repossess the soul of a villain who, by his very occupation, has clearly made a compact with Hell.
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10379From this perspective, the crucial factor, and a topic that will be explored at length in these pages, is money’s capacity to turn morality into a matter of impersonal arithmetic—and by doing so, to justify things that would otherwise seem outrageous or obscene. The factor of violence, which I have been emphasizing up until now, may appear secondary. The difference between a “debt” and a mere moral obligation is not the presence or absence of men with weapons who can enforce that obligation by seizing the debtor’s possessions or threatening to break his legs. It is simply that a creditor has the means to specify, numerically, exactly how much the debtor owes. However, when one looks a little closer, one discovers that these two elements—the violence and the quantification—are intimately linked. In fact it’s almost impossible to find one without the other. French usurers had powerful friends and enforcers, capable of bullying even Church authorities. How else could they have collected debts that were technically illegal? Hiromushime was utterly uncompromising with her debtors—“showing no mercy whatsoever”—but then, her husband was the governor. She didn’t have to show mercy. Those of us who do not have armed men behind us cannot afford to be so exacting. The way violence, or the threat of violence, turns human relations into mathematics will crop up again and again over the course of this book. It is the ultimate source of the moral confusion that seems to float around everything surrounding the topic of debt. The resulting dilemmas appear to be as old as civilization itself. We can observe the process in the very earliest records from ancient Mesopotamia; it finds its first philosophical expression in the Vedas, reappears in endless forms throughout recorded history, and still lies underneath the essential fabric of our institutions today—state and market, our most basic conceptions of the nature of freedom, morality, sociality—all of which have been shaped by a history of war, conquest, and slavery in ways we’re no longer capable of even perceiving because we can no longer imagine things any other way.
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11461Admittedly, the usual impulse is to imagine everything around us as absolutely new. Nowhere is this so true as with money. How many times have we been told that the advent of virtual money, the dematerialization of cash into plastic and dollars into blips of electronic information, has brought us to an unprecedented new financial world? The assumption that we were in such uncharted territory, of course, was one of the things that made it so easy for the likes of Goldman Sachs and AIG to convince people that no one could possibly understand their dazzling new financial instruments. The moment one casts matters on a broad historical scale, though, the first thing one learns is that there’s nothing new about virtual money. Actually, this was the original form of money. Credit system, tabs, even expense accounts, all existed long before cash. These things are as old as civilization itself. True, we also find that history tends to move back and forth between periods dominated by bullion—where it’s assumed that gold and silver are money—and periods where money is assumed to be an abstraction, a virtual unit of account. But historically, credit money comes first, and what we are witnessing today is a return of assumptions that would have been considered obvious common sense in, say, the Middle Ages—or even ancient Mesopotamia.
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X12496For every subtle and complicated question, there is a perfectly simple and straightforward answer, which is wrong. — H. L. Mencken (slightly rephrased)
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13511The standard economic-history version has little to do with anything we observe when we examine how economic life is actually conducted, in real communities and marketplaces, almost anywhere—where one is much more likely to discover everyone is in debt to everyone else in a dozen different ways, and that most transactions take place without the use of currency.
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X14662The definitive anthropological work on barter, by Caroline Humphrey, of Cambridge, could not be more definitive in its conclusions: “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing.”
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15722What all such cases of trade through barter have in common is that they are meetings with strangers who will, likely as not, never meet again, and with whom one certainly will not enter into any ongoing relations. This is why a direct one-on-one exchange is appropriate: each side makes their trade and walks away. It’s all made possible by laying down an initial mantle of sociability in the form of shared pleasures, music, and dance—the usual base of conviviality on which trade must always be built. Then comes the actual trading, where both sides make a great display of the latent hostility that necessarily exists in any exchange of material goods between strangers—where neither party has no particular reason not to take advantage of the other—by playful mock aggression, though in the Nambikwara case, where the mantle of sociability is extremely thin, mock aggression is in constant danger of slipping over into the real thing. The Gunwinggu, with their more relaxed attitude toward sexuality, have quite ingeniously managed to make the shared pleasures and aggression into exactly the same thing. Recall here the language of the economics textbooks: “Imagine a society without money.” “Imagine a barter economy.” One thing these examples make abundantly clear is just how limited the imaginative powers of most economists turn out to be.21 Why? The simplest answer would be: for there to even be a discipline called “economics,” a discipline that concerns itself first and foremost with how individuals seek the most advantageous arrangement for the exchange of shoes for potatoes, or cloth for spears, it must assume that the exchange of such goods need have nothing to do with war, passion, adventure, mystery, sex, or death. Economics assumes a division between different spheres of human behavior that, among people like the Gunwinngu and the Nambikwara, simply does not exist. These divisions in turn are made possible by very specific institutional arrangements—the existence of lawyers, prisons, and police—to ensure that even people who don’t like each other very much, who have no interest in developing any kind of ongoing relationship, but are simply interested in getting their hands on as much of the others’ possessions as possible, will nonetheless refrain from the most obvious expedient (theft). This in turn allows us to assume that life is neatly divided between the marketplace, where we do our shopping, and the “sphere of consumption,” where we concern ourselves with music, feasts, and seduction. In other words, the vision of the world that forms the basis of the economics textbooks, which Adam Smith played so large a part in promulgating, has by now become so much a part of our common sense that we find it hard to imagine any other possible arrangement.
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16865The basic monetary unit was the silver shekel. One shekel’s weight in silver was established as the equivalent of one gur, or bushel of barley. A shekel was subdivided into 60 minas, corresponding to one portion of barley—on the principle that there were 30 days in a month, and Temple workers received two rations of barley every day. It’s easy to see that “money” in this sense is in no way the product of commercial transactions. It was actually created by bureaucrats in order to keep track of resources and move things back and forth between departments.
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17897In fact, our 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.
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18924Recall here what Smith was trying to do when he wrote The Wealth of Nations. Above all, the book was an attempt to establish the newfound discipline of economics as a science. This meant that not only did economics have its own peculiar domain of study—what we now call “the economy,” though the idea that there even was something called an “economy” was very new in Smith’s day—but that this economy operated according to laws of much the same sort as Sir Isaac Newton had so recently identified as governing the physical world. Newton had represented God as a cosmic watchmaker who had created the physical machinery of the universe in such a way that it would operate for the ultimate benefit of humans, and then let it run on its own. Smith was trying to make a similar, Newtonian argument.3 God—or Divine Providence, as he put it—had arranged matters in such a way that our pursuit of self-interest would nonetheless, given an unfettered market, be guided “as if by an invisible hand” to promote the general welfare. Smith’s famous invisible hand was, as he says in his Theory of Moral Sentiments, the agent of Divine Providence. It was literally the hand of God.
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19968Mitchell-Innes was an exponent of what came to be known as the Credit Theory of money, a position that over the course of the nineteenth century had its most avid proponents not in Mitchell-Innes’s native Britain but in the two up-and-coming rival powers of the day, the United States and Germany. Credit Theorists insisted that money is not a commodity but an accounting tool. In other words, it is not a “thing” at all. For a Credit Theorist can no more touch a dollar or a deutschmark than you can touch an hour or a cubic centimeter. Units of currency are merely abstract units of measurement, and as the credit theorists correctly noted, historically, such abstract systems of accounting emerged long before the use of any particular token of exchange.9
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20982How could credit money come about? Let us return to the economics professors’ imaginary town. Say, for example, that Joshua were to give his shoes to Henry, and, rather than Henry owing him a favor, Henry promises him something of equivalent value.10 Henry gives Joshua an IOU. Joshua could wait for Henry to have something useful and then redeem it. In that case Henry would rip up the IOU and the story would be over. But say Joshua were to pass the IOU on to a third party—Sheila—to whom he owes something else. He could tick it off against his debt to a fourth party, Lola—now Henry will owe that amount to her. Hence, money is born, because there’s no logical end to it. Say Sheila now wishes to acquire a pair of shoes from Edith; she can just hand Edith the IOU and assure her that Henry is good for it. In principle, there’s no reason that the IOU could not continue circulating around town for years—provided people continue to have faith in Henry. In fact, if it goes on long enough, people might forget about the issuer entirely. Things like this do happen. The anthropologist Keith Hart once told me a story about his brother, who in the ’50s was a British soldier stationed in Hong Kong. Soldiers used to pay their bar tabs by writing checks on accounts back in England. Local merchants would often simply endorse them over to each other and pass them around as currency: once, he saw one of his own checks, written six months before, on the counter of a local vendor covered with about forty different tiny inscriptions in Chinese.
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211008The real impetus for the Chartalist position, in fact, came out of what came to be known as the “German Historical School,” whose most famous exponent was the historian G.F. Knapp, whose State Theory of Money first appeared in 1905.12 If money is simply a unit of measure, it makes sense that emperors and kings should concern themselves with such matters. Emperors and kings are almost always concerned to established uniform systems of weights and measures throughout their kingdoms. It is also true, as Knapp observed, that once established, such systems tend to remain remarkably stable over time. During the reign of the actual Henry II (1154–1189), just about everyone in Western Europe was still keeping their accounts using the monetary system established by Charlemagne some 350 years earlier—that is, using pounds, shillings, and pence—despite the fact that some of these coins had never existed (Charlemagne never actually struck a silver pound), none of Charlemagne’s actual shillings and pence remained in circulation, and those coins that did circulate tended to vary enormously in size, weight, purity, and value.13 According to the Chartalists, this doesn’t really matter. What matters is that there is a uniform system for measuring credits and debts, and that this system remains stable over time. The
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221022According to Knapp, whether or not the actual, physical money stuff in circulation corresponds to this “imaginary money” is not particularly important. It makes no real difference whether it’s pure silver, debased silver, leather tokens, or dried cod—provided the state is willing to accept it in payment of taxes. Because whatever the state was willing to accept, for that reason, became currency. One of the most important forms of currency in England in Henry’s time were notched “tally sticks” used to record debts. Tally sticks were quite explicitly IOUs: both parties to a transaction would take a hazelwood twig, notch it to indicate the amount owed, and then split it in half. The creditor would keep one half, called “the stock” (hence the origin of the term “stock holder”) and the debtor kept the other, called “the stub” (hence the origin of the term “ticket stub.”) Tax assessors used such twigs to calculate amounts owed by local sheriffs. Often, though, rather than wait for the taxes to come due, Henry’s exchequer would often sell the tallies at a discount, and they would circulate, as tokens of debt owed to the government, to anyone willing to trade for them.
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231031Modern banknotes actually work on a similar principle, except in reverse.16 Recall here the little parable about Henry’s IOU. The reader might have noticed one puzzling aspect of the equation: the IOU can operate as money only as long as Henry never pays his debt. In fact this is precisely the logic on which the Bank of England—the first successful modern central bank—was originally founded. In 1694, a consortium of English bankers made a loan of £1,200,000 to the king. In return they received a royal monopoly on the issuance of banknotes. What this meant in practice was they had the right to advance IOUs for a portion of the money the king now owed them to any inhabitant of the kingdom willing to borrow from them, or willing to deposit their own money in the bank—in effect, to circulate or “monetize” the newly created royal debt. This was a great deal for the bankers (they got to charge the king 8 percent annual interest for the original loan and simultaneously charge interest on the same money to the clients who borrowed it), but it only worked as long as the original loan remained outstanding. To this day, this loan has never been paid back. It cannot be. If it ever were, the entire monetary system of Great Britain would cease to exist.
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X241110In 1894, the Greenbackers, who pushed for detaching the dollar from gold entirely to allow the government to spend freely on job-creation campaigns, invented the idea of the March on Washington—an idea that was to have endless resonance in U.S. history. L. Frank Baum’s book The Wonderful Wizard of Oz, which appeared in 1900, is often held to be a parable for the Populist campaign of William Jennings Bryan, who twice ran for president on the Free Silver platform—vowing to replace the gold standard with a bimetallic system that would allow the free creation of silver money alongside gold.22 As with the Greenbackers, one of the main constituencies for the movement was debtors: particularly, Midwestern farm families such as Dorothy’s, who had been facing a massive wave of foreclosures during the severe recession of the 1890s. According to the Populist reading, the Wicked Witches of the East and West represent the East and West Coast bankers (promoters of and benefactors from the tight money supply), the Scarecrow represented the farmers (who didn’t have the brains to avoid the debt trap), the Tin Woodsman was the industrial proletariat (who didn’t have the heart to act in solidarity with the farmers), the Cowardly Lion represented the political class (who didn’t have the courage to intervene). The yellow brick road, silver slippers, emerald city, and hapless Wizard presumably speak for themselves.23 “Oz” is of course the standard abbreviation for “ounce.”24 As an attempt to create a new myth, Baum’s story was remarkably effective. As political propaganda, less so. William Jennings Bryan failed in three attempts to win the presidency, the silver standard was never adopted, and few nowadays even remember what The Wonderful Wizard of Oz was originally supposed to be about.
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251190Actually, even the very earliest Vedic poems, composed sometime between 1500 and 1200 BC, evince a constant concern with debt—which is treated as synonymous with guilt and sin.33 There are numerous prayers pleading with the gods to liberate the worshipper from the shackles or bonds of debt. Sometimes these seem to refer to debt in the literal sense—Rig Veda 10.34, for instance, has a long description of the sad plight of gamblers who “wander homeless, in constant fear, in debt, and seeking money.” Elsewhere it’s clearly metaphorical. In these hymns, Yama, the god of death, figures prominently. To be in debt was to have a weight placed on you by Death. To be under any sort of unfulfilled obligation, any unkept promise, to gods or to men, was to live in the shadow of Death.
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X261251Or, to take another curious connection: Why were cattle so often used as money? The German historian Bernard Laum long ago pointed out that in Homer, when people measure the value of a ship or suit of armor, they always measure it in oxen—even though when they actually exchange things, they never pay for anything in oxen. It is hard to escape the conclusion that this was because an ox was what one offered the gods in sacrifice. Hence oxen represented absolute value. From Sumer to Classical Greece, silver and gold were dedicated as offerings in temples. Everywhere, money seems to have emerged from the thing most appropriate for giving to the gods.
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271261If you start from the barter theory of money, you have to resolve the problem of how and why you would come to select one commodity to measure just how much you want each of the other ones. If you start from a credit theory, you are left with the problem I described in the first chapter: how to turn a moral obligation into a specific sum of money, how the mere sense of owing someone else a favor can eventually turn into a system of accounting in which one is able to calculate exactly how many sheep or fish or chunks of silver it would take to repay the debt. Or in this case, how do we go from that absolute debt we owe to God to the very specific debts we owe our cousin, or the bartender?
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281278There is every reason to believe that our own money started the same way—even the English word “to pay” is originally derived from a word for “to pacify, appease”—as in, to give someone something precious, for instance, to express just how badly you feel about having just killed his brother in a drunken brawl, and how much you would really like to avoid this becoming the basis for an ongoing blood-feud.
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291316For one thing, the premise makes a great deal of intuitive sense. After all, we do owe everything we are to others. This is simply true. The language we speak and even think in, our habits and opinions, the kind of food we like to eat, the knowledge that makes our lights switch on and toilets flush, even the style in which we carry out our gestures of defiance and rebellion against social conventions—all of this we learned from other people, most of them long dead. If we were to imagine what we owe them as a debt, it could only be infinite.
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301381Faced with the potential for complete social breakdown, Sumerian and later Babylonian kings periodically announced general amnesties: “clean slates,” as economic historian Michael Hudson refers to them. Such decrees would typically declare all outstanding consumer debt null and void (commercial debts were not affected), return all land to its original owners, and allow all debt-peons to return to their families. Before long, it became more or less a regular habit for kings to make such a declaration on first assuming power, and many were forced to repeat it periodically over the course of their reigns. In Sumer, these were called “declarations of freedom”—and it is significant that the Sumerian word amargi, the first recorded word for “freedom” in any known human language, literally means “return to mother”—since this is what freed debt-peons were finally allowed to do.
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311474Comte, a philosopher and political pamphleteer now most famous for having first coined the term “sociology,” went so far, by the end of his life, as actually proposing a Religion of Society, which he called Positivism, broadly modeled on Medieval Catholicism, replete with vestments where all the buttons were on the back (so they couldn’t be put on without the help of others). In his last work, which he called a “Positivist Catechism,” he also laid down the first explicit theory of social debt. At one point someone asks an imaginary Priest of Positivism what he thinks of the notion of human rights. The priest scoffs at the idea. This is nonsense, he says, an error born of individualism. Positivism understands only duties. After all: We are born under a load of obligations of every kind, to our predecessors, to our successors, to our contemporaries. After our birth these obligations increase or accumulate before the point where we are capable of rendering anyone any service. On what human foundation, then, could one seat the idea of “rights”?
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321515THE READER MAY have noticed that there is an unresolved debate between those who see money as a commodity and those who see it as an IOU. So which one is it? By now, the answer should be obvious: it’s both. Keith Hart, probably the best-known current anthropological authority on the subject, pointed this out many years ago. There are, he famously observed, two sides to any coin: Look at a coin from your pocket. On one side is “heads”—the symbol of the political authority which minted the coin; on the other side is “tails”—the precise specification of the amount the coin is worth as payment in exchange. One side reminds us that states underwrite currencies and the money is originally a relation between persons in society, a token perhaps. The other reveals the coin as a thing, capable of
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331532As I’ve pointed out, often what was inside and what was outside were not especially clear. Within a community—a town, a city, a guild or religious society—pretty much anything could function as money, provided everyone knew there was someone willing to accept it to cancel out a debt. To offer one particularly striking example, in certain cities in nineteenth-century Siam, small change consisted entirely of porcelain Chinese gaming counters—basically, the equivalent of poker chips—issued by local casinos. If one of these casinos went out of business or lost its license, its owners would have to send a crier through the streets banging a gong and announcing that anyone holding such chits had three days to redeem them.3 For major transactions, of course, currency that was also acceptable outside the community (usually silver or gold again) was ordinarily employed.
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341546Throughout most of history, even where we do find elaborate markets, we also find a complex jumble of different sorts of currency. Some of these may have originally emerged from barter between foreigners: the cacao money of Mesoamerica or salt money of Ethiopia are frequently cited examples.5 Others arose from credit systems, or from arguments over what sort of goods should be acceptable to pay taxes or other debts. Such questions were often matters of endless contestation. One could often learn a lot about the balance of political forces in a given time and place by what sorts of things were acceptable as currency. For instance: in much the same way that colonial Virginia planters managed to pass a law obliging shopkeepers to accept their tobacco as currency, medieval Pomeranian peasants appear to have at certain points convinced their rulers to make taxes, fees, and customs duties, which were registered in Roman currency, payable in wine, cheese, peppers, chickens, eggs, and even herring—much to the annoyance of traveling merchants, who therefore had to either carry such things around in order to pay the tolls or buy them locally at prices that would have been more advantageous to their suppliers for that very reason.6 This was in an area with a free peasantry, rather than serfs. They were in a relatively strong political position. In other times and places, the interests of lords and merchants prevailed instead. Thus money is almost always something hovering between a commodity and a debt-token.
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351563Our two origin stories—the myth of barter and the myth of primordial debt—may appear to be about as far apart as they could be, but in their own way, they are also two sides of the same coin. One assumes the other. It’s only once we can imagine human life as a series of commercial transactions that we’re capable of seeing our relation to the universe in terms of debt.
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361596When humans did begin to form communities, Nietzsche continues, they necessarily began to imagine their relationship to the community in these terms. The tribe provides them with peace and security. They are therefore in its debt. Obeying its laws is a way of paying it back (“paying your debt to society” again).
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371624It all makes perfect sense if you start from Nietzsche’s initial premise. The problem is that the premise is insane. There is also every reason to believe that Nietzsche knew the premise was insane; in fact, that this was the entire point. What Nietzsche is doing here is starting out from the standard, common-sense assumptions about the nature of human beings prevalent in his day (and to a large extent, still prevalent)—that we are rational calculating machines, that commercial self-interest comes before society, that “society” itself is just a way of putting a kind of temporary lid on the resulting conflict. That is, he is starting out from ordinary bourgeois assumptions and driving them to a place where they can only shock a bourgeois audience. It’s a worthy game and no one has ever played it better; but it’s a game played entirely within the boundaries of bourgeois thought. It has nothing to say to anything that lies beyond it.
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381865Almost everyone continues to assume that in its fundamental nature, social life is based on the principle of reciprocity, and therefore that all human interaction can best be understood as a kind of exchange. If so, then debt really is at the root of all morality, because debt is what happens when some balance has not yet been restored.
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392116What marks commercial exchange is that it’s “impersonal”: who it is that is selling something to us, or buying something from us, should in principle be entirely irrelevant. We are simply comparing the value of two objects. True, as with any principle, in practice, this is rarely completely true. There has to be some minimal element of trust for a transaction to be carried out at all and, unless one is dealing with a vending machine, that usually requires some outward display of sociality. Even in the most impersonal shopping mall or supermarket, clerks are expected to at least simulate personal warmth, patience, and other reassuring qualities; in a Middle Eastern bazaar, one might have to go through an elaborate process of establishing a simulated friendship, sharing tea, food, or tobacco, before engaging in similarly elaborate haggling—an interesting ritual that begins by establishing sociality through baseline communism—and continues with an often prolonged mock battle over prices. It’s all done on the basis of the assumption that buyer and seller are, at least at that moment, friends (and thus each entitled to feel outraged and indignant at the other’s unreasonable demands), but it’s all a little piece of theater. Once the object changes hands, there is no expectation that the two will ever have anything to do with each other again.26 Most often this sort of haggling—in Madagascar the term for it literally means “to battle out a sale” (miady varotra)—can be a source of pleasure in itself.
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402179Above all is the tacit moral principle that one must always pick on someone one’s own size. To challenge someone obviously older, richer, and more honorable is to risk being snubbed, and hence humiliated; to overwhelm a poor but respectable man with a gift he couldn’t possibly pay back is simply cruel, and will do equal damage to your reputation.
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412236To illustrate what I mean by this, let us imagine a kind of continuum of one-sided social relations, ranging from the most exploitative to the most benevolent. At one extreme is theft, or plunder; on the other selfless charity.37 Only at these two extremes is it is possible to have material interactions between people who otherwise have no social relation of any kind. Only a lunatic would mug his next-door neighbor. A band of marauding soldiers or nomadic horsemen falling on a peasant hamlet to rape and pillage also obviously have no intention of forming any ongoing relations with the survivors. But in a similar way, religious traditions often insist that the only true charity is anonymous—in other words, not meant to place the recipient in one’s debt.
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422262This is what I mean when I say that hierarchy operates by a principle that is the very opposite of reciprocity. Whenever the lines of superiority and inferiority are clearly drawn and accepted by all parties as the framework of a relationship, and relations are sufficiently ongoing that we are no longer simply dealing with arbitrary force, then relations will be seen as being regulated by a web of habit or custom.
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432281Often, such arrangements can turn into a logic of caste: certain clans are responsible for weaving the ceremonial garments, or bringing the fish for royal feasts, or cutting the king’s hair. They thus come to be known as weavers or fishermen or barbers.41 This last point can’t be overemphasized because it brings home another truth regularly overlooked: that the logic of identity is, always and everywhere, entangled in the logic of hierarchy. It is only when certain people are placed above others, or where everyone is being ranked in relation to the king, or the high priest, or Founding Fathers, that one begins to speak of people bound by their essential nature: about fundamentally different kinds of human being. Ideologies of caste or race are just extreme examples. It happens whenever one group is seen as raising themselves above others, or placing themselves below others, in such a way that ordinary standards of fair dealing no longer apply.
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442473Debt 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—but for whom there is some way to set matters straight. In the case of gift-giving, as we’ve seen, this requires a certain equality of status. That’s why our economics professor didn’t feel any sense of obligation—any debt of honor—if taken out to dinner by someone who ranked either much higher or much lower than himself. With money loans, all that is required is that the two parties be of equal legal standing. (You can’t lend money to a child, or to a lunatic. Well, you can, but the courts won’t help you get it back.)
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452491This 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 herself to equality, there is obviously something wrong with her; it must be her fault.
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462533In English, “thank you” derives from “think.” It originally meant, “I will remember what you did for me”—which is usually not true either—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.63 Saying “you’re welcome” or “it’s nothing” (French de rien, Spanish de nada)—the latter has at least the advantage of often being literally true—is a way of reassuring the one to whom one has passed the salt that you are not actually inscribing a debit in your imaginary moral account book. So is saying “my pleasure”—you are saying, “No, actually, it’s a credit, not a debit—you did me a favor because in asking me to pass the salt, you gave me the opportunity to do something I found rewarding in itself!”64
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472604And what he says is true. If we insist on defining all human interactions as matters of people giving one thing for another, then any ongoing human relations can only take the form of debts. Without them, no one would owe anything to anybody. A world without debt would revert to primordial chaos, a war of all against all; no one would feel the slightest responsibility for one another; the simple fact of being human would have no significance; we would all become isolated planets who couldn’t even be counted on to maintain our proper orbits.
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482696In most human economies, money is used first and foremost to arrange marriages. The simplest and probably most common way of doing this was by being presented as what used to be called “brideprice”: a suitor’s family would deliver a certain number of dog teeth, or cowries, or brass rings, or whatever is the local social currency, to a woman’s family, and they would present their daughter as his bride. It’s easy to see why this might be interpreted as buying a woman, and many colonial officials in Africa and Oceania in the early part of the twentieth century did indeed come to that conclusion. The practice caused something of a scandal, and by 1926, the League of Nations was debating banning the practice as a form of slavery. Anthropologists objected. Really, they explained, this was nothing like the purchase of, say, an ox—let alone a pair of sandals. After all, if you buy an ox, you don’t have any responsibilities to the ox. What you are really buying is the right to dispose of the ox in any way that pleases you. Marriage is entirely different, since a husband will normally have just as many responsibilities toward his wife as his wife will have toward him. It’s a way of rearranging relations between people. Second of all, if you were really buying a wife, you’d be able to sell her. Finally, the ultimate significance of the payment concerns the status of the woman’s children: if he’s buying anything, it’s the right to call her offspring his own.
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492708The anthropologists ended up winning the argument, and “brideprice” was dutifully redubbed “bridewealth.” But they never really answered the question: What is actually happening here? When a Fijian suitor’s family presents a whale tooth to ask for a woman’s hand in marriage, is this an advance payment for the services the woman will provide in cultivating her future husband’s gardens? Or is he purchasing the future fertility of her womb? Or is this a pure formality, the equivalent of the dollar that has to change hands in order to seal a contract? According to Rospabé, it’s none of these. The whale tooth, however valuable, is not a form of payment. It is really an acknowledgment that one is asking for something so uniquely valuable that payment of any sort would be impossible. The only appropriate payment for the gift of a woman is the gift of another woman; in the meantime, all one can do is to acknowledge the outstanding debt.
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502788Much as in the case of the Nuer, there were complicated schedules of exactly how many fathoms of wampum were paid over, depending on the status of the victim and the nature of the crime. As with the Nuer, too, everyone insisted that this was not payment. The value of the wampum in no sense represented the value of the dead man’s life: The present of white wampum was not in the nature of a compensation for the life of the deceased, but of a regretful confession of the crime, with a petition for forgiveness. It was a peace-offering, the acceptance of which was pressed by mutual friends …19 Actually, in many cases there was also some way to manipulate the system to turn payments meant to assuage one’s rage and grief into ways of creating a new life that would in some sense substitute for the one that was lost. Among the Nuer, forty cattle were set as the standard fee for bloodwealth. But it was also the standard rate of bridewealth. The logic was this: if a man had been murdered before he was able to marry and produce offspring, it’s only natural that his spirit would be angry. He had been, effectively, robbed of his eternity. The best solution would be to use the cattle paid in settlement to acquire what was called a “ghost-wife”: a woman who would then be formally married to the dead man. Sometimes she was paired off with one of the victim’s brothers, sometimes she was left to cohabit with anyone she liked; it didn’t really matter too much who impregnated her, since he would be in no sense the father of her children. Any children she produced would be considered the children of the victim’s ghost—and as a result, any boys among them were seen as having been born with a particular commitment to someday avenge his death.20
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512807The Iroquois, who traced descent in the female line, did not trade women in this fashion. However, they had another, more direct approach. If a man died—even of natural causes—his wife’s relatives might “put his name upon the mat,” sending off belts of wampum to commission a war party, which would then raid an enemy village to secure a captive. The captive could either be tortured to death, or, if the clan matrons were in a benevolent mood (one could never tell; the grief of mourning is tricky), adopted: this was signified by throwing a belt of wampum around his shoulders, whereon he would be given the name of the deceased and be considered, from that moment on, married to the victim’s wife, the owner of his personal possessions, and in every way, effectively, the exact same person as the dead man used to be.22 All of this merely serves to underline Rospabé’s basic point, which is that money can be seen, in human economies, as first and foremost the acknowledgment of the existence of a debt that cannot be paid.
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522998As an example, let us once again return to the Tiv. The reader will recall that if a man did not have a sister or a ward to give in exchange for one’s wife, it was possible to assuage her parents and guardians by gifts of money. However, such a wife would never be considered truly his. Here too, there was one dramatic exception. A man could buy a slave, a woman kidnapped in a raid from a distant country.41 Slaves, after all, had no parents, or could be treated as if they didn’t; they had been forcibly removed from all those networks of mutual obligation and debt in which ordinary people acquired their outward identities. This was why they could be bought and sold. Once married, though, a purchased wife would quickly develop new ties. She was no longer a slave, and her children were perfectly legitimate—more so, in fact, than those of a wife who was merely acquired through the continual payment of brass rods. We have perhaps a general principle: to make something saleable, in a human economy, one needs to first rip it from its context. That’s what slaves are: people stolen from the community that made them what they are. As strangers to their new communities, slaves no longer had mothers, fathers, kin of any sort. This is why they could be bought and sold or even killed: because the only relation they had was to their owners. A Lele village’s ability to organize raids and kidnap a woman from an alien community seems to have been the key to its ability to start trading women for money—even if in their case, they could do so only to a very limited extent. After all, her relatives were not very far away, and they would surely come around demanding an explanation. In the end, someone would have to come up with an arrangement that everyone could live with.42 Still, I would also insist that there is something more than this. One gets the distinct sense, in much of the literature, that many African societies were haunted by the awareness that these elaborate networks of debt could, if things went just slightly wrong, be transformed into something absolutely terrible. The Tiv are a dramatic case in point.
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533070Still, anthropologists have come to understand, over the years, that every society is haunted by slightly different nightmares, and these differences are significant. Horror stories, whether about vampires, ghouls, or flesh-eating zombies, always turn out to reflect some aspect of the tellers’ own social lives, some terrifying potential, in the way they are accustomed to interact with each other, that they do not wish to acknowledge or confront, but also cannot help but talk about.49 In the Tiv case, what would that be? Clearly, Tiv did have a major problem with authority. They lived in a landscape dotted with compounds, each organized around a single older man with his numerous wives, children, and assorted hangers-on. Within each compound, that man had near-absolute authority. Outside there was no formal political structure, and Tiv were fiercely egalitarian. In other words: all men aspired to become the masters of large families, but they were extremely suspicious of any other form of mastery. Hardly surprising, then, that Tiv men were so ambivalent about the nature of power that they became convinced that the very qualities that allow a man to rise to legitimate prominence could, if taken just a little bit further, turn him into a monster.50 In fact, most Tiv seemed to assume that most male elders were witches, and that if a young person died, they were probably being paid off for a flesh-debt.
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543288How does it become possible to treat people as if they are identical? The Lele example gave us a hint: to make a human being an object of exchange, one woman equivalent to another, for example, requires first of all ripping her from her context; that is, tearing her away from that web of relations that makes her the unique conflux of relations that she is, and thus, into a generic value capable of being added and subtracted and used as a means to measure debt. This requires a certain violence. To make her equivalent to a bar of camwood takes even more violence, and it takes an enormous amount of sustained and systematic violence to rip her so completely from her context that she becomes a slave.
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553342The Lele were fortunate enough to have largely escaped the devastations of the slave trade; the Tiv were sitting practically on the teeth of the shark, and they had to make heroic efforts to keep the threat at bay. Nonetheless, in both cases there were mechanisms for forcibly removing young women from their homes, and it was precisely this that made them exchangeable—though in each case, too, a principle stipulated that a woman could only be exchanged for another woman. The few exceptions, when women could be exchanged for other things, emerged directly from war and slavery—that is, when the level of violence was significantly ratcheted up. The slave trade, of course, represented violence on an exponentially different scale. We are speaking here of destruction of genocidal proportions, in world-historic terms, comparable only to events like the destruction of New World civilizations or the Holocaust. Neither do I mean in any way to blame the victims: we need only imagine what would be likely to happen in our own society if a group of space aliens suddenly appeared, armed with undefeatable military technology, infinite wealth, and no recognizable morality—and announced that they were willing to pay a million dollars each for human workers, no questions asked. There will always be at least a handful of people unscrupulous enough to take advantage of such a situation—and a handful is all it takes.
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563432So what is slavery? I’ve already begun to suggest an answer in the last chapter. Slavery is the ultimate form of being ripped from one’s context, and thus from all the social relationships that make one a human being. Another way to put this is that the slave is, in a very real sense, dead.
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573500Some of the most genuinely archaic forms of money we know about appear to have been used precisely as measures of honor and degradation: that is, the value of money was, ultimately, the value of the power to turn others into money. The curious puzzle of the cumal—the slave-girl money of medieval Ireland—provides one dramatic illustration. Let us turn to it now.
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583601What makes Medieval Irish laws seem so peculiar from our perspective is that their exponents had not the slightest discomfort with putting an exact monetary price on human dignity. For us, the notion that the sanctity of a priest or the majesty of a king could be held equivalent to a million fried eggs or a hundred thousand haircuts is simply bizarre. These are precisely the things that ought to be considered beyond all possibility of quantification. If Medieval Irish jurists felt otherwise, it was because people at that time did not use money to acquire eggs or haircuts.28 It was the fact that it was still a human economy, in which money was used for social purposes, that made it possible to create such an intricate system whereby it was possible not just to measure but to add and subtract specific quantities of human dignity—and in doing so, provide us with a unique window into the true nature of honor itself.
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593611In ancient Greek, the word for “honor” was tīme. In Homer’s time, the term appears to have been used much like the Irish term “honor price”: it referred both to the glory of the warrior and the compensation paid as damages in case of injury or insult. Yet with the rise of markets over the next several centuries, the meaning of the word tīme began to change. On the one hand, it became the word for “price”—as in, the price of something one buys in the market. On the other, it referred to an attitude of complete contempt for markets. Actually, this is still the case today: In Greece the word “timi” means honor, which has been typically seen as the most important value in Greek village society. Honor is often characterized in Greece as an open-handed generosity and blatant disregard for monetary costs and counting. And yet the same word also means “price” as in the price of a pound of tomatoes.
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603642In the very earliest Sumerian texts, particularly those from roughly 3000 to 2500 BC, women are everywhere. Early histories not only record the names of numerous female rulers, but make clear that women were well represented among the ranks of doctors, merchants, scribes, and public officials, and generally free to take part in all aspects of public life. One cannot speak of full gender equality: men still outnumbered women in all these areas. Still, one gets the sense of a society not so different than that which prevails in much of the developed world today. Over the course of the next thousand years or so, all this changes. The place of women in civic life erodes; gradually, the more familiar patriarchal pattern takes shape, with its emphasis on chastity and premarital virginity, a weakening and eventually wholesale disappearance of women’s role in government and the liberal professions, and the loss of women’s independent legal status, which renders them wards of their husbands. By the end of the Bronze Age, around 1200 BC, we begin to see large numbers of women sequestered away in harems and (in some places, at least) subjected to obligatory veiling.
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613671It is common anthropological wisdom that bridewealth tends to be typical of situations where population is relatively thin, land not a particularly scarce resource, and therefore, politics are all about controlling labor. Where population is dense and land at a premium, one tends to instead find dowry: adding a woman to the household is adding another mouth to feed, and rather than having to be paid off, a bride’s father is expected to contribute something (land, wealth, money …) to help support his daughter in her new home.35 In Sumerian times, for instance, the main payment at marriage was a huge gift of food paid by the groom’s father to the bride’s, destined to provide a sumptuous feast for the wedding.36 Before long, however, this seems to have split into two payments, one for the wedding, another to the woman’s father, calculated—and often paid—in silver.37 Wealthy women sometimes appear to have ended up with the money: at least, many appear to have to worn silver arm and leg rings of identical denominations.
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623696As I pointed out in the last chapter, anthropologists have long emphasized that paying bridewealth is not the same as buying a wife. After all—and this was one of the clinching arguments, remember, in the original 1930s League of Nations debate—if a man were really buying a woman, wouldn’t he also be able to sell her? Clearly African and Melanesian husbands were not able to sell their wives to some third party. At most, they could send them home and demand back their bridewealth.42 A Mesopotamian husband couldn’t sell his wife either. 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 involved a responsibility for care and protection, became property rights that could indeed be bought and sold.
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633720It’s also important to emphasize that Sumerian men do not appear, at least in this earliest period, to have seen anything troubling about the idea of their sisters having sex for money. To the contrary, insofar as prostitution did occur (and remember, it could not have been nearly so impersonal, cold-cash a relation in a credit economy), Sumerian religious texts identify it as among the fundamental features of human civilization, a gift given by the gods at the dawn of time. Procreative sex was considered natural (after all, animals did it). Non-procreative sex, sex for pleasure, was divine.
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643862The famous Greek obsession with male honor that still informs so much of the texture of daily life in rural communities in Greece hearkens back not so much to Homeric honor but to this aristocratic rebellion against the values of the marketplace, which everyone, eventually, began to make their own.62 The effects on women, though, were even more severe than they had been in the Middle East. Already by the age of Socrates, while a man’s honor was increasingly tied to disdain for commerce and assertiveness in public life, a woman’s honor had come to be defined in almost exclusively sexual terms: as a matter of virginity, modesty, and chastity, to the extent that respectable women were expected to be shut up inside the household and any woman who played a part in public life was considered for that reason a prostitute, or tantamount to one.63 The Assyrian habit of veiling was not widely adopted in the Middle East, but it was adopted in Greece. As much as it flies in the face of our stereotypes about the origins of “Western” freedoms, women in democratic Athens, unlike those of Persia or Syria, were expected to wear veils when they ventured out in public.
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653904We might say, then, that money introduced a democratization of desire. Insofar as everyone wanted money, everyone, high and low, was pursuing the same promiscuous substance. But even more: increasingly, they did not just want money. They needed it. This was a profound change. In the Homeric world, as in most human economies, we hear almost no discussion of those things considered necessary to human life (food, shelter, clothing) because it is simply assumed that everybody has them. A man with no possessions could, at the very least, become a retainer in some rich man’s household. Even slaves had enough to eat.70 Here too, the prostitute was a potent symbol for what had changed, since while some of the denizens of brothels were slaves, others were simply poor; the fact that their basic needs could no longer be taken for granted were precisely what made them submit to others’ desires. This extreme fear of dependency on others’ whims lies at the basis of the Greek obsession with the self-sufficient household.
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664136As for dominium, the word is derived from dominus, meaning “master” or “slave-owner,” but ultimately from domus, meaning “house” or “household.” It’s of course related to the English term “domestic,” which even now can be used either to mean “pertaining to private life,” or to refer to a servant who cleans the house. Domus overlaps somewhat in meaning with familia, “family”—but, as proponents of “family values” might be interested to know, familia itself ultimately derives from the word famulus, meaning “slave.” A family was originally all those people under the domestic authority of a paterfamilias, and that authority was, in early Roman law at least, conceived as absolute.101 A man did not have total power over his wife, since she was still to some degree under the protection of her own father, but his children, slaves, and other dependents were his to do with as he wanted—at least in early Roman law, he was perfectly free to whip, torture, or sell them. A father could even execute his children, provided he found them to have committed capital crimes.102 With his slaves, he didn’t even need that excuse.
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674153The early history of Rome, like the histories of early Greek city-states, was one of continual political struggle between creditors and debtors, until the Roman elite eventually figured out the principle that most successful Mediterranean elites learned: that a free peasantry means a more effective army, and that conquering armies can provide war captives who can do anything debt bondsmen used to do, and therefore, a social compromise—allowing limited popular representation, banning debt slavery, channeling some of the fruits of empire into social-welfare payments—was actually in their interest. Presumably, the absolute power of fathers developed as part of this whole constellation in the same way as we’ve seen elsewhere. Debt bondage reduced family relations to relations of property; social reforms retained the new power of fathers but protected them from debt. At the same time, the increasing influx of slaves soon meant that any even moderately prosperous household was likely to contain slaves. This, in turn, meant that the logic of conquest extended into the most intimate aspects of everyday life. Conquered people poured one’s bath and combed one’s hair. Conquered tutors taught one’s children about poetry. Since slaves were sexually available to owners and their families, as well as to their friends and dinner guests, it is likely that most Romans’ first sexual experience was with a boy or girl whose legal status was conceived as that of a defeated enemy.
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684378There 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.
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694393If 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.
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704406For much of human history, then, an ingot of gold or 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.
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714591Whatever the reasons, the result, Jaspers argued, was the first period in history in which human beings applied principles of reasoned inquiry to the great questions of human existence. He observed that all these great regions of the world, China, India, and the Mediterranean, witnessed the emergence of almost exactly the same collection of philosophical tendencies, from skepticism to idealism—in fact, that philosophers in each managed to simultaneously develop all the major positions on the nature of cosmos, mind, action, and the ends of human existence that have remained the stuff of philosophical debate ever since. As one of Jaspers’ disciples later put it—overstating only slightly—“no really new ideas have been added since that time.”2 For Jaspers, the period begins with the Persian prophet Zoroaster, around 800 BC, and ends around 200 BC, to be followed by a Spiritual Age that centers on figures like Jesus and Mohammed. For my own purposes, I find it more useful to combine the two. Let us define the Axial Age, then, as running from 800 BC to 600 AD.3 This makes the Axial Age the period that saw the birth not only of all the world’s major philosophical tendencies, but also all of today’s major world religions: Zoroastrianism, Prophetic Judaism, Buddhism, Jainism, Hinduism, Confucianism, Taoism, Christianity, and Islam.
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724722Alexander was also the man responsible for destroying what remained of the ancient credit systems, since not only the Phoenicians but also the old Mesopotamian heartland had resisted the new coin economy. His armies not only destroyed Tyre; they also dethesaurized the gold and silver reserves of Babylonian and Persian temples, the security on which their credit systems were based, and insisted that all taxes to his new government be paid in his own money. The result was to “release the accumulated specie of century onto the market in a matter of months,” something like 180,000 talents, or in contemporary terms, an estimated $285 billion.
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734741In fact, the entire Roman empire, at its height, could be understood as a vast machine for the extraction of precious metals and their coining and distribution to the military—combined with taxation policies designed to encourage conquered populations to adopt coins in their everyday transactions. Even so, for most of its history, use of coins was heavily concentrated in two zones within the empire: Italy and a few big cities, and along the frontiers, where the legions were actually stationed. In areas where there were neither mines nor military operations, older credit systems would appear to have continued largely as before.
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744782Both kingdoms and republics produced their own silver and copper coinage, but in some ways the republics were more traditional, since the self-governing “populace in arms” consisted of the traditional Ksatriya or warrior caste, who typically held their lands in common and had them worked by serfs or slaves.33 The kingdoms, on the other hand, were founded on a fundamentally new institution: a trained, professional army, open to young men of a wide variety of backgrounds, their equipment supplied by central authorities (soldiers were obliged to check their arms and armor when they entered cities), and provided with generous salaries. Whatever their origins, here too, coins and markets sprung up above all to feed the machinery of war. Magadha, which ultimately came out on top, did so largely because it controlled most of the mines. Kautilya’s Arthasastra, a political treatise written by one of the chief ministers for the Mauryan dynasty that succeeded it (321–185 BC), stated the matter precisely: “The treasury is based upon mining, the army upon the treasury; he who has army and treasury may conquer the whole wide earth.”34 The government drew its personnel first of all from a landed class, which provided trained administrators, but even more, full-time soldiers: the salaries of each rank of soldier and administrator were carefully stipulated. These armies could be huge. Greek sources report that Magadha could put to the field a force of 200,000 infantry, 20,000 horses, and about 4,000 elephants—and that Alexander’s men mutinied rather than have to face them. Whether on campaign or in garrison, they were inevitably accompanied by a range of different sorts of camp followers—petty traders, prostitutes, and hired servants—which, with the soldiers, seems to have been the very medium through which a cash economy had originally taken form.35 By Kautilya’s time, a few hundred years later, the state was inserting itself into every aspect of the process: Kautilya suggests paying soldiers apparently generous wages, then secretly replacing hawkers with government agents who could charge them twice the normal rates for supplies. He also recommends organizing prostitutes under a ministry in which they could be trained as spies, so as to make detailed reports on their clients’ loyalties.
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754836Early Buddhist economic attitudes have long been considered something of a puzzle. On the one hand, monks could not own property as individuals; they were expected to live an austere communistic life with little more than a robe and begging bowl as personal possessions, and they were strictly forbidden to so much as touch anything made of gold or silver. On the other hand, however suspicious of precious metals, Buddhism had always had a liberal attitude toward credit arrangements. It is one of the few of the great world religions that has never formally condemned usury.43 Taken in the context of the times, however, there’s nothing particularly mysterious about any of this. It makes perfect sense for a religious movement that rejected violence and militarism, but that was in no way opposed to commerce.44 As we shall see, while Aśoka’s own empire was not long to endure, soon to be replaced by a succession of ever weaker and mostly smaller states, Buddhism took root. The decline of the great armies eventually led to the near-disappearance of coinage, but also to a veritable efflorescence of increasingly sophisticated forms of credit.
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764868Under the Roman empire, schools of philosophy like the Stoics, Epicureans, and Neo-Platonists did become movements of a sort: at least in the sense that they had thousands of educated adherents who “practiced” philosophy not only by reading, writing, and debating, but even more by meditation, diet, and exercise. Still, philosophical movements were basically confined to the civic elite; it was only with the rise of Christianity and other religious movements that philosophy moved beyond it.
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774912Cash transactions between strangers were different, and all the more so when trading is set against a background of war and emerges from disposing of loot and provisioning soldiers; when one often had best not ask where the objects traded came from, and where no one is much interested in forming ongoing personal relationships anyway. Here, transactions really do become simply a figuring-out of how many of X will go for how many of Y, of calculating proportions, estimating quality, and trying to get the best deal for oneself. The result, during the Axial Age, was a new way of thinking about human motivation, a radical simplification of motives that made it possible to begin speaking of concepts like “profit” and “advantage”—and imagining that this is what people are really pursuing, in every aspect of existence, as if the violence of war or the impersonality of the marketplace has simply allowed them to drop the pretense that they ever cared about anything else. It was this, in turn, that allowed human life to seem like it could be reduced to a matter of means-to-end calculation, and hence something that could be examined using the same means that one used to study the attraction and repulsion of celestial bodies.
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784938Lü adopted the prince’s cause and eventually contrived to make him King of Qin. He went on to became first minister for the king’s son, Qin Shi Huang, helping him defeat the other Warring States to became the first Emperor of China. We still have a compendium of political wisdom that Lü commissioned for the new emperor, which contains such military advice as the following: As a general principle, when an enemy’s army comes, it seeks some profit. Now if they come and find the prospect of death instead, they will consider running away the most profitable thing to do. When all one’s enemies consider running to be the most profitable thing to do, no blades will cross. This is the most essential point in military matters.57
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795025Axial Age spirituality, then, is built on a bedrock of materialism. This is its secret; one might almost say, the thing that has become invisible to us.67 But if one looks at the very beginnings of philosophical inquiry in Greece and India—the point when there was as yet no difference between what we’d now call “philosophy” and what we’d now call “science”—this is exactly what one finds. “Theory,” if we can call it that, begins with the questions: “What substance is the world made of?” “What is the underlying material behind the physical forms of objects in the world?” “Is everything made up of varying combinations of certain basic elements (earth, air, water, fire, stone, motion, mind, number …), or are these basic elements just the forms taken by some even more elementary substance (for instance, as Nyāya and later Democritus proposed, atomic particles …)”68 In just about every case, some notion of God, Mind, Spirit, some active organizing principle that gave form to and was not itself substance, emerged as well. But this was the kind of spirit that, like Leenhardt’s God, only emerges in relation to inert matter.69 To connect this impulse, too, with the invention of coinage might seem like pushing things a bit far, but, at least for the Classical world, there is an emerging scholarly literature—first set off by Harvard literary theorist Marc Shell, and more recently set forth by British classicist Richard Seaford in a book called Money and the Early Greek Mind—that aims to do exactly that.70
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805060At least within the communities that created them, ancient coins were always worth more than the gold, silver, or copper of which they were composed. Seaford refers to this extra value by the inelegant term “fiduciarity,” which comes from the term for public trust, the confidence a community places in its currency.74 True, at the height of Classical Greece, when there were hundreds of city-states producing different currencies according to a number of different systems of weights and denominations, merchants often did carry scales and treat coins—particularly foreign coins—like so many chunks of silver, just as Indian merchants seem to have treated Roman coins; but within a city, that city’s currency had a special status, since it was always acceptable at face value when used to pay taxes, public fees, or legal penalties. This is, incidentally, why ancient governments were so often able to introduce base metal into their coins without leading to immediate inflation; a debased coin might have lost value when traded overseas, but at home, it was still worth just as much when purchasing a license, or entering the public theater.75 This is also why, during public emergencies, Greek city-states would occasionally strike coins made entirely of bronze or tin, which everyone would agree, while the emergency lasted, to treat as if they were really made of silver.
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815156Where physical escape is not possible, what, exactly, is an oppressed peasant supposed to do? Sit and contemplate her misery? At the very least, otherworldly religions provided glimpses of radical alternatives. Often they allowed people to create other worlds within this one, liberated spaces of one sort or another. It is surely significant that the only people who succeeded in abolishing slavery in the ancient world were religious sects, such as the Essenes—who did so, effectively, by defecting from the larger social order and forming their own utopian communities.
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825296There is a peculiar tension here, a kind of paradox. Debt and credit arrangements may well have played a crucial role in creating the Indian village system, but they could never really become their basis. It might have made a certain sense to declare that, just as Brahmins had to dispatch their debts to the gods, everyone should be, in a certain sense, in debt to those above them. But in another sense, that would have completely subverted the very idea of caste, which was that the universe was a vast hierarchy in which different sorts of people were assumed to be of fundamentally different natures, that these ranks and grades were fixed forever, and that when goods and services moved up and down the hierarchy, they followed not principles of exchange at all but (as in all hierarchical systems) custom and precedent. The French anthropologist Louis Dumont made the famous argument that one cannot even really talk about “inequality” here, because to use that phrase implies that one believes people should or could be equal, and this idea was completely alien to Hindu conceptions.18 For them to have imagined their responsibilities as debts would have been profoundly subversive, since debts are by definition arrangements between equals—at least in the sense that they are equal parties to a contract—that could and should be repaid.
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835326The two great threats to the authorities were always the same: the nomadic peoples to the north (who they systematically bribed, but who nonetheless periodically swept over and conquered sections of China) and popular unrest and rebellion. The latter was almost constant, and on a scale unknown anywhere else in human history. There were decades in Chinese history when the rate of recorded peasant uprisings was roughly 1.8 per hour.21 What’s more, such uprisings were frequently successful. Most of the most famous Chinese dynasties that were not the product of barbarian invasion (the Yuan or Qing) were originally peasant insurrections (the Han, Tang, Song, and Ming). In no other part of the world do we see anything like this.
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845438Other schools concentrated not on karmic debt, but on one’s debt to one’s parents. Where Confucians built their system of morality above all on filial piety to fathers, Chinese Buddhists were primarily concerned with mothers, with the care and suffering required in raising, feeding, and educating children. A mother’s kindness is unlimited, her selflessness absolute; this was seen to be embodied above all in the act of breastfeeding, the fact that mothers transform their very flesh and blood into milk; they feed their children with their own bodies. In doing so, however, they allow unlimited love to be precisely quantified. One author calculated that the average infant absorbs precisely 180 pecks of mother’s milk in its first three years of life, and this constitutes its debt as an adult. The figure soon became canonical. To repay this milk debt, or indeed one’s debt to one’s parents more generally, was simply impossible. “If you stacked up jewels from the ground up to the twenty-eighth heaven,” wrote one Buddhist author, “it would not compare” with the value of your parent’s nurturance.38 Even if you were to “cut your own flesh to offer her three times a day for four billion years,” wrote another, “it would not pay back even a single day” of what your mother did for you.
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855495It perhaps stands to reason that Chinese Buddhism, a religion of merchants that then took popular roots, should have developed in this direction: a genuine theology of debt, even perhaps a practice of absolute self-sacrifice, of abandoning everything, one’s fortune or even one’s life, that ultimately led to collectively managed finance capital. The reason that the result seems so weird, so full of paradoxes, is that it is again an attempt to apply the logic of exchange to questions of Eternity.
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865499Recall an idea from earlier in the book: exchange, unless it’s an instantaneous cash transaction, creates debts. Debts linger over time. If you imagine all human relations as exchange, then insofar as people do have ongoing relations with one another, those relations are laced with debt and sin. The only way out is to annihilate the debt, but then social relations vanish too. This is quite in accord with Buddhism, whose ultimate aim is indeed the attainment of “emptiness,” absolute liberation, the annihilation of all human and material attachments, since these are all ultimately causes of suffering. For Mahayana Buddhists, however, absolute liberation cannot be achieved by any one being independently; the liberation of each depends on all the others; therefore, until the end of time, such matters are in a certain sense always in suspension. In the meantime, exchange dominates: “One purchases felicity, and sells one’s sins, just as in commercial operations.” Even acts of charity and self-sacrifice are not purely generous; one is purchasing “merit” from the bodhisattvas.46 The notion of infinite debt comes in when this logic slams up against the Absolute, or, one might perhaps better say, against something that utterly defies the logic of exchange. Because there are things that do.
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875538China was unusual in that it was one place where an Axial Age empire managed to survive—though, at first, only barely. Chinese governments did manage to keep coins in circulation in most places most of the time. This was made easier by their reliance exclusively on small-denomination coins made of bronze. Even so, it clearly took enormous efforts. As usual, we don’t know a lot about how everyday economic transactions took place, but what we do know suggests that in small-scale transactions, coins were probably most often used in dealing with strangers. As elsewhere, local shopkeepers and merchants extended credit. Most accounts seem to have been kept through the use of tally sticks, strikingly similar to those used in England, except that rather than hazelwood they were usually made of a split piece of notched bamboo. Here, too, the creditor took one half, and the debtor held the other; they were joined at the moment of repayment, and often broken afterward to mark the cancellation of the debt.48 To what degree were they transferable? We don’t really know. Most of what we do know is from casual references in texts that are mainly about something else: anecdotes, jokes, and poetic allusions.
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885556Tallies weren’t just used for loans, but for any sort of contract—which is why early paper contracts also had to be cut in half and one half kept by each party.52 With paper contracts, there was a definite tendency for the creditor’s half to function as an IOU and thus become transferable. By 806 AD, for instance, right around the apogee of Chinese Buddhism, merchants moving tea over long distances from the far south of the country and officials transporting tax payments to the capital, all of them concerned with the dangers of carrying bullion over long distances, began to deposit their money with bankers in the capital and devised a system of promissory notes. They were called “Flying Cash,” also divided in half, like tallies, and redeemable for cash in their branches in the provinces. They quickly started passing from hand to hand and operated something like currency. The government first tried to forbid their use, then a year or two later—and this became a familiar pattern in China—when it realized that it could not suppress them, switched gears and established a bureau empowered to issue such notes themselves.
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895585Nonetheless, the main point I’d like to emphasize here is that terms like “fiat money,” however common, are deceptive. Almost all of the new forms of paper money that emerged were not originally created by governments at all; they were simply ways of recognizing and expanding the use of credit instruments that emerged from everyday economic transactions. If it was only China that developed paper money in the Middle Ages, this was largely because only in China was there a government large and powerful enough, but also, sufficiently suspicious of its mercantile classes, to feel it had to take charge of such operations itself.
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905598Since people who live in Western Europe have so long been in the habit of thinking of Islam as the very definition of “the East,” it’s easy to forget that, from the perspective of any other great tradition, the difference between Christianity and Islam is almost negligible. One need only pick up a book on, say, medieval Islamic philosophy to discover disputes between the Baghdad Aristoteleans and the neo-Pythagoreans in Basra, or Persian Neo-Platonists—essentially, scholars doing the same work of trying to square the revealed religion tradition beginning with Abraham and Moses with the categories of Greek philosophy, and doing so in a larger context of mercantile capitalism, universalistic missionary religion, scientific rationalism, poetic celebrations of romantic love, and periodic waves of fascination with mystical wisdom from the East.
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915613The prevailing Islamic attitude toward law, government, and economic matters was the exact opposite of that prevalent in China. Confucians were suspicious of governance through strict codes of law, preferring to rely on the inherent sense of justice of the cultivated scholar—a scholar who was simply assumed to also be a government official. Medieval Islam, on the other hand, enthusiastically embraced law, which was seen as a religious institution derived from the Prophet, but tended to view government, more often than not, as an unfortunate necessity, an institution that the truly pious would do better to avoid.59
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925669In a way, one can see the establishment of Islamic courts as the ultimate triumph of the patriarchal rebellion that had begun so many thousands of years before; a universal embrace of the ethos of the desert or the steppe, real or imagined, even as the faithful did their best to keep the heavily armed descendants of actual nomads confined to their camps and palaces. It was made possible by a profound shift in class alliances. The great urban civilizations of the Middle East had always been dominated by a de facto alliance between administrators and merchants, both of whom kept the rest of the population either in debt peonage or in constant peril of falling into it. In converting to Islam, the commercial classes, so long the arch-villains in the eyes of ordinary farmers and townsfolk, effectively agreed to change sides, abandon all their most hated practices, and become instead the leaders of a society that now defined itself against the state. It was possible because, from the beginning, Islam had a positive view toward commerce. Mohammed himself had begun his adult life as a merchant, and no Islamic thinker ever treated the honest pursuit of profit as itself intrinsically immoral or inimical to faith. Neither in practice did the prohibitions against usury—which for the most part were scrupulously enforced, even in the case of commercial loans—in any sense mitigate against the growth of commerce, or even the development of complex credit instruments.69 To the contrary, the early centuries of the Caliphate saw an immediate efflorescence in both.
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935701When it came to finance, instead of interest-bearing investments, the preferred approach was partnerships, where (often) one party would supply the capital, the other carry out the enterprise. Instead of fixed return, the investor would receive a share of the profits. Even labor arrangements were often organized on a profit-sharing basis.74 In all such matters, reputation was crucial—in fact, one lively debate in early commercial law was over the question of whether reputation could (like land, labor, money, or other resources) itself be considered a form of capital. It sometimes happened that merchants would form partnerships with no capital at all, but only their good names. This was called “partnership of good reputation.” As one legal scholar explained: As for the credit partnership, it is also called the “partnership of the penniless” (sharika al-mafalis). It comes about when two people form a partnership without any capital in order to buy on credit and then sell. It is designated by this name partnership of good reputations because their capital consists of their status and good reputations; for credit is extended only to him who has a good reputation among people.