Some long overdue notes on David Graeber’s fantastic book Debt: The First 5000 Years. (When all is sed and done, humans are irreplaceable.)

Selflessness

  • Communism: “From each according to their abilities, to each according to their needs”
    • In-group communism: Any in-group has a form of communism.
    • Things shared vs things owned.
    • Incomparable gifts: the soldiers fight, the priests pray, the peasants feed…
  • Communalistic relations discourage people becoming exceptional and standing above the rest.
  • Helping each other should be self-evident.
    • No thanks. No keeping tabs.
    • Taking offence from being thanked — as it implies one could have acted otherwise.
    • If it was a choice, the beneficiary would be obliged — the start of debt.
    • Giving a gift in return for an act of help sets up a relationship of indebtedness, frames the initial action as non-selfless, non-communalist.
  • Selfless sharing as evident. Gifts are a contest of generosity; true selfless sharing is something different (a given; something you shouldn’t have to give a thought about). Hospitality.
  • Designed interdependence for peacekeeping (EU): one side burying the dead of the other (Iroquois). No accounts kept.
  • The State exists to counteract the drawbacks of not living in a community.
    • The State is there to enforce civil exchange between citizens. Police, lawyers, prison exist to discourage stealing from strangers, with whom we have no relation.

Exchange & credit

  • Exchanges pre-suppose & imply equality. One cannot engage in trade or exchanges in a hierarchical relationship (with somebody below or above one’s league).
    • Special gifts vs gifts from character. Give once and reciprocity is likely. Give repeatedly and this is seen as part of your character, and reciprocity is less likely. Being seen as equal is the basis for reciprocity.
    • Hierarchical relationships work with customs. In hierarchical relationships, precedents form the basis of reference for fairness or what is to be expected. Especially in hierarchical relationships, any action can set a precedent and be dangerous because of it.
  • “Spheres of exchanges”: categories of objects deemed of comparable value, that can be traded with each other (e.g. pig & shoes; cloths & spears…)
  • Exchange is for ephemeral encounters; credit is for sustained relations.
    • Exchange (barter) was used for strangers & enemies; for singular meetings — not with peers. (× ONS)
      • Coins (rather than credit) were much used in war e.g. with itinerant soldiers or mercenaries (bad credit risk) because the transaction was instant.
    • Exchange (barter) is impersonal, like debt — doesn’t care about the other party’s specific needs, desires or capabilities (unlike Never Split the Difference: going from a barter dynamic to a personal negotiation dynamic)
    • Credit (e.g. gift economies) imply a relationship over time. Credit creates society.
    • Credit: Temporality solves the problem of the double coincidence of wants — they will coincide over time. Temporality makes the double coincidence of wants less of an issue; there is bound to be an occasion in the future to pay things back — when the need arises.
      • Community IOUs don’t need money. “As with so many actual small communities, everyone simply keeps track of who owes what to whom.”
  • Gift economies: always return a bit more or a bit less so as to always have debt and sustain the relation. (Paying one’s round.) Returning the exact equivalent means one is “free to go”, doesn’t want anything to do with the person anymore. Calling it quits means ending the relationship.
    • Not quite communism – the links have to be constantly created and maintained.
  • Three big paradigms: communism (selfless sharing/giving/taking), exchange / barter (exact), credit / gift economy (never settled)
  • Having a different currency for commerce and for social relations
    • Local tokens: shops much used by a community can issue tokens, transferrable between people, redeemable at the shop. (× Amazon vouchers, loyalty punch cards, etc.)
    • (or: gestures of appreciation, gifts, non-material things)
    • (× coins used mostly in big cities and war zones; credit systems elsewhere)

Lending & debt

  • Lending comes with a risk (that has to be borne by the lender).
  • Debts do not absolutely have to be repaid – or if they were, lenders could lend blindly.
  • Debt is premised on an assumption of equality (like exchanges) — i.e. not with slaves (or kings).
  • Debt is an obligation — quantified (thus impersonal and transferrable), and enforced by violence.
    • “A debt is just the perversion of a promise. It is a promise corrupted by both math and violence.”
    • Debt removes the human from the equation. By abstracting debt, we stop thinking about what the other party wants, needs, is capable of providing (as we would in owing respect, a favour or gratitude). Debt makes favours impersonal and unnegotiable (≠ Never Split the Difference: black swans, lopsided perks).
    • “Debt” justifies the use of violence – demonizes the victim. “A contract requires a certain reliable access to superior force.”
    • Born in debt / Tied in debt: Debt ties you up to the past, to actions of ancestors, of an obsolete self.
  • Debt as paradigm. “Debt-is-everything” (false) paradigm. By asking “Who owes what to whom?”, you are already imposing a paradigm. (× Money) Language frames.
    • Morals and religion are permeated with the language of debt (“guilt”, “sin”, “freedom”, “redemption”, “forgiveness”).
    • Primeval debt turns to guilt, self-loathing and self-torture (Christianity)
    • “Owing to the state” is a common trope in totalitarian regimes.
  • “Human economies”: debt as symbolic tokens of a greater (unpayable) debt
    • e.g. blood money (money from a murderer’s kin to the deceased’s family): a symbolic acknowledgement of debts that cannot be paid; honoring but not replacing the uniqueness and invaluableness of humans.
    • ≠ Barter paradigm (debt is inexistent); ≠ debt-is-everything paradigm (every relation is debt; “owing one’s life”, religion).
  • Tally stick: stock (how much is owed – at the creditors’s) and stub (how much one owes – at the debtor’s) (× Money).
  • Giving a cheque is giving an IOU (backed by the bank) (e.g. in France).

Money

  • Money is an abstract measure of debt.
    • With the advent of money, debt could be created and passed around indefinitely.
  • The need for an immediate payback (barter) makes money (more) necessary; encourages its development.
  • Money was based first on debt to the king (feeding the armies), then on debt from the king (Bank of England).
    • Bank of England: bankers loaned 1.2m£ to the king (now effectively owing them that sum). The bankers split this IOU into smaller (transferrable) IOUs. Bankers were profiting by charging interest to the people who borrowed the banknotes.
    • Money requires circulating IOUs.
  • Paper money originally as promissory notes redeemable in coins (from deposit banks).
  • Modern money is based on government debt.
    • The national debt is often born of war, and owed only to people who have a piece of it.
  • Money relies on the royal or government loan not (ever) being paid back.
  • Like the Bank of England, the Federal Reserve “loans” money to the US government by purchasing treasury bonds, and then monetizes the US debt by lending the money owed by the government to other banks.
  • American debt double standards: The American imperial power is based on a debt that will (and can) never be repaid — though it expects other countries to behave the opposite way and to be diligent about their debts.
  • The sovereign is a gratuitous issuer of collected IOUs (generates infinite money).
  • “Crying up” or “crying down”: declaring that the currency is worth more (to raise taxes) or less (to diminish king debt)
    • Taxation (creating reserves) as “margin of safety” (× Clear Thinking) — but also as interest (on the country)
  • “A gold coin is a promise to pay something else of equivalent value to a gold coin.”

Usury

  • “Lending money at interest is immoral” (Ancient Greeks) (“money used to make more money”) (× Money, “the wealthy shouldn’t have to use money”)
  • “Debt is morally hazardous both to the lender and the debtor.”
  • Usury is seen badly, as the lender gets rich without doing anything — unlike the merchant’s profit, made from his labour travelling.
    • Counter-argument: one should be able to charge “interesse” (after a minimal period) as a “penalty”; as counterbalance, had the lender had the money, for the extra money he would have made by investing it.
  • Luther was against Church indulgences & usury; whereas later on Calvin was accepting of usury.
  • Worker’s interest: workers used to be allowed to take with them some of their work or scraps home, when their employer couldn’t pay them in a timely manner (as “interest” on what the employer owes them).
  • Mafia: Create chaos, then offer in-group privileges, protection amongst the chaos. Make the entry conditions profitable for you.

Property-ownership-freedom

  • Ownership (property) is not a relationship between a person and a thing; but an arrangement between people concerning a thing. Ownership of a tree on an island would be nonsensical if you are alone.
  • Roman trinity of property rights: usus, fructus, abusus.
  • “Freedom is a property, that you can rent (wage labour) or sell (slavery)” (Romans)
  • Surety to make up for lack of trust in loans (debt peonage in the merchants of the Atlantic Slave Trade — their labour as “interest”)

Salevery

  • To make something saleable, one needs to first rip it from its context.
    • To make a human being an object of exchange, one has to rip them from their context.
      • With violence, one tears them from their “context” and makes them subject to exchange.
        • Without your context, situation, you do not have freedom. Deprived of your context, you are deprived of possibilities to act. (Sartre).
      • Slaves were ripped from their context; stolen from the community that made them what they are — made impersonal, with no regard to their history, abilities, needs. (× “10 bodies”, “the blood of people conveniently far away”) Slaves were de facto dead. “Being socially dead.”
    • e.g. molten amulets (to be reduced to precious metals) — annihilated compendia of history.
  • To be captured means to be dead (Roman law). “If a Roman soldier was captured and lost his liberty, his family was expected to read his will and dispose of his possessions. Should he later regain his freedom, he would have to start over, even to the point of remarrying the woman who was now considered his widow.”
  • “Slavery is hierarchical, not moral. It could happen to anyone, and a slave could be more intelligent than his master.” (Romans)

O honor, honor, honor!

  • Honor is society-dependent. Leaving a society doesn’t bring back your honor.
  • Honor price: e.g. paying back another’s honor after a slight.
    • Honor is a zero-sum game — we restitute one’s honor by dishonoring another.
    • Men were responsible for their family and protecting them. Honor as command over one’s household (not letting one’s family members have to be sold, etc.) (× debt trustworthiness; creditworthiness)
  • Social currencies often use objects and commodities that bring honor (e.g. adornments to oneself; knights).
  • “Brideprice” (≠ dowry): gifts to the bride in exchange for her offspring (for calling it one’s own)
    • thin population, progeny at a premium ⇒ brideprice (to the bride)
    • large population, land at a premium => dowry (from the bride)

Debt x War

  • Debt in war is opportunistic – takes the side of the winner. (Iraq still paying Kuwait for Sadam Hussein’s invasion in 1990 vs Third-World debt where the invaded countries are still paying their colonizer).
  • Creating an economy.
    • System for feeding soldiers within the kingdom: offer each soldier a coin, demand that every family be obliged to give a coin back to the king.
      • “I declare that you owe me something and that you can only pay it back by proving that you provided a service to these specific people.”
      • “I declare that you owe me something” = tax.
    • Gallieni / Madagascar: Print money in new currency, impose head tax that has to be paid with this currency, and e.g. having to provide services to the government to acquire it. “As a way to create a market”
      • 1) “You owe the state tax in the state’s currency.” 2) “You need to sell your goods into the system in order to get that currency.”
    • Roman Empire: mining coins and imposing it as currency in conquered cities
  • States tend to create markets as a means to regulate, control, manage the population (e.g. feeding soldiers)
  • The U.S. as primarily an air power: “The essence of U.S. military predominance in the world is, ultimately, the fact that it can, at will, with only a few hours’ notice, drop bombs at absolutely any point on the surface of the planet.”
  • U.S.: “One must go into debt to achieve a life that goes in any way beyond sheer survival”

Bits and bats

  • Ancestral public-key cryptography (PKC): the emperor would break a tally, send his official to a province with half of it; later send messages via a messenger with the other half of the tally to prove his authenticity.
  • Outlaw by offering a more attractive alternative. Counter something by providing a better alternative, rather than trying to suppress it.
  • “At each booth she adopted the same procedure: she simply walked up and asked for the price. The man would quote her one. “All right”, she then asked, “and what’s your real final price?” He’d tell her, and she’d hand over the money. “Wait”, I asked, “You can do that?”, -“Sure”, she said. “Why not?” I explained what had happened with my last friend [(haggling for hours.)] “Oh, yeah,” she said. “Some people enjoy that sort of thing.”
    • As a metaphor for cutting to the chase — rels, ONS, etc. ; directness.