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Debt: The First 5000 Years

DEBT

THE FIRST 5 ,000 YERRS

DRUID GRREBER

fl BRILLIANT, DEEPLY ORIGINAL POLITICAL THINKER."

REBECCA SOLNIT, AUTHOR R PRRRDISE BUILT IN HELL

THANK YOU ! COME AGAIN !

MELUILLE HOUSE PUBLISHING

DEBT

DEBT

THE FIRST 5,000 YEARS

DAVID GRAEBER

A MELVILLEHOUSE

BROOKLYN, NEW YORK

© 2011 David Graeber

First Melville House Printing: May 2011

Melville House Publishing 145 Plymouth Street Brooklyn, New York 11201 mhpbooks.com

ISBN: 978-1-933633-86-2

Printed in the United States of America

123456789 10

Library of Congress Cataloging-in-Publication Data

Graeber, David.

Debt : the first 5,000 years / David Graeber. p. cm.

Includes bibliographical references and index.

ISBN 978-1-933633-86-2 (alk. paper)

1. Debt-History. 2. Money-History. 3. Financial crises-History. I. Title.

HG3701.G73 2010 332— dc22

2010044508

CONTENTS

1 On The Experience of

Moral Confusion 1

2 The Myth of Barter 21

3 Primordial Debts 43

4 Cruelty and Redemption 73

5 A Brief Treatise on the Moral

Grounds of Economic Relations 89

6 Games with Sex and Death 127

7 Honor and Degradation, or,

On the Foundations of

Contemporary Civilization 165

8 Credit Versus Bullion,

And the Cycles of History 211

9 The Axial Age (800 BC-600 AD) 223

10 The Middle Ages (600 AD-1450 AD) 251

11 Age of the Great Capitalist

Empires (1450-1971) 307

12 (1971— The Beginning of Something

Yet to Be Determined) 361

Notes 393

Bibliography 455

Index 493

Chapter One

ON THE EXPERIENCE OF MORAL CONFUSION

debt

• noun i a sum of money owed. 2 the ■state of owing money. 3 a feeling of gratitude for a favour or service.

— Oxford English Dictionary

If you owe the bank a hundred thou¬ sand dollars, the bank owns you. If you owe the bank a hundred million dollars, you own the bank.

— American Proverb

TWO YEARS AGO, by a series of strange coincidences, I found myself attending a garden party at Westminster Abbey. I was a bit uncom¬ fortable. It’s not that other guests weren’t pleasant and amicable, and Father Graeme, who had organized the party, was nothing if not a gra¬ cious and charming host. But I felt more than a little out of place. At one point, Father Graeme intervened, saying that there was someone by a nearby fountain whom I would certainly want to meet. She turned out to be a trim, well-appointed young woman who, he explained, was an attorney — “but more of the activist kind. She works for a founda¬ tion that provides legal support for anti-poverty groups in London. You’ll probably have a lot to talk about.”

We chatted. She told me about her job. I told her I had been involved for many years with the global justice movement — “anti¬ globalization movement,” as it was usually called in the media. She was curious: she’d of course read a lot about Seattle, Genoa, the tear gas and street battles, but . . . well, had we really accomplished any¬ thing by all of that?

“Actually,” I said, “I think it’s kind of amazing how much we did manage to accomplish in those first couple of years.”

2

DEBT

“For example?”

“Well, for example, we managed to almost completely destroy the IMF.”

As 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 coun¬ tries 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.

“But what was your position?” the lawyer asked.

“About the IMF? We wanted to abolish it.”

“No, I mean, about the Third World debt.”

“Oh, we wanted to abolish that too. The immediate demand was to stop the IMF from imposing structural adjustment policies, which were doing all the direct damage, but we managed to accomplish that surprisingly quickly. The more long-term aim was debt amnesty. Some¬ thing along the lines of the biblical Jubilee. As far as we were con¬ cerned,” I told her, “thirty years of money flowing from the poorest countries to the richest was quite enough.”

“But,” she objected, as if this were self-evident, “they’d borrowed the money! Surely one has to pay one’s debts.”

It was at this point that I realized this was going to be a very dif¬ ferent sort of conversation than I had originally anticipated.

Where 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,

ON THE EXPERIENCE OF MORAL CONFUSION

3

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 or¬ thodox 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.

Actually, the remarkable thing about the statement “one has to pay one’s debts” is that even according to standard economic theory, it isn’t true. A lender is supposed to accept a certain degree of risk. If all loans, no matter how idiotic, were still retrievable — if there were no bankruptcy laws, for instance — the results would be disastrous. What reason would lenders have not to make a stupid loan?

“Well, I know that sounds like common sense,” I said, “but the funny thing is, economically, that’s not how loans are actually sup¬ posed to work. Financial institutions are supposed to be ways of direct¬ ing resources toward profitable investments. If a bank were guaranteed to get its money back, plus interest, no matter what it did, the whole system wouldn’t work. Say I were to walk into the nearest branch of the Royal Bank of Scotland and say ‘You know, I just got a really great tip on the horses. Think you could lend me a couple million quid?’ Obviously they’d just laugh at me. But that’s just because they know if my horse didn’t come in, there’d be no way for them to get the money back. But, imagine there was some law that said they were guaranteed to get their money back no matter what happens, even if that meant, I don’t know, selling my daughter into slavery or harvesting my organs or something. Well, in that case, why not? Why bother waiting for someone to walk in who has a viable plan to set up a laundromat or some such? Basically, that’s the situation the IMF created on a global level — which is how you could have all those banks willing to fork over billions of dollars to a bunch of obvious crooks in the first place.”

I didn’t get quite that far, because at about that point a drunken financier appeared, having noticed that we were talking about money, and began telling funny stories about moral hazard — which somehow,

4

DEBT

before too long, had morphed into a long and not particularly engross¬ ing account of one of his sexual conquests. I drifted off.

Still, for 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 responsibili¬ ties than reneging on a promise, or refusing to pay a debt?

It was that very apparent self-evidence, 1 realized, that made the statement so insidious. This was the kind of line that could make ter¬ rible things appear utterly bland and unremarkable. This may sound strong, but it’s hard not to feel strongly about such matters once you’ve witnessed the effects. I had. For almost two years, I had lived in the highlands of Madagascar. Shortly before I arrived, there had been an outbreak of malaria. It was a particularly virulent outbreak because malaria had been wiped out in highland Madagascar many years be¬ fore, so that, after a couple of generations, most people had lost their immunity. The problem was, it took money to maintain the mosquito eradication program, since there had to be periodic tests to make sure mosquitoes weren’t starting to breed again and spraying campaigns if it was discovered that they were. Not a lot of money. But owing to IMF- imposed austerity programs, the government had to cut the monitoring program. Ten thousand people died. I met young mothers grieving for lost children. One might think it would be hard to make a case that the loss of ten thousand human lives is really justified in order to ensure that Citibank wouldn’t have to cut its losses on one irresponsible loan that wasn’t particularly important to its balance sheet anyway. But here was a perfectly decent woman — one who worked for a charitable organization, no less — who took it as self-evident that it was. After all, they owed the money, and surely one has to pay one’s debts.

For the next few weeks, that phrase kept coming back at me. Why debt? What makes the concept so strangely powerful? Consumer debt is the lifeblood of our economy. All modern nation-states are built on deficit spending. Debt has come to be the central issue of international

ON THE EXPERIENCE OF MORAL CONFUSION

5

politics. But nobody seems to know exactly what it is, or how to think about it.

The 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.

Nowadays, for example, military aggression is defined as a crime against humanity, and international courts, when they are brought to bear, usually demand that aggressors pay compensation. Germa¬ ny had to pay massive reparations after World War I, and Iraq is still paying Kuwait for Saddam Hussein’s invasion in 1990. Yet the Third World debt, the debt of countries like Madagascar, Bolivia, and the Philippines, seems to work precisely the other way around. Third World debtor nations are almost exclusively countries that have at one time been attacked and conquered by European countries — often, the very countries to whom they now owe money. In 1895, for example, France invaded Madagascar, disbanded the government of then-Queen Ranavalona III, and declared the country a French colony. One of the first things General Gallieni did after “pacification,” as they liked to call it then, was to impose heavy taxes on the Malagasy population, in part so they could reimburse the costs of having been invaded, but also, since French colonies were supposed to be fiscally self-supporting, to defray the costs of building the railroads, highways, bridges, planta¬ tions, and so forth that the French regime wished to build. Malagasy taxpayers were never asked whether they wanted these railroads, high¬ ways, bridges, and plantations, or allowed much input into where and how they were built.1 To the contrary: over the next half century, the French army and police slaughtered quite a number of Malagasy who objected too strongly to the arrangement (upwards of half a million, by some reports, during one revolt in 1947). It’s not as if Madagascar has ever done any comparable damage to France. Despite this, from the be¬ ginning, the Malagasy people were told they owed France money, and to this day, the Malagasy people are still held to owe France money, and the rest of the world accepts the justice of this arrangement. When the “international community” does perceive a moral issue, it’s usually

6

DEBT

when they feel the Malagasy government is being slow to pay their debts.

But debt is not just victor’s justice; it can also be a way of pun¬ ishing 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 en¬ sured that the name “Haiti” has been a synonym for debt, poverty, and human misery ever since.2

Sometimes, though, debt seems to mean the very opposite. Starting in the 1980s, the United States, which insisted on strict terms for the re¬ payment of Third World debt, itself accrued debts that easily dwarfed those of the entire Third World combined — mainly fueled by military spending. The U.S. foreign debt, though, takes the form of treasury bonds held by institutional investors in countries (Germany, Japan, South Korea, Taiwan, Thailand, the Gulf States) that are in most cases, effectively, U.S. military protectorates, most covered in U.S. bases full of arms and equipment paid for with that very deficit spending. This has changed a little now that China has gotten in on the game (China is a special case, for reasons that will be explained later), but not very much — even China finds that the fact it holds so many U.S. treasury bonds makes it to some degree beholden to U.S. interests, rather than the other way around.

So what is the status of all this money continually being funneled into the U.S. treasury? Are these loans? Or is it tribute? In the past, military powers that maintained hundreds of military bases outside their own home territory were ordinarily referred to as “empires,” and empires regularly demanded tribute from subject peoples. The U.S. government, of course, insists that it is not an empire — but one could easily make a case that the only reason it insists on treating these pay¬ ments as “loans” and not as “tribute” is precisely to deny the reality of what’s going on.

Now, it’s true that, throughout history, certain sorts of debt, and certain sorts of debtor, have always been treated differently than

ON THE EXPERIENCE OF MORAL CONFUSION

7

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 shack¬ led 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.’”

In a way you can see current world economic arrangements as a much larger version of the same thing: the U.S. in this case being the Cadillac debtor, Madagascar the pauper starving in the next cell — while the Cadillac debtors’ servants lecture him on how his problems are due to his own irresponsibility.

And there’s something more fundamental going on here, a philo¬ sophical question, even, that we might do well to contemplate. What is the difference between a gangster pulling out a gun and demand¬ ing you give him a thousand dollars of “protection money,” and that same gangster pulling out a gun and demanding you provide him with a thousand-dollar “loan”? In most ways, obviously, nothing. But in certain ways there is a difference. As in the case of the U.S. debt to Korea or Japan, were the balance of power at any point to shift, were America to lose its military supremacy, were the gangster to lose his henchmen, that “loan” might start being treated very differently. It might become a genuine liability. But the crucial element would still seem to be the gun.

There’s an old vaudeville gag that makes the same point even more elegantly — here, as improved on by Steve Wright:

I was walking down the street with a friend the other day and a guy with a gun jumps out of an alley and says “stick ’em up.”

As I pull out my wallet, I figure, “shouldn’t be a total loss.”

So I pull out some money, turn to my friend and say, “Hey,

Fred, here’s that fifty bucks I owe you.”

The robber was so offended he took out a thousand dollars of his own money, forced Fred to lend it to me at gunpoint, and then took it back again.

In the final analysis, the man with the gun doesn’t have to do anything he doesn’t want to do. But in order to be able to run even a regime based on violence effectively, one needs to establish some kind of set of rules. The rules can be completely arbitrary. In a way it doesn’t even

8

DEBT

matter what they are. Or, at least, it doesn’t matter at first. The prob¬ lem is, the moment one starts framing things in terms of debt, people will inevitably start asking who really owes what to whom.

Arguments about debt have been going on for at least five thou¬ sand years. For most of human history — at least, the history of states and empires — most human beings have been told that they are debt¬ ors.4 Historians, and particularly historians of ideas, have been oddly reluctant to consider the human consequences; especially since this situation — more than any other — has caused continual outrage and re¬ sentment. Tell people they are inferior, they are unlikely to be pleased, but this surprisingly rarely leads to armed revolt. Tell people that they are potential equals who have failed, and that therefore, even what they do have they do not deserve, that it isn’t rightly theirs, and you are much more likely to inspire rage. Certainly this is what history would seem to teach us. For thousands of years, the struggle between rich and poor has largely taken the form of conflicts between creditors and debtors — of arguments about the rights and wrongs of interest payments, debt peonage, amnesty, repossession, restitution, the seques¬ tering of sheep, the seizing of vineyards, and the selling of debtors’ chil¬ dren into slavery. By the same token, for the last five thousand years, with remarkable regularity, popular insurrections have begun the same way: with the ritual destruction of the debt records — tablets, papyri, ledgers, whatever form they might have taken in any particular time and place. (After that, rebels usually go after the records of landholding and tax assessments.) As the great classicist Moses Finley often liked to say, in the ancient world, all revolutionary movements had a single program: “Cancel the debts and redistribute the land.”5

Our tendency to overlook this is all the more peculiar when you consider how much of our contemporary moral and religious language originally emerged directly from these very conflicts. Terms like “reck¬ oning” or “redemption” are only the most obvious, since they’re taken directly from the language of ancient finance. In a larger sense, the same can be said of “guilt,” “freedom,” “forgiveness,” and even “sin.” Arguments about who really owes what to whom have played a central role in shaping our basic vocabulary of right and wrong.

The fact that so much of this language did take shape in arguments about debt has left the concept strangely incoherent. After all, to argue with the king, one has to use the king’s language, whether or not the initial premises make sense.

If one looks at the history of debt, then, what one discovers first of all is profound moral confusion. Its most obvious manifestation is that most everywhere, one finds that the majority of human beings

ON THE EXPERIENCE OF MORAL CONFUSION

9

hold simultaneously that (i) paying back money one has borrowed is a simple matter of morality, and (2) anyone in the habit of lending money is evil.

It’s true that opinions on this latter point do shift back and forth. One extreme possibility might be the situation the French anthropolo¬ gist Jean-Claude Galey encountered in a region of the eastern Himala¬ yas, 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 populat on 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 com¬ mon 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 as a prostitute working off her father’s debt. Once it was paid off, she’d return to her husband and begin her married life.6

This seems shocking, outrageous even, but Galey does not report any widespread feeling of injustice. Everyone seemed to feel that this was just the way things worked. Neither was there much concern voiced among the local Brahmins, who were the ultimate arbiters in matters of morality — though this is hardly surprising, since the most prominent moneylenders were often Brahmins themselves.

Even here, of course, it’s hard to know what people were saying behind closed doors. If a group of Maoist rebels were to suddenly seize control of the area (some do operate in this part of rural India) and round up the local usurers for trial, we might hear all sorts of views expressed.

Still, what Galey describes represents, as I say, one extreme of possibility: one in which the usurers themselves are the ultimate moral authorities. Compare this with, say, medieval France, where the moral

10

DEBT

status of moneylenders was seriously in question. The Catholic Church had always forbidden the practice of lending money at interest, but the rules often fell into desuetude, causing the Church hierarchy to authorize preaching campaigns, sending mendicant friars to travel from town to town warning usurers that unless they repented and made full restitution of all interest extracted from their victims, they would surely go to Hell.

These sermons, many of which have survived, are full of horror stories of God’s judgment on unrepentant lenders: stories of rich men struck down by madness or terrible diseases, haunted by deathbed nightmares of the snakes or demons who would soon rend or eat their flesh. In the twelfth century, when such campaigns reached their heights, more direct sanctions began to be employed. The papacy is¬ sued instructions to local parishes that all known usurers were to be excommunicated; they were not to be allowed to receive the sacra¬ ments, and under no conditions could their bodies be buried on hal¬ lowed ground. One French cardinal, Jacques de Vitry, writing around 1210, recorded the story of a particularly influential moneylender whose friends tried to pressure their parish priest to overlook the rules and allow him to be buried in the local churchyard:

Since the dead usurer’s friends were very insistent, the priest yielded to their pressure and said, “Let us put his body on a donkey and see God’s will, and what He will do with the body. Wherever the donkey takes it, be it a church, a cemetery, or elsewhere, there will I bury it.” The body was placed upon the donkey which without deviating either to right or left, took it straight out of town to the place where thieves are hanged from the gibbet, and with a hearty buck, sent the cadaver flying into the dung beneath the gallows.7

Looking over world literature, it is almost impossible to find a single sympathetic representation of a moneylender — or anyway, a profes¬ sional moneylender, which means by definition one who charges inter¬ est. 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, “usu¬ rer,” 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

ON THE EXPERIENCE OF MORAL CONFUSION

11

time until he can repossess the soul of a villain who, by his very oc¬ cupation, has clearly made a compact with Hell.

Historically, there have been only two effective ways for a lender to try to wriggle out of the opprobrium: either shunt off responsibility onto some third party, or insist that the borrower is even worse. In me¬ dieval Europe, for instance, lords often took the first approach, employ¬ ing Jews as surrogates. Many would even speak of “our” Jews — that is, Jews under their personal protection — though in practice this usually meant that they would first deny Jews in their territories any means of making a living except by usury (guaranteeing that they would, be widely detested), then periodically turn on them, claiming they were detestable creatures, and take the money for themselves. The second approach is of course more common. But it usually leads to the conclu¬ sion that both parties to a loan are equally guilty; the whole affair is a shabby business; and most likely, both are damned.

Other religious traditions have different perspectives. In medieval Hindu law codes, not only were interest-bearing loans permissible (the main stipulation was that interest should never exceed principal), but it was often emphasized that a debtor who did not pay would be reborn as a slave in the household of his creditor — or in later codes, reborn as his horse or ox. The same tolerant attitude toward lenders, and warnings of karmic revenge against borrowers, reappear in many strands of Buddhism. Even so, the moment that usurers were thought to go too far, exactly the same sort of stories as found in Europe would start appearing. A Medieval Japanese author recounts one — he insists it’s a true story — about the terrifying fate of Hiromushime, the wife of a wealthy district governor around 776 ad. An exceptionally greedy woman,

she would add water to the rice wine she sold and make a huge profit on such diluted sake. On the day she loaned some¬ thing to someone she would use a small measuring cup, but on the day of collection she used a large one. When lending rice her scale registered small portions, but when she received payment it was in large amounts. The interest that she forcibly collected was tremendous — often as much as ten or even one hundred times the amount of the original loan. She was rigid about collecting debts, showing no mercy whatsoever. Because of this, many people were thrown into a state of anxiety; they abandoned their households to get away from her and took to wandering in other provinces.8

12

DEBT

After she died, for seven days, monks prayed over her sealed coffin. On the seventh, her body mysteriously sprang to life:

Those who came to look at her encountered an indescribable stench. From the waist up she had already become an ox with four-inch horns protruding from her forehead. Her two hands had become the hooves of an ox, her nails were now cracked so that they resembled an ox hoof’s instep. From the waist down, however, her body was that of a human. She disliked rice and preferred to eat grass. Her manner of eating was rumination. Naked, she would lie in her own excrement.9

Gawkers descended. Guilty and ashamed, the family made desperate attempts to buy forgiveness, canceling all debts owed to them by any¬ body, donating much of their wealth to religious establishments. Fi¬ nally, mercifully, the monster died.

The author, himself a monk, felt that the story represented a clear case of premature reincarnation — the woman was being punished by the law of karma for her violations of “what is both reasonable and right.” His problem was that Buddhist scriptures, insofar as they ex¬ plicitly weighed in on the matter, didn’t provide a precedent. Normally, it was debtors who were supposed to be reborn as oxen, not creditors. As a result, when it came time to explain the moral of the story, his exposition grew decidedly confusing:

It is as one sutra says: “When we do not repay the things that we have borrowed, our payment becomes that of being reborn as a horse or ox.” “The debtor is like a slave, the creditor is like a master.” Or again: “a debtor is a pheasant and his credi¬ tor a hawk.” If you are in a situation of having granted a loan, do not put unreasonable pressure on your debtor for repay¬ ment. If you do, you will be reborn as a horse or an ox and be put to work for him who was in debt to you, and then you will repay many times over.10

So which will it be? They can’t both end up as animals in each other’s barns.

All the great religious traditions seem to bang up against this quan¬ dary in one form or another. On the one hand, insofar as all human re¬ lations involve debt, they are all morally compromised. Both parties are probably already guilty of something just by entering into the relation¬ ship; at the very least they run a significant danger of becoming guilty

ON THE EXPERIENCE OF MORAL CONFUSION

13

if repayment is delayed. On the other hand, when we say someone acts like they “don’t owe anything to anybody,” we’re hardly describing the person as a paragon of virtue. In the secular world, morality consists largely of fulfilling our obligations to others, and we have a stubborn tendency to imagine those obligations as debts. Monks, perhaps, can avoid the dilemma by detaching themselves from the secular world entirely, but the rest of us appear condemned to live in a universe that doesn’t make a lot of sense.

The story of Hiromushime is a perfect illustration of the impulse to throw the accusation back at the accuser — just as in the story about the dead usurer and the donkey, the emphasis on excrement, animals, and humiliation is clearly meant as poetic justice, the creditor forced to experience the same feelings of disgrace and degradation that debtors are always made to feel. It’s all a more vivid, more visceral way of ask¬ ing that same question: “Who really owes what to whom?”

It’s also a perfect illustration of how the moment one asks the question “Who really owes what to whom?,” one has begun to adopt the creditor’s language. Just as if we don’t pay our debts, “our payment becomes that of being reborn as a horse or an ox”; so if you are an unreasonable creditor, you too will “repay.” Even karmic justice can thus be reduced to the language of a business deal.

Here we come to the central question of this book: What, precisely, does it mean to say that our sense of morality and justice is reduced to the language of a business deal? What does it mean when we reduce moral obligations to debts? What changes when the one turns into the other? And how do we speak about them when our language has been so shaped by the market? On one level the difference between an obligation and a debt is simple and obvious. A debt is the obligation to pay a certain sum of money. As a result, a debt, unlike any other form of obligation, can be precisely quantified. This allows debts to become simple, cold, and impersonal — which, in turn, allows them to be transferable. If one owes a favor, or one’s life, to another human being — it is owed to that person specifically. But if one owes forty thousand dollars at 12-percent interest, it doesn’t really matter who the creditor is; neither does either of the two parties have to think much about what the other party needs, wants, is capable of doing — as they certainly would if what was owed was a favor, or respect, or gratitude. One does not need to calculate the human effects; one need only cal¬ culate principal, balances, penalties, and rates of interest. If you end

14

DEBT

up having to abandon your home and wander in other provinces, if your daughter ends up in a mining camp working as a prostitute, well, that’s unfortunate, but incidental to the creditor. Money is money, and a deal’s a deal.

From this perspective, the crucial factor, and a topic that will be explored at length in these pages, is money’s capacity to turn moral¬ ity 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 obliga¬ tion is not the presence or absence of men with weapons who can en¬ force 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 would they have collected debts that were technically illegal? Hiromushime was utterly uncompromis¬ ing 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 essen¬ tial 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.

There are obvious reasons why this is a particularly important moment to reexamine the history of debt. September 2008 saw the beginning of

ON THE EXPERIENCE OF MORAL CONFUSION

15

a financial crisis that almost brought the entire world economy screech¬ ing to a halt. In many ways the world economy did: ships stopped moving across the oceans, and thousands were placed in dry dock. Building cranes were dismantled, as no more buildings were being put up. Banks largely ceased making loans. In the wake of this, there was not only public rage and bewilderment, but the beginning of an actual public conversation about the nature of debt, of money, of the financial institutions that have come to hold the fate of nations in their grip.

But that was just a moment. The conversation never ended up tak¬ ing place.

The reason that people were ready for such a conversation was that the story everyone had been told for the last decade or so had just been revealed to be a colossal lie. There’s really no nicer way to say it. For years, everyone had been hearing of a whole host of new, ultra- sophisticated financial innovations: credit and commodity derivatives, collateralized mortgage obligation derivatives, hybrid securities, debt swaps, and so on. These new derivative markets were so incredibly sophisticated, that — according to one persistent story — a prominent in¬ vestment house had to employ astrophysicists to run trading programs so complex that even the financiers couldn’t begin to understand them. The message was transparent: leave these things to the professionals. You couldn’t possibly get your minds around this. Even if you don’t like financial capitalists very much (and few seemed inclined to argue that there was much to like about them), they were nothing if not capa¬ ble, in fact so preternaturally capable, that democratic oversight of fi¬ nancial markets was simply inconceivable. (Even a lot of academics fell for it. I well remember going to conferences in 2006 and 2007 where trendy social theorists presented papers arguing that these new forms of securitization, linked to new information technologies, heralded a looming transformation in the very nature of time, possibility — reality itself. I remember thinking: “Suckers!” And so they were.)

Then, when the rubble had stopped bouncing, it turned out that many if not most of them had been nothing more than very elaborate scams. They consisted of operations like selling poor families mort¬ gages crafted in such a way as to make eventual default inevitable; taking bets on how long it would take the holders to default; packag¬ ing mortgage and bet together and selling them to institutional inves¬ tors (representing, perhaps, the mortgage-holders’ retirement accounts) claiming that it would make money no matter what happened, and al¬ low said investors to pass such packages around as if they were money; turning over responsibility for paying off the bet to a giant insurance conglomerate that, were it to sink beneath the weight of its resultant

16

DEBT

debt (which certainly would happen), would then have to be bailed out by taxpayers (as such conglomerates were indeed bailed out).11 In other words, it looks very much like an unusually elaborate version of what banks were doing when they lent money to dictators in Bolivia and Gabon in the late ’70s: make utterly irresponsible loans with the full knowledge that, once it became known they had done so, politicians and bureaucrats would scramble to ensure that they’d still be reim¬ bursed anyway, no matter how many human lives had to be devastated and destroyed in order to do it.

The difference, though, was that this time, the bankers were doing it on an inconceivable scale: the total amount of debt they had run up was larger than the combined Gross Domestic Products of every coun¬ try in the world — and it threw the world into a tailspin and almost destroyed the system itself.

Armies and police geared up to combat the expected riots and unrest, but none materialized. But neither have any significant changes in how the system is run. At the time, everyone assumed that, with the very defining institutions of capitalism (Lehman Brothers, Citibank, General Motors) crumbling, and all claims to superior wisdom revealed to be false, we would at least restart a broader conversation about the nature of debt and credit institutions. And not just a convwersation.

It seemed that most Americans were open to radical solutions. Surveys showed that an overwhelming majority of Americans felt that the banks should not be rescued, whatever the economic consequences, but that ordinary citizens stuck with bad mortgages should be bailed out. In the United States this is quite extraordinary. Since colonial days, Americans have been the population least sympathetic to debtors. In a way this is odd, since America was settled largely by absconding debt¬ ors, but it’s a country where the idea that morality is a matter of pay¬ ing one’s debts runs deeper than almost any other. In colonial days, an insolvent debtor’s ear was often nailed to a post. The United States was one of the last countries in the world to adopt a law of bankruptcy: de¬ spite the fact that in 178 7, the Constitution specifically charged the new government with creating one, all attempts were rejected on “moral grounds” until 1898. 12 The change was epochal. For this very reason, perhaps, those in charge of moderating debate in the media and legisla¬ tures decided that this was not the time. The United States government effectively put a three-trillion-dollar Band-Aid over the problem and changed nothing. The bankers were rescued; small-scale debtors — with a paltry few exceptions — were not.13 To the contrary, in the middle of the greatest economic recession since the ’30s, we are already begin¬ ning to see a backlash against them — driven by financial corporations

ON THE EXPERIENCE OF MORAL CONFUSION

17

who have now turned to the same government that bailed them out to apply the full force of the law against ordinary citizens in financial trouble. “It’s not a crime to owe money,” reports the Minneapolis-St. Paul StarTribune, “But people are routinely being thrown in jail for failing to pay debts.” In Minnesota, “the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009 ... In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January [2010], a judge sentenced a Kenney, Ill., man ‘to indefinite incarceration’ until he came up with $300 toward a lumber yard debt.”14

In other words, we are moving toward a restoration of some¬ thing much like debtors’ prisons. Meanwhile, the conversation stopped dead, popular rage against bailouts sputtered into incoherence, and we seem to be tumbling inexorably toward the next great financial catastrophe — the only real question being just how long it will take.

We have reached the point at which the IMF itself, now trying to reposition itself as the conscience of global capitalism, has begun to issue warnings that if we continue on the present course, no bailout is likely to be forthcoming the next time. The public simply will not stand for it, and as a result, everything really will come apart. “IMF Warns Second Bailout Would ‘Threaten Democracy’” reads one recent headline.1' (Of course by “democracy” they mean “capitalism.”) Surely it means something that even those who feel they are responsible for keeping the current global economic system running, who just a few years ago acted as if they could simply assume the current system would be around forever, are now seeing apocalypse everywhere.

In this case, the IMF has a point. We have every reason to believe that we do indeed stand on the brink of epochal changes.

Admittedly, 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 dema¬ terialization 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 under¬ stand their dazzling new financial instruments. The moment one casts matters on a broad historical scale, though, the first thing one learns

18

DEBT

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 abstrac¬ tion, 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.

But history does provide fascinating hints of what we might expect. For instance: in the past, ages of virtual credit money almost invari¬ ably involve the creation of institutions designed to prevent everything going haywire — to stop the lenders from teaming up with bureaucrats and politicians to squeeze everybody dry, as they seem to be doing now. They are accompanied by the creation of institutions designed to protect debtors. The new age of credit money we are in seems to have started precisely backwards. It began with the creation of global insti¬ tutions like the IMF designed to protect not debtors, but creditors. At the same time, on the kind of historical scale we’re talking about here, a decade or two is nothing. We have very little idea what to expect.'

This book is a history of debt, then, but it also uses that history as a way to ask fundamental questions about what human beings and human society are or could be like — what we actually do owe each other, what it even means to ask that question. As a result, the book begins by attempting to puncture a series of myths — not only the Myth of Barter, which is taken up in the first chapter, but also rival myths about primordial debts to the gods, or to the state — that in one way or another form the basis of our common-sense assumptions about the na¬ ture of economy and society. In that common-sense view, the State and the Market tower above all else as diametrically opposed principles. Historical reality reveals, however, that they were born together and have always been intertwined. The one thing that all these misconcep¬ tions have in common, we will find, is that they tend to reduce all hu¬ man relations to exchange, as if our ties to society, even to the cosmos itself, can be imagined in the same terms as a business deal. This leads to another question: If not exchange, then what? In chapter five, I will begin to answer the question by drawing on the fruits of anthropol¬ ogy to describe a view of the moral basis of economic life; then return

ON THE EXPERIENCE OF MORAL CONFUSION

19

to the question of the origins of money to demonstrate how the very principle of exchange emerged largely as an effect of violence — that the real origins of money are to be found in crime and recompense, war and slavery, honor, debt, and redemption. That, in turn, opens the way to starting, with chapter eight, an actual history of the last five thou¬ sand years of debt and credit, with its great alternations between ages of virtual and physical money. Many of the discoveries here are pro¬ foundly unexpected: from the origins of modern conceptions of rights and freedoms in ancient slave law, to the origins of investment capital in medieval Chinese Buddhism, to the fact that many of Adam Smith’s most famous arguments appear to have been cribbed from the works of free-market theorists from medieval Persia (a story which, inciden¬ tally, has interesting implications for understanding the current appeal of political Islam). All of this sets the stage for a fresh approach to the last five hundred years, dominated by capitalist empires, and allows us to at least begin asking what might really be at stake in the present day.

For a very long time, the intellectual consensus has been that we can no longer ask Great Questions. Increasingly, it’s looking like we have no other choice.

Chapter Two

THE MYTH OF BARTER

For every subtle and complicated question, there is a perfectly simple and straightforward answer, which is wrong.

— H.L. Mencken

WHAT IS THE DIFFERENCE between a mere obligation, a sense that one ought to behave in a certain way, or even that one owes something to someone, and a debt, properly speaking? The answer is simple: money. The difference between a debt and an obligation is that a debt can be precisely quantified. This requires money.

Not only is it money that makes debt possible: money and debt ap¬ pear on the scene at exactly the same time. Some of the very first writ¬ ten documents that have come down to us are Mesopotamian tablets recording credits and debits, rations issued by temples, money owed for rent of temple lands, the value of each precisely specified in grain and silver. Some of the earliest works of moral philosophy, in turn, are reflections on what it means to imagine morality as debt — that is, in terms of money.

A history of debt, then, is thus necessarily a history of money — and the easiest way to understand the role that debt has played in human society is simply to follow the forms that money has taken, and the way money has been used, across the centuries — and the arguments that inevitably ensued about what all this means. Still, this is neces¬ sarily a very different history of money than we are used to. When economists speak of the origins of money, for example, debt is always something of an afterthought. First comes barter, then money; credit only develops later. Even if one consults books on the history of money in, say, France, India, or China, what one generally gets is a history of coinage, with barely any discussion of credit arrangements at all. For almost a century, anthropologists like me have been pointing out

22

DEBT

that there is something very wrong with this picture. The 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 in debt to everyone else in a dozen different ways, and that most transactions take place without the use of currency.

Why the discrepancy?

Some of it is just the nature of the evidence: coins are preserved in the archeological record; credit arrangements usually are not. Still, the problem runs deeper. The existence of credit and debt has always been something of a scandal for economists, since it’s almost impossible to pretend that those lending and borrowing money are acting on purely “economic” motivations (for instance, that a loan to a stranger is the same as a loan to one’s cousin); it seems important, therefore, to begin the story of money in an imaginary world from which credit and debt have been entirely erased. Before we can apply the tools of anthropol¬ ogy to reconstruct the real history of money, we need to understand what’s wrong with the conventional account.

Economists generally speak of three functions of money: medium of exchange, unit of account, and store of value. All economic text¬ books treat the first as primary. Here’s a fairly typical extract from Economics, by Case, Fair, Gartner, and Heather (1996):

Money is vital to the working of a market economy. Imagine what life would be like without it. The alternative to a mon¬ etary economy is barter, people exchanging goods and services for other goods and services directly instead of exchanging via the medium of money.

How does a barter system work? Suppose you want crois¬ sants, eggs and orange juice for breakfast. Instead of going to the grocer’s and buying these things with money, you would have to find someone who has these items and is willing to trade them. You would also have to have something the baker, the orange juice purveyor and the egg vendor want. Having pencils to trade will do you no good if the baker and the or¬ ange juice and egg sellers do not want pencils.

A barter system requires a double coincidence of wants for trade to take place. That is, to effect a trade, I need not only have to find someone who has what I want, but that person must also want what I have. Where the range of traded goods is small, as it is in relatively unsophisticated economies, it is

THE MYTH OF BARTER

23

not difficult to find someone to trade with, and barter is often used.1

This latter point is questionable, but it’s phrased in so vague a way that it would be hard to disprove.

In a complex society with many goods, barter exchanges in¬ volve an intolerable amount of effort. Imagine trying to find people who offer for sale all the things you buy in a typical trip to the grocer’s, and who are willing to accept goods that you have to offer in exchange for their goods.

Some agreed-upon medium of exchange (or means of pay¬ ment) neatly eliminates the double coincidence of wants prob¬ lem.2

It’s important to emphasize that this is not presented as something that actually happened, but as a purely imaginary exercise. “To see that society benefits from a medium of exchange” write Begg, Fischer and Dornbuch ( Economics , 2005), “imagine a barter economy.” “Imag¬ ine the difficulty you would have today,” write Maunder, Myers, Wall, and Miller ( Economics Explained, 1991), “if you had to exchange your labor directly for the fruits of someone else’s labor.” “Imagine,” write Parkin and King ( Economics , 1995), “you have roosters, but you want roses.”3 One could multiply examples endlessly. Just about every eco¬ nomics textbook employed today sets out the problem the same way. Historically, they note, we know that there was a time when there was no money. What must it have been like? Well, let us imagine an economy something like today’s, except with no money. That would have been decidedly inconvenient! Surely, people must have invented money for the sake of efficiency.

The story of money for economists always begins with a fantasy world of barter. The problem is where to locate this fantasy in time and space: Are we talking about cave men, Pacific Islanders, the Ameri¬ can frontier? One textbook, by economists Joseph Stiglitz and John Driffill, takes us to what appears to be an imaginary New England or Midwestern town:

One can imagine an old-style farmer bartering with the black¬ smith, the tailor, the grocer, and the doctor in his small town.

For simple barter to work, however, there must be a double coincidence of wants . . . Henry has potatoes and wants shoes, Joshua has an extra pair of shoes and wants potatoes. Bartering

24

DEBT

can make them both happier. But if Henry has firewood and Joshua does not need any of that, then bartering for Joshua’s shoes requires one or both of them to go searching for more people in the hope of making a multilateral exchange. Money provides a way to make multilateral exchange much simpler. Henry sells his firewood to someone else for money and uses the money to buy Joshua’s shoes.4

Again this is just a make-believe land much like the present, except with money somehow plucked away. As a result it makes no sense: Who in their right mind would set up a grocery in such a place? And how would they get supplies? But let’s leave that aside. There is a simple reason why everyone who writes an economics textbook feels they have to tell us the same story. For economists, it is in a very real sense the most important story ever told. It was by telling it, in the significant year of 1776, that Adam Smith, professor of moral philoso¬ phy at the University of Glasgow, effectively brought the discipline of economics into being.

He did not make up the story entirely out of whole cloth. Already in 330 bc, Aristotle was speculating along vaguely similar lines in his treatise on politics. At first, he suggested, families must have produced everything they needed for themselves. Gradually, some would presum¬ ably have specialized, some growing corn, others making wine, swap¬ ping one for the other.5 Money, Aristotle assumed, must have emerged from such a process. But, like the medieval schoolmen who occasion¬ ally repeated the story, Aristotle was never clear as to how.6

In the years after Columbus, as Spanish and Portuguese adven¬ turers were scouring the world for new sources of gold and silver, these vague stories disappear. Certainly no one reported discovering a land of barter. Most sixteenth- and seventeenth-century travelers in the West Indies or Africa assumed that all societies would necessarily have their own forms of money, since all societies had governments and all governments issued money.7

Adam Smith, on the other hand, was determined to overturn the conventional wisdom of his day. Above all, he objected to the notion that money was a creation of government. In this, Smith was the intel¬ lectual heir of the Liberal tradition of philosophers like John Locke, who had argued that government begins in the need to protect private property and operated best when it tried to limit itself to that function. Smith expanded on the argument, insisting that property, money and markets not only existed before political institutions but were the very foundation of human society. It followed that insofar as government

THE MYTH OF BARTER

25

should play any role in monetary affairs, it should limit itself to guar¬ anteeing the soundness of the currency. It was only by making such an argument that he could insist that economics is itself a field of human inquiry with its own principles and laws — that is, as distinct from, say ethics or politics.

Smith’s argument is worth laying out in detail because it is, as I say, the great founding myth of the discipline of economics.

What, he begins, is the basis of economic life, properly speaking? It is “a certain propensity in human nature . . . the propensity to truck, barter, and exchange one thing for another.” Animals don’t do this. “Nobody,” Smith observes, “ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.”8 But humans, if left to their own devices, will inevitably begin swapping and comparing things. This is just what humans do. Even logic and conversation are really just forms of trading, and as in all things, humans will always try to seek their own best advantage, to seek the greatest profit they can from the exchange.9

It is this drive to exchange, in turn, which creates that division of labor responsible for all human achievement and civilization. Here the scene shifts to another one of those economists’ faraway fantasylands — it seems to be an amalgam of North American Indians and Central Asian pastoral nomads:10

In a tribe of hunters or shepherds a particular person makes bows and arrows, for example, with more readiness and dex¬ terity than any other. He frequently exchanges them for cattle or for venison with his companions; and he finds at last that he can in this manner get more cattle and venison, than if he himself went to the field to catch them. From a regard to his own interest, therefore, the making of bows and arrows grows to be his chief business, and he becomes a sort of armourer. Another excels in making the frames and covers of their little huts or moveable houses. He is accustomed to be of use in this way to his neighbours, who reward him in the same manner with cattle and with venison, till at last he finds it his interest to dedicate himself entirely to this employment, and to become a sort of house-carpenter. In the same manner a third becomes a smith or a brazier; a fourth a tanner or dresser of hides or skins, the principal- part of the clothing of savages . . .

It’s only once we have expert arrow-makers, wigwam-makers, and so on that people start realizing there’s a problem. Notice how, as in

26

DEBT

so many examples, we have a tendency to slip from imaginary savages to small-town shopkeepers.

• But when the division of labor first began to take place, this power of exchanging must frequently have been very much clogged and embarrassed in its operations. One man, we shall suppose, has more of a certain commodity than he himself has occasion for, while another has less. The former consequently would be glad to dispose of, and the latter to purchase, a part of this superfluity. But if this latter should chance to have noth¬ ing that the former stands in need of, no exchange can be made between them. The butcher has more meat in his shop than he himself can consume, and the brewer and the baker would each of them be willing to purchase a part of it. But they have nothing to offer in exchange . . .

In order to avoid the inconveniency of such situations, every prudent man in every period of society, after the first establish¬ ment of the division of labor, must naturally have endeavored to manage his affairs in such a manner, as to have at all times by him, besides the peculiar produce of his own industry, a certain quantity of some one commodity or other, such as he imagined that few people would be likely to refuse in exchange for the produce of their industry.11

So everyone will inevitably start stockpiling something they figure that everyone else is likely to want. This has a paradoxical effect, because at a certain point, rather than making that commodity less valuable (since everyone already has some) it becomes more valuable (because it becomes, effectively, currency):

Salt is said to be the common instrument of commerce and exchanges in Abyssinia; a species of shells in some parts of the coast of India; dried cod at Newfoundland; tobacco in Virginia; sugar in some of our West India colonies; hides or dressed leather in some other countries; and there is at this day a village in Scotland where it is not uncommon, I am told, for a workman to carry nails instead of money to the baker’s shop or the ale-house.12

THE MYTH OF BARTER

27

Eventually, of course, at least for long-distance trade, it all boils down to precious metals, since these are ideally suited to serve as cur¬ rency, being durable, portable, and able to be endlessly subdivided into identical portions.

Different metals have been made use of by different nations for this purpose. Iron was the common instrument of com¬ merce among the ancient Spartans; copper among the ancient Romans; and gold and silver among all rich and commercial nations.

Those metals seem originally to have been made use of for this purpose in rude bars, without any stamp or coinage . . .

The use of metals in this rude state was attended with two very considerable inconveniencies; first with the trouble of weigh¬ ing; and, secondly, with that of assaying them. In the precious metals, where a small difference in the quantity makes a great difference in the value, even the business of weighing, with proper exactness, requires at least very accurate weights and scales. The weighing of gold in particular is an operation of some nicety . . ,13

It’s easy to see where this is going. Using irregular metal ingots is easier than barter, but wouldn’t standardizing the units — say, stamp¬ ing pieces of metal with uniform designations guaranteeing weight and fineness, in different denominations — make things easier still? Clearly it would, and so was coinage born. True, issuing coinage meant govern¬ ments had to get involved, since they generally ran the mints; but in the standard version of the story, governments have only this one limited role — to guarantee the money supply — and tend to do it badly, since throughout history, unscrupulous kings have often cheated by debasing the coinage and causing inflation and other sorts of political havoc in what was originally a matter of simple economic common sense.

Tellingly, this story played a crucial role not only in founding the discipline of economics, but in the very idea that there was something called “the economy,” which operated by its own rules, separate from moral or political life, that economists could take as their field of study.

28

DEBT

“The economy” is where we indulge in our natural propensity to truck and barter. We are still trucking and bartering. We always will be. Money is simply the most efficient means.

Economists like Karl Menger and Stanley Jevons later improved on the details of the story, most of all by adding various mathemati¬ cal equations to demonstrate that a random assortment of people with random desires could, in theory, produce not only a single commodity to use as money but a uniform price system. In the process, they also substituted all sorts of impressive technical vocabulary (i.e., “inconve¬ niences” became “transaction costs”). The crucial thing, though, is that by now, this story has become simple common sense for most people. We teach it to children in schoolbooks and museums. Everybody knows it. “Once upon a time, there was barter. It was difficult. So people in¬ vented money. Then came the development of banking and credit.” It all forms a perfectly simple, straightforward progression, a process of increasing sophistication and abstraction that has carried humanity, logically and inexorably, from the Stone Age exchange of mastodon tusks to stock markets, hedge funds, and securitized derivatives.14

It really has become ubiquitous. Wherever we find money, we also find the story. At one point, in the town of Arivonimamo, in Madagas¬ car, I had the privilege of interviewing a Kalanoro, a tiny ghostly crea¬ ture that a local spirit medium claimed to keep hidden away in a chest in his home. The spirit belonged to the brother of a notorious local loan shark, a horrible woman named Nordine, and to be honest I was a bit reluctant to have anything to do with the family, but some of my friends insisted — since after all, this was a creature from ancient times. The creature spoke from behind a screen in an eerie, otherworldly qua¬ ver. But all it was really interested in talking about was money. Finally, slightly exasperated by the whole charade, I asked, “So, what did you use for money back in ancient times, when you were still alive?”

The mysterious voice immediately replied, “No. We didn’t use money. In ancient times we used to barter commodities directly, one for the other ...”

I I I I I

The story, then, is everywhere. It is the founding myth of our system of economic relations. It is so deeply established in common sense, even in places like Madagascar, that most people on earth couldn’t imagine any other way that money possibly could have come about.

The problem is there’s no evidence that it ever happened, and an enormous amount of evidence suggesting that it did not.

THE MYTH OF BARTER

29

For centuries now, explorers have been trying to find this fabled land of barter — none with success. Adam Smith set his story in aborigi¬ nal North America (others preferred Africa or the Pacific). In Smith’s time, at least it could be said that reliable information on Native Amer¬ ican economic systems was unavailable in Scottish libraries. But by mid-century, Lewis Henry Morgan’s descriptions of the Six Nations of the Iroquois, among others, were widely published — and they made clear that the main economic institution among the Iroquois nations were longhouses where most goods were stockpiled and then allocated by women’s councils, and no one ever traded arrowheads for slabs of meat. Economists simply ignored this information.15 Stanley Jevons, for example, who in 1871 wrote what has come to be considered the classic book on the origins of money, took his examples straight from Smith, with Indians swapping venison for elk and beaver hides, and made no use of actual descriptions of Indian life that made it clear that Smith had simply made this up. Around that same time, missionaries, adventurers, and colonial administrators were fanning out across the world, many bringing copies of Smith’s book with them, expecting to find the land of barter. None ever did. They discovered an almost end¬ less variety of economic systems. But to this day, no one has been able to locate a part of the world where the ordinary mode of economic transaction between neighbors takes the form of “I’ll give you twenty chickens for that cow.”

The definitive anthropological work on barter, by Caroline Hum¬ phrey, 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 eth¬ nography suggests that there never has been such a thing.”16

Now, all this hardly means that barter does not exist — or even that it’s never practiced by the sort of people that Smith would refer to as “savages.” It just means that it’s almost never employed, as Smith imagined, between fellow villagers. Ordinarily, it takes place between strangers, even enemies. Let us begin with the Nambikwara of Brazil. They would seem to fit all the criteria: they are a simple society with¬ out much in the way of division of labor, organized into small bands that traditionally numbered at best a hundred people each. Occasion¬ ally if one band spots the cooking fires of another in their vicinity, they will send emissaries to negotiate a meeting for purposes of trade. If the offer is accepted, they will first hide their women and children in the forest, then invite the men of other band to visit camp. Each band has a chief; once everyone has been assembled, each chief gives a formal speech praising the other party and belittling his own; everyone puts

30

DEBT

aside their weapons to sing and dance together — though the dance is one that mimics military confrontation. Then, individuals from each side approach each other to trade:

If an individual wants an object he extols it by saying how fine it is. If a man values an object and wants much in exchange for it, instead of saying that it is very valuable he says that it is no good, thus showing his desire to keep it. “This axe is no good, it is very old, it is very dull,” he will say, referring to his axe which the other wants.

This argument is carried on in an angry tone of voice un¬ til a settlement is reached. When agreement has been reached each snatches the object out of the other’s hand. If a man has bartered a necklace, instead of taking it off and handing it over, the other person must take it off with a show of force. Disputes, often leading to fights, occur when one party is a little premature and snatches the object before the other has finished arguing.17

The whole business concludes with a great feast at which the wom¬ en reappear, but this too can lead to problems, since amidst the music and good cheer, there is ample opportunity for seductions.18 This some¬ times led to jealous quarrels. Occasionally, people would get killed.

Barter, then, for all the festive elements, was carried out be¬ tween people who might otherwise be enemies and hovered about an inch away from outright warfare — and, if the ethnographer is to be believed — if one side later decided they had been taken advantage of, it could very easily lead to actual wars.

To shift our spotlight halfway around the world to Western Arn¬ hem Land in Australia, where the Gunwinggu people are famous for entertaining neighbors in rituals of ceremonial barter called the dza- malag. Here the threat of actual violence seems much more distant. Partly, this is because things are made easier by the existence of a moi¬ ety system that embraces the whole region: no one is allowed to marry, or even have sex with, people of their own moiety, no matter where they come from, but anyone from the other is technically a potential match. Therefore, for a man, even in distant communities, half the women are strictly forbidden, half of them fair game. The region is also united by local specialization: each people has its own trade product to be bartered with the others.

What follows is from a description of a dzamalag held in the 1940s, as observed by an anthropologist named Ronald Berndt.

THE MYTH OF BARTER

31

Once again, it begins as strangers, after some initial negotiations, are invited into the hosts’ main camp. The visitors in this particular example were famous for their “much-prized serrated spears” — their hosts had access to good European cloth. The trading begins when the visiting party, which consisted of both men and women, enters the camp’s dancing ground of “ring place,” and three of them began to entertain their hosts with music. Two men start singing, a third ac¬ companies them on the didjeridu. Before long, women from the hosts’ side come and attack the musicians:

Men and women rise and begin to dance. The dzamalag opens when two Gunwinggu women of the opposite moiety to the singing men “give dzamalag” to the latter. They present each man with a piece of cloth, and hit or touch him, pulling him down on the ground, calling him a dzamalag husband, and joking with him in an erotic vein. Then another woman of the opposite moiety to the pipe player gives him cloth, hits and jokes with him.

This sets in motion the dzamalag exchange. Men from the visiting group sit quietly while women of the opposite moiety come over and give them cloth, hit them, and invite them to copulate; they take any liberty they choose with the men, amid amusement and applause, while the singing and dancing con¬ tinue. Women try to undo the men’s loin coverings or touch their penises, and to drag them from the “ring place” for co¬ itus. The men go with their dzamalag partners, with a show of reluctance, to copulate in the bushes away from the fires which light up the dancers. They may give the women tobacco or beads. When the women return, they give part of this tobacco to their own husbands, who have encouraged them to go dza¬ malag. The husbands, in turn, use the tobacco to pay their own female dzamalag partners . . .’9

New singers and musicians appear, are again assaulted and dragged off to the bushes; men encourage their wives “not to be shy,” so as to maintain the Gunwinggu reputation for hospitality; eventually those men also take the initiative with the visitors’ wives, offering cloth, hit¬ ting them, and leading them off into the bushes. Beads and tobacco circulate. Finally, once participants have all paired off at least once, and the guests are satisfied with the cloth they have acquired, the women stop dancing and stand in two rows and the visitors line up to repay them.

32

DEBT

Then visiting men of one moiety dance towards the women of the opposite moiety, in order to “give them dzamalag."

They hold shovel-nosed spears poised, pretending to spear the women, but instead hit them with the flat of the blade. “We will not spear you, for we have already speared you with our penises.” They present the spears to the women. Then visiting men of the other moiety go through the same actions with the women of their opposite moiety, giving them spears with ser¬ rated points. This terminates the ceremony, which is followed by a large distribution of food.20

This is a particularly dramatic case, but dramatic cases are reveal¬ ing. What the Gunwinggu hosts appear to have been able to do here, owing to the relatively amicable relations between neighboring peoples in Western Arnhem Land, is to take all the elements in Nambikwara barter (the music and dancing, the potential hostility, the sexual in¬ trigue), and turn it all into a kind of festive game — one not, perhaps, without its dangers, but (as the ethnographer emphasizes) considered enormous fun by everyone concerned.

What 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 re¬ lations. 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 ex¬ change 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 disci¬ pline called “economics,” a discipline that concerns itself first and fore¬ most with how individuals seek the most advantageous arrangement

THE MYTH OF BARTER

33

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 peo¬ ple 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 be¬ tween 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.

From these examples, it begins to be clear why there are no societ¬ ies based on barter. Such a society could only be one in which every¬ body was an inch away from everybody else’s throat; but nonetheless hovering there, poised to strike but never actually striking, forever. True, barter does sometimes occur between people who do not consid¬ er each other strangers, but they’re usually people who might as well be strangers — that is, who feel no sense of mutual responsibility or trust, or the desire to develop ongoing relations. The Pukhtun of Northern Pakistan, for instance, are famous for their open-handed hospitality. Barter is what you do with those to whom you are not bound by ties of hospitality (or kinship, or much of anything else):

A favorite mode of exchange among men is barter, or adal- badal (give and take). Men are always on the alert for the possibility of bartering one of their possessions for something better. Often the exchange is like for like: a radio for a radio, sunglasses for sunglasses, a watch for a watch. However, un¬ like objects can also be exchanged, such as, in one instance, a bicycle for two donkeys. Adal-badal is always practiced with non-relatives and affords men a great deal of pleasure as they attempt to get the advantage over their exchange partner. A good exchange, in which a man feels he has gotten the better of the deal, is cause for bragging and pride. If the exchange is bad, the recipient tries to renege on the deal or, failing that, to

34

DEBT

palm off the faulty object on someone unsuspecting. The best partner in adal-badal is someone who is distant spatially and will therefore have little opportunity to complain.22

Neither are such unscrupulous motives limited to Central Asia. They seem inherent to the very nature of barter — which would explain the fact that in the century or two before Smith’s time, the English words “truck and barter,” like their equivalents in French, Spanish, German, Dutch, and Portuguese, literally meant “to trick, bamboozle, or rip off.”23 Swapping one thing directly for another while trying to get the best deal one can out of the transaction is, ordinarily, how one deals with people one doesn’t care about and doesn’t expect to see again. What reason is there not to try to take advantage of such a person? If, on the other hand, one cares enough about someone — a neighbor, a friend — to wish to deal with her fairly and honestly, one will inevitably also care about her enough to take her individual needs, desires, and situation into account. Even if you do swap one thing for another, you are likely to frame the matter as a gift.

To illustrate what I mean by this, let’s return to the economics text¬ books and the problem of the “double coincidence of wants.” When we left Henry, he needed a pair of shoes, but all he had lying around were some potatoes. Joshua had an extra pair of shoes, but he didn’t really need potatoes. Since money has not yet been invented, they have a problem. What are they to do?

The first thing that should be clear by now is that we’d really have to know a bit more about Joshua and Henry. Who are they? Are they related? If so, how? They appear to live in a small community. Any two people who have been living their lives in the same small community will have some sort of complicated history with each other. Are they friends, rivals, allies, lovers, enemies, or several of these things at once?

The authors of the original example seem to assume two neighbors of roughly equal status, not closely related, but on friendly terms — that is, as close to neutral equality as one can get. Even so, this doesn’t say much. For example, if Henry was living in a Seneca longhouse, and needed shoes, Joshua would not even enter into it; he’d simply men¬ tion it to his wife, who’d bring up the matter with the other matrons, fetch materials from the longhouse’s collective storehouse, and sew him some. Alternately, to find a scenario fit for an imaginary economics

THE MYTH OF BARTER

35

textbook, we might place Joshua and Henry together in a small, inti¬ mate community like a Nambikwara or Gunwinggu band.

SCENARIO 1

Henry walks up to Joshua and says “Nice shoes!”

Joshua says, “Oh, they’re not much, but since you seem to like them, by all means take them.”

Henry takes the shoes.

Henry’s potatoes are not at issue since both parties are perfectly well aware that if Joshua were ever short of potatoes, Henry would give him some.

And that’s about it. Of course it’s not clear, in this case, how long Henry will actually get to keep the shoes. It probably depends on how nice they are. If they were just ordinary shoes, this might be the end of the matter. If they are in any way unique or beautiful, they might end up being passed around. There’s a famous story that John and Lorna Marshall, who carried out a study of Kalahari Bushmen in the ’60s, once gave a knife to one of their favorite informants. They left and came back a year later, only to discover that pretty much everyone in the band had been in possession of the knife at some point in between. On the other hand, several Arab friends confirm to me that in less strictly egalitarian contexts, there is an expedient. If a friend praises a bracelet or bag, you are normally expected to immediately say “take it” — but if you are really determined to hold on to it, you can always say, “yes, isn’t it beautiful? It was a gift.”

But clearly, the authors of the textbook have a slightly more im¬ personal transaction in mind. The authors seem to imagine the two men as the heads of patriarchal households, on good terms with each other, but who keep their own supplies. Perhaps they live in one of those Scottish villages with the butcher and the baker in Adam Smith’s examples, or a colonial settlement in New England. Except for some reason they’ve never heard of money. It’s a peculiar fantasy, but let’s see what we can do:

SCENARIO 2

Henry walks up to Joshua and says, “Nice shoes!”

Or, perhaps — let’s make this a bit more realistic — Henry’s wife is chatting with Joshua’s and strategically lets slip that the state of Henry’s shoes is getting so bad he’s complaining about corns.

36

DEBT

The message is conveyed, and Joshua comes by the next day to offer his extra pair to Henry as a present, insisting that this is just a neighborly gesture. He would certainly never want anything in return.

It doesn’t matter whether Joshua is sincere in saying this. By do¬ ing so, Joshua thereby registers a credit. Henry owes him one.

How might Henry pay Joshua back? There are endless possi¬ bilities. Perhaps Joshua really does want potatoes. Henry waits a discrete interval and drops them off, insisting that this too is just a gift. Or Joshua doesn’t need potatoes now but Henry waits until he does. Or maybe a year later, Joshua is planning a banquet, so he comes strolling by Henry’s barnyard and says “Nice pig . . .”

In any of these scenarios, the problem of “double coincidence of wants,” so endlessly invoked in the economics textbooks, simply disap¬ pears. Henry might not have something Joshua wants right now. But if the two are neighbors, it’s obviously only a matter of time before he will.24

This in turn means that the need to stockpile commonly acceptable items in the way that Smith suggested disappears as well. With it goes the need to develop currency. As with so many actual small communi¬ ties, everyone simply keeps track of who owes what to whom.

There is just one major conceptual problem here — one the atten¬ tive reader might have noticed. Henry “owes Joshua one.” One what? How do you quantify a favor? On what basis do you say that this many potatoes, or this big a pig, seems more or less equivalent to a pair of shoes? Because even if these things remain rough-and-ready ap¬ proximations, there must be some way to establish that X is roughly equivalent to Y, or slightly worse or slightly better. Doesn’t this imply that something like money, at least in the sense of a unit of accounts by which one can compare the value of different objects, already has to exist?

In most gift economies, there actually is a rough-and-ready way to solve the problem. One establishes a series of ranked categories of types of thing. Pigs and shoes may be considered objects of roughly equivalent status, one can give one in return for the other; coral neck¬ laces are quite another matter, one would have to give back another necklace, or at least another piece of jewelry — anthropologists are used to referring to these as creating different “spheres of exchange.”25 This does simplify things somewhat. When cross-cultural barter becomes a regular and unexceptional thing, it tends to operate according to simi¬ lar principles: there are only certain things traded for certain others

THE MYTH OF BARTER

37

(cloth for spears, for example), which makes it easy to work out tra¬ ditional equivalences. However, this doesn’t help us at all with the problem of the origin of money. Actually, it makes it infinitely worse. Why stockpile salt or gold or fish if they can only be exchanged for some things and not others?

In fact, there is good reason to believe that barter is not a par¬ ticularly ancient phenomenon at all, but has only really become wide¬ spread in modern times. Certainly in most of the cases we know about, it takes place between people who are familiar with the use of money, but for one reason or another, don’t have a lot of it around. Elaborate barter systems often crop up in the wake of the collapse of national economies: most recently in Russia in the ’90s, and in Argentina around 2002, when rubles in the first case, and dollars in the second, effectively disappeared.26 Occasionally one can even find some kind of currency beginning to develop: for instance, in POW camps and many prisons, inmates have indeed been known to use cigarettes as a kind of cur¬ rency, much to the delight and excitement of professional economists.27 But here too we are talking about people who grew up using money and now have to make do without it — exactly the situation “imagined” by the economics textbooks with which I began.

The more frequent solution is to adopt some sort of credit system. When much of Europe “reverted to barter” after the collapse of the Roman Empire, and then again after the Carolingian Empire likewise fell apart, this seems to be what happened. People continued keeping accounts in the old imperial currency, even if they were no longer us¬ ing coins.28 Similarly, the Pukhtun men who like to swap bicycles for donkeys are hardly unfamiliar with the use of money. Money has ex¬ isted in that part of the world for thousands of years. They just prefer direct exchange between equals — in this case, because they consider it more manly.29

The most remarkable thing is that even in Adam Smith’s examples of fish and nails and tobacco being used as money, the same sort of thing was happening. In the years following the appearance of The Wealth of Nations, scholars checked into most of those examples and discovered that in just about every case, the people involved were quite familiar with the use of money, and in fact, were using money — as a unit of account.30 Take the example of dried cod, supposedly used as money in Newfoundland. As the British diplomat A. Mitchell-Innes pointed out almost a century ago, what Smith describes was really an illusion, created by a simple credit arrangement:

38

DEBT

In the early days of the Newfoundland fishing industry, there was no permanent European population; the fishers went there for the fishing season only, and those who were not fishers were traders who bought the dried fish and sold to the fishers their daily supplies. The latter sold their catch to the traders at the market price in pounds, shillings and pence, and obtained in return a credit on their books, with which they paid for their supplies. Balances due by the traders were paid for by drafts on England or France.31

It was quite the same in the Scottish village. It’s not as if anyone actually walked into the local pub, plunked down a roofing nail, and asked for a pint of beer. Employers in Smith’s day often lacked coin to pay their workers; wages could be delayed by a year or more; in the meantime, it was considered acceptable for employees to carry off either some of their own products or leftover work materials, lumber, fabric, cord, and so on. The nails were de facto interest on what their employers owed them. So they went to the pub, ran up a tab, and when occasion permitted, brought in a bag of nails to charge off against the debt. The law making tobacco legal tender in Virginia seems to have been an attempt by planters to oblige local merchants to accept their products as a credit around harvest time. In effect, the law forced all merchants in Virginia to become middlemen in the tobacco business, whether they liked it or not; just as all West Indian merchants were obliged to become sugar dealers, since that’s what all their wealthier customers brought in to write off against their debt.

The primary examples, then, were ones in which people were improvising credit systems, because actual money — gold and silver coinage — was in short supply. But the most shocking blow to the con¬ ventional version of economic history came with the translation, first of Egyptian hieroglyphics, and then of Mesopotamian cuneiform, which pushed back scholars’ knowledge of written history almost three mil¬ lennia, from the time of Homer (circa 800 bc), where it had hovered in Smith’s time, to roughly 3500 bc. What these texts revealed was that credit systems of exactly this sort actually preceded the invention of coinage by thousands of years.

The Mesopotamian system is the best-documented, more so than that of Pharaonic Egypt (which appears similar), Shang China (about which we know little), or the Indus Valley civilization (about which we know nothing at all). As it happens, we know a great deal about Mesopotamia, since the vast majority of cuneiform documents were financial in nature.

THE MYTH OF BARTER

39

The Sumerian economy was dominated by vast temple and palace complexes. These were often staffed by thousands: priests and officials, craftspeople who worked in their industrial workshops, farmers and shepherds who worked their considerable estates. Even though ancient Sumer was usually divided into a large number of independent city- states, by the time the curtain goes up on Mesopotamian civilization around 3500, temple administrators already appear to have developed a single, uniform system of accountancy — one that is in some ways still with us, actually, because it’s to the Sumerians that we owe such things as the dozen or the 24-hour day.32 The 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 prin¬ ciple 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 ac¬ tually created by bureaucrats in order to keep track of resources and move things back and forth between departments.

Temple bureaucrats used the system to calculate debts (rents, fees, loans . . .) in silver. Silver was, effectively, money. And it did indeed circulate in the form of unworked chunks, “rude bars” as Smith had put it.33 In this he was right. But it was almost the only part of his ac¬ count that was right. One reason was that silver did not circulate very much. Most of it just sat around in Temple and Palace treasuries, some of which remained, carefully guarded, in the same place for literally thousands of years. It would have been easy enough to standardize the ingots, stamp them, create some authoritative system to guarantee their purity. The technology existed. Yet no one saw any particular need to do so. One reason was that while debts were calculated in silver, they did not have to be paid in silver — in fact, they could be paid in more or less anything one had around. Peasants who owed money to the Temple or Palace, or to some Temple or Palace official, seem to have settled their debts mostly in barley, which is why fixing the ratio of sil¬ ver to barley was so important. But it was perfectly acceptable to show up with goats, or furniture, or lapis lazuli. Temples and Palaces were huge industrial operations — they could find a use for almost anything.34

In the marketplaces that cropped up in Mesopotamian cities, pric¬ es were also calculated in silver, and the prices of commodities that weren’t entirely controlled by the Temples and Palaces would tend to fluctuate according to supply and demand. But even here, such evidence as we have suggests that most transactions were based on credit. Mer¬ chants (who sometimes worked for the Temples, sometimes operated

40

DEBT

independently) were among the few people who did, often, actually use silver in transactions; but even they mostly did much of their dealings on credit, and ordinary people buying beer from “ale women,” or lo¬ cal innkeepers, once again, did so by running up a tab, to be settled at harvest time in barley or anything they might have had at hand.35

At this point, just about every aspect of the conventional story of the origins of money lay in rubble. Rarely has an historical theory been so absolutely and systematically refuted. By the early decades of the twentieth century, all the pieces were in place to completely rewrite the history of money. The groundwork was laid by Mitchell-Innes — the same one I’ve already cited on the matter of the cod — in two essays that appeared in New York’s Banking Law Journal in 1913 and 1914. In these, Mitchell-Innes matter-of-factly laid out the false assumptions on which existing economic history was based and suggested that what was really needed was a history of debt:

One of the popular fallacies in connection with commerce is that in modern days a money-saving device has been intro¬ duced called credit and that, before this device was known, all, purchases were paid for in cash, in other words in coins. A careful investigation shows that the precise reverse is true. In olden days coins played a far smaller part in commerce than they do to-day. Indeed so small was the quantity of coins, that they did not even suffice for the needs of the [Medieval Eng¬ lish] Royal household and estates which regularly used tokens of various kinds for the purpose of making small payments. So unimportant indeed was the coinage that sometimes Kings did not hesitate to call it all in for re-minting and re-issue and still commerce went on just the same.36

In 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 acciden¬ tal 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.

The curious thing is that it never happened. This new history was never written. It’s not that any economist has ever refuted Mitchell-Innes. They just ignored him. Textbooks did not change their story — even if

THE MYTH OF BARTER

41

all the evidence made clear that the story was simply wrong. People still write histories of money that are actually histories of coinage, on the assumption that in the past, these were necessarily the same thing; periods when coinage largely vanished are still described as times when the economy “reverted to barter,” as if the meaning of this phrase is self-evident, even though no one actually knows what it means. As a result we have next-to-no idea how, say, the inhabitant of a Dutch town in 950 ad actually went about acquiring cheese or spoons or hir¬ ing musicians to play at his daughter’s wedding — let alone how any of this was likely to be arranged in Pemba or Samarkand.’7

Chapter Three

PRIMORDIAL DEBTS

In being born every being is born as debt owed to the gods, the saints, the Fathers and to men. If one makes a sac¬ rifice, it is because of a debt owing to the god$ from birth . . . If one recites a sacred text, it is because of a debt owing to the saints . . . If one wishes for off¬ spring, it is because of a debt due to the fathers from birth . . . And if one gives hospitality, it is because it is a debt ow- ‘ ing to men.

— Satapatha Brahmana 1.7.12, 1 -6

Let us drive away the evil effects of bad dreams, just as we pay off debts.

— Rig Veda 8.47.17

THE REASON THAT economics textbooks now begin with imaginary villages is because it has been impossible to talk about real ones. Even some economists have been forced to admit that Smith’s Land of Barter doesn’t really exist.1

The question is why the myth has been perpetuated, anyway. Economists have long since jettisoned other elements of The Wealth of Nations — for instance, Smith’s labor theory of value and disapproval of joint-stock corporations. Why not simply write off the myth of bar¬ ter as a quaint Enlightenment parable, and instead attempt to under¬ stand primordial credit arrangements — or anyway, something more in keeping with the historical evidence?

The answer seems to be that the Myth of Barter cannot go away, because it is central to the entire discourse of economics.

44

DEBT

Recall 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 some¬ thing 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.2 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.3

Once economics had been established as a discipline, the theological arguments no longer seemed necessary or important. People continue to argue about whether an unfettered free market really will produce the results that Smith said it would; but no one questions whether “the market” naturally exists. The underlying assumptions that derive from this came to be seen as common sense — so much so that, as I’ve noted, we simply assume that when valuable objects do change hands, it will normally be because two individuals have both decided they would gain a material advantage by swapping them. One interesting corollary is that, as a result, economists have come to see the very question of the presence or absence of money as not especially important, since money is just a commodity, chosen to facilitate exchange, and which we use to measure the value of other commodities. Otherwise, it has no special qualities. Still, in 1958, Paul Samuelson, one of the leading lights of the neoclassical school that still predominates in modern economic thought, could express disdain for what he called “the social contriv¬ ance of money.” “Even in the most advanced industrial economies,” he insisted, “if we strip exchange down to its barest essentials and peel off the obscuring layer of money, we find that trade between individuals and nations largely boils down to barter.”4 Others spoke of a “veil of money” obscuring the nature of the “real economy” in which people produced real goods and services and swapped them back and forth.5

Call this the final apotheosis of economics as common sense. Money is unimportant. Economies — “real economies” — are really vast

PRIMORDIAL DEBTS

45

barter systems. The problem is that history shows that without money, such vast barter systems do not occur. Even when economies “revert to barter,” as Europe was said to do in the Middle Ages, they don’t actu¬ ally abandon the use of money. They just abandon the use of cash. In the Middle Ages, for instance, everyone continued to assess the value of tools and livestock in the old Roman currency, even if the coins themselves had ceased to circulate.6

It’s money that had made it possible for us to imagine ourselves in the way economists encourage us to do: as a collection of individuals and nations whose main business is swapping things. It’s also clear that the mere existence of money, in itself, is not enough to allow us see the world this way. If it were, the discipline of economics would have been created in ancient Sumer, or anyway, far earlier than 1 776, when Adam Smith’s The Wealth of Nations appeared.

The missing element is in fact exactly the thing Smith was at¬ tempting to downplay: the role of government policy. In England, in Smith’s day, it became possible to see the market, the world of butch¬ ers, ironmongers, and haberdashers, as its own entirely independent sphere of human activity because the British government was actively engaged in fostering it. This required laws and police, but also, specific monetary policies, which liberals like Smith were (successfully) advo¬ cating.7 It required pegging the value of the currency to silver, but at the same time greatly increasing the money supply, and particularly the amount of small change in circulation. This not only required huge amounts of tin and copper, but also the careful regulation of the banks that were, at that time, the only source of paper money. The century before The Wealth of Nations had seen at least two attempts to create state-supported central banks, in France and Sweden, that had proven to be spectacular failures. In each case, the would-be cen¬ tral bank issued notes based largely on speculation that collapsed the moment investors lost faith. Smith supported the use of paper money, but like Locke before him, he also believed that the relative success of the Bank of England and Bank of Scotland had been due to their policy of pegging paper money firmly to precious metals. This became the mainstream economic view, so much so that alternative theories of money as credit — the one that Mitchell-Innes advocated — were quickly relegated to the margins, their proponents written off as cranks, and the very sort of thinking that led to bad banks and speculative bubbles in the first place.

It might be helpful, then, to consider what these alternative theo¬ ries actually were.

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State and Credit Theories of Money

Mitchell-Innes was an exponent of what came to be known as the Credit Theory of money, a position that over the course of the nine¬ teenth 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. You 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 cor¬ rectly noted, historically, such abstract systems of accounting emerged long before the use of any particular token of exchange.8

The obvious next question is: If money is a just a yardstick, what then does it measure? The answer was simple: debt. A coin is, effec¬ tively, an IOU. Whereas conventional wisdom holds that a banknote is, or should be, a promise to pay a certain amount of “real money” (gold, silver, whatever that might be taken to mean). Credit Theorists argued that a banknote is simply the promise to pay something of the same value as an ounce of gold. But that’s all that money ever is. There’s no fundamental difference in this respect between a silver dollar, a Susan B. Anthony dollar coin made of a copper-nickel alloy designed to look vaguely like gold, a green piece of paper with a picture of George Washington on it, or a digital blip on some bank’s computer. Conceptually, the idea that a piece of gold is really just an IOU is always rather difficult to wrap one’s head around, but something like this must be true, because even when gold and silver coins were in use, they almost never circulated at their bullion value.

How could credit money come about? Let us return to the econom¬ ics professors’ imaginary town. Say, for example, that Joshua were to give his shoes to Henry, and, rather than Henry owing him a fa¬ vor, Henry promises him something of equivalent value.9 Henry gives Joshua an IOU. Joshua could wait for Henry to have something use¬ ful, 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 is money 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

PRIMORDIAL DEBTS

47

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 anthropolo¬ gist 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 mer¬ chants 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.

What credit theorists like Mitchell-Innes were arguing is that even if Henry gave Joshua a gold coin instead of a piece of paper, the situ¬ ation would be essentially the same. A gold coin is a promise to pay something else of equivalent value to a gold coin. After all, a gold coin is not actually useful in itself. One only accepts it because one assumes other people will.

In this sense, the value of a unit of currency is not the measure of the value of an object, but the measure of one’s trust in other human beings.

This element of trust of course makes everything more compli¬ cated. Early banknotes circulated via a process almost exactly like what I’ve just described, except that, like the Chinese merchants, each recipient added his or her signature to guarantee the debt’s legitimacy. But generally, the difficulty in the Chartalist position — this is what it came to be called, from the Latin charta, or token — is to establish why people would continue to trust a piece of paper. After all, why couldn’t anyone just sign Henry’s name on an IOU? True, this sort of debt-token system might work within a small village where every¬ one knew one another, or even among a more dispersed community like sixteenth-century Italian or twentieth-century Chinese merchants, where everyone at least had ways of keeping track of everybody else. But systems like these cannot create a full-blown currency system, and there’s no evidence that they ever have. Providing a sufficient number of IOUs to allow everyone even in a medium-sized city to be able to carry out a significant portion of their daily transactions in such cur¬ rency would require millions of tokens.10 To be able to guarantee all of them, Henry would have to be almost unimaginably rich.

All this would be much less of a problem, however, if Henry were, say, Henry II, King of England, Duke of Normandy, Lord of Ireland, and Count of Anjou.

The real impetus for the Chartalist position, in fact, came out of what came to be known as the “German Historical School,” whose

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most famous exponent was the historian G.F. Knapp, whose State Theory of Money first appeared in 1905. 11 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 re¬ mained in circulation, and those coins that did circulate tended to vary enormously in size, weight, purity, and value.12 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 case of Charlemagne’s currency is par¬ ticularly dramatic because his actual empire dissolved quite quickly, but the monetary system he created continued to be used, for keeping accounts, within his former territories for more than 800 years. It was referred to, in the sixteenth century, quite explicitly as “imaginary money,” and derniers and livres were only completely abandoned, as units of account, around the time of the French Revolution.13

According to Knapp, whether or not the actual, physical money stuff in circulation corresponds to this “imaginary money” is not par¬ ticularly important. It makes no real difference whether it’s pure sil¬ ver, 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.14

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49

Modern banknotes actually work on a similar principle, except in reverse.ls 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.16

If nothing else, this approach helps solve one of the obvious mys¬ teries of the fiscal policy of so many early kingdoms: Why did they make subjects pay taxes at all? This is not a question we’re used to asking. The answer seems self-evident. Governments demand taxes be¬ cause they wish to get their hands on people’s money. But if Smith was right, and gold and silver became money through the natural workings of the market completely independently of governments, then wouldn’t the obvious thing be to just grab control of the gold and silver mines? Then the king would have all the money he could possibly need. In fact, this is what ancient kings would normally do. If there were gold and silver mines in their territory, they would usually take control of them. So what exactly was the point of extracting the gold, stamping one’s picture on it, causing it to circulate among one’s subjects — and then demanding that those same subjects give it back again?

This does seem a bit of a puzzle. But if money and markets do not emerge spontaneously, it actually makes perfect sense. Because this is the simplest and most efficient way to bring markets into being. Let us take a hypothetical example. Say a king wishes to support a stand¬ ing army of fifty thousand men. Under ancient or medieval conditions, feeding such a force was an enormous problem — unless they were on the march, one would need to employ almost as many men and ani¬ mals just to locate, acquire, and transport the necessary provisions.17 On the other hand, if one simply hands out coins to the soldiers and

50

DEBT

then demands that every family in the kingdom was obliged to pay one of those coins back to you, one would, in one blow, turn one’s entire national economy into a vast machine for the provisioning of soldiers, since now every family, in order to get their hands on the coins, must find some way to contribute to the general effort to provide soldiers with things they want. Markets are brought into existence as a side effect.

This is a bit of a cartoon version, but it is very clear that markets did spring up around ancient armies; one need only take a glance at Kautilya’s Arthasasatra, the Sassanian “circle of sovereignty,” or the Chinese “Discourses on Salt and Iron” to discover that most ancient rulers spent a great deal of their time thinking about the relation be¬ tween mines, soldiers, taxes, and food. Most concluded that the cre¬ ation of markets of this sort was not just convenient for feeding sol¬ diers, but useful in all sorts of ways, since it meant officials no longer had to requisition everything they needed directly from the populace, or figure out a way to produce it on royal estates or royal workshops. In other words, despite the dogged liberal assumption — again, com¬ ing from Smith’s legacy — that the existence of states and markets are somehow opposed, the historical record implies that exactly the op¬ posite is the case. Stateless societies tend also to be without markets.

As one might imagine, state theories of money have always been anathema to mainstream economists working in the tradition of Adam Smith. In fact, Chartalism has tended to be seen as a populist underside of economic theory, favored mainly by cranks.18 The curious thing is that the mainstream economists often ended up actually working for governments and advising such governments to pursue policies much like those the Chartalists described — that is, tax policies designed to create markets where they had not existed before — despite the fact that they were in theory committed to Smith’s argument that markets develop spontaneously of their own accord.

This was particularly true in the colonial world. To return to Mad¬ agascar for a moment: I have already mentioned that one of the first things that the French general Gallieni, conqueror of Madagascar, did when the conquest of the island was complete in 1901 was to impose a head tax. Not only was this tax quite high, it was also only payable in newly issued Malagasy francs. In other words, Gallieni did indeed print money and then demand that everyone in the country give some of that money back to him.

Most striking of all, though, was language he used to describe this tax. It was referred to as the “impot moralisateur," the “educational” or “moralizing tax.” In other words, it was designed — to adopt the

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51

language of the day — to teach the natives the value of work. Since the “educational tax” came due shortly after harvest time, the easiest way for farmers to pay it was to sell a portion of their rice crop to the Chinese or Indian merchants who soon installed themselves in small towns across the country. However, harvest was when the market price of rice was, for obvious reasons, at its lowest; if one sold too much of one’s crop, that meant one would not have enough left to feed one’s family for the entire year, and thus be forced to buy one’s own rice back, on credit, from those same merchants later in the year when prices were much higher. As a result, farmers quickly fell hope¬ lessly into debt (the merchants doubling as loan sharks). The easiest ways to pay back the debt was either to find some kind of cash crop to sell — to start growing coffee, or pineapples — or else to send one’s children off to work for wages in the city, or on one of the plantations that French colonists were establishing across the island. The whole project might seem no more than a cynical scheme to squeeze cheap labor out of the peasantry, and it was that, but it was also something more. The colonial government was were also quite explicit (at least in their own internal policy documents), about the need to make sure that peasants had at least some money of their own left over, and to ensure that they became accustomed to the minor luxuries — parasols, lipstick, cookies — available at the Chinese shops. It was crucial that they develop new tastes, habits, and expectations; that they lay the foundations of a consumer demand that would endure long after the conquerors had left, and keep Madagascar forever tied to France.

Most people are not stupid, and most Malagasy understood ex¬ actly what their conquerors were trying to do to them. Some were determined to resist. More than sixty years after the invasion, a French anthropologist, Gerard Althabe, was able to observe villages on the east coast of the island whose inhabitants would dutifully show up at the coffee plantations to earn the money for their poll tax, and then, having paid it, studiously ignore the wares for sale at the local shops and instead turn over any remaining money to lineage elders, who would then use it to buy cattle for sacrifice to their ancestors.19 Many were quite open in saying that they saw themselves as resisting a trap.

Still, such defiance rarely lasts forever. Markets did gradually take shape, even in those parts of the island where none had previously existed. With them came the inevitable network of little shops. And by the time I got there, in 1990, a generation after the poll tax had finally been abolished by a revolutionary government, the logic of the market had become so intuitively accepted that even spirit mediums were recit¬ ing passages that might as well have come from Adam Smith.

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Such examples could be multiplied endlessly. Something like this occurred in just about every part of the world conquered by European arms where markets were not already in place. Rather than discovering barter, they ended up using the very techniques that mainstream eco¬ nomics rejected to bring something like the market into being.

In Search of a Myth

Anthropologists have been complaining about the Myth of Barter for almost a century. Occasionally, economists point out with slight ex¬ asperation that there’s a fairly simple reason why they’re still telling the same story despite all the evidence against it: anthropologists have never come up with a better one.20 This is an understandable objection, but there’s a simple answer to it. The reasons why anthropologists haven’t been able to come up with a simple, compelling story for the origins of money is because there’s no reason to believe there could be one. Money was no more ever “invented” than music or mathematics or jewelry. What we call “money” isn’t a “thing” at all, it’s a way of comparing things mathematically, as proportions: of saying one of X is equivalent to six of Y. As such it is probably as old as human thought. The moment we try to get any more specific, we discover that there are any number of different habits and practices that have converged in the stuff we now call “money,” and this is precisely the reason why economists, historians, and the rest have found it so difficult to come up with a single definition.

Credit Theorists have long been hobbled by the lack of an equally compelling narrative. This is not to say that all sides in the currency debates that ranged between 1850 and 1950 were not in the habit of deploying mythological weaponry. This was true particularly, perhaps, in the United States. In 1894, the Greenbackers, who pushed for de¬ taching 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. his¬ tory. L. Frank Baum’s book The Wonderful Wizard of Oz, which ap¬ peared in 1900, is widely recognized 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.21 As with the Greenbackers, one of the main constitu¬ encies for the movement was debtors: particularly, Midwestern farm

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53

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.22 “Oz” is of course the standard abbreviation for “ounce.”23 As an attempt to create a new myth, Baum’s story was remarkably ef¬ fective. 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 W onderful Wiz¬ ard of Oz was originally supposed to be about.24

For state-money theorists in particular, this has been a problem. Stories about rulers using taxes to create markets in conquered territo¬ ries, or to pay for soldiers or other state functions, are not particularly inspiring. German ideas of money as the embodiment of national will did not travel very well.

Every time there was a major economic meltdown, however, con¬ ventional laissez-faire economics took another hit. The Bryan cam¬ paigns were born as a reaction to the Panic of 1893. By the time of the Great Depression of the 1930s, the very notion that the market could regulate itself, so long as the government ensured that money was safe¬ ly pegged to precious metals, was completely discredited. From roughly I933 to I979> every major capitalist government reversed course and adopted some version of Keynesianism. Keynesian orthodoxy started from the assumption that capitalist markets would not really work unless capitalist governments were willing effectively to play nanny: most famously, by engaging in massive deficit “pump-priming” during downturns. While in the ’80s, Margaret Thatcher in Britain and Ron¬ ald Reagan in the United States made a great show of rejecting all of this, it’s unclear how much they really did.25 And in any case, they were operating in the wake of an even greater blow to previous monetary orthodoxy: Richard Nixon’s decision in 1971 to unpeg the dollar from precious metals entirely, eliminate the international gold standard, and introduce the system of floating currency regimes that has dominated the world economy ever since. This meant in effect that all national currencies were henceforth, as neoclassical economists like to put it, “fiat money” backed only by the public trust.

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Now, John Maynard Keynes himself was much more open to what he liked to call the “alternative tradition” of credit and state theories than any economist of that stature (and Keynes is still arguably the sin¬ gle most important economic thinker of the twentieth century) before or since. At certain points he immersed himself in it: he spent several years in the 1920s studying Mesopotamian cuneiform banking records to try to ascertain the origins of money — his “Babylonian madness,” as he would later call it.26 His conclusion, which he set forth at the very beginning of his Treatise on Money, his most famous work, was more or less the only conclusion one could come to if one started not from first principles, but from a careful examination of the historical record: that the lunatic fringe was, essentially, right. Whatever its earli¬ est origins, for the last four thousand years, money has been effectively a creature of the state. Individuals, he observed, make contracts with one another. They take out debts, and they promise payment.

The State, therefore, comes in first of all as the authority of law which enforces the payment of the thing which corresponds to the name or description in the contract. But it comes doubly when, in addition, it claims the right to determine and declare what thing corresponds to the name, and to vary its declara¬ tion from time to time — when, that is to say it claims the right to re-edit the dictionary. This right is claimed by all modern States and has been so claimed for some four thousand years at least. It is when this stage in the evolution of Money has been reached that Knapp’s Chartalism — the doctrine that mon¬ ey is peculiarly a creation of the State — is fully realized . . . To-day all civilized money is, beyond the possibility of dispute, chartalist.27

This does not mean that the state necessarily creates money. Mon¬ ey is credit, it can be brought into being by private contractual agree¬ ments (loans, for instance). The state merely enforces the agreement and dictates the legal terms. Hence Keynes’ next dramatic assertion: that banks create money, and that there is no intrinsic limit to their ability to do so: since however much they lend, the borrower will have no choice but to put the money back into some bank again, and thus, from the perspective of the banking system as a whole, the total number of debits and credits will always cancel out.28 The implications were radical, but Keynes himself was not. In the end, he was always careful to frame the problem in a way that could be reintegrated into the mainstream economics of his day.

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Neither was Keynes much of a mythmaker. Insofar as the alterna¬ tive tradition has come up with an answer to the Myth of Barter, it was not from Keynes’ own efforts (Keynes ultimately decided that the origins of money were not particularly important) but in the work of some contemporary neo-Keynesians, who were not afraid to follow some of his more radical suggestions as far as they would go.

The real weak link in state-credit theories of money was always the element of taxes. It is one thing to explain why early states demanded taxes (in order to create markets.) It’s another to ask “by what right?” Assuming that early rulers were not simply thugs, and that taxes were not simply extortion — and no Credit Theorist, to my knowledge, took such a cynical view even of early government — one must ask how they justified this sort of thing.

Nowadays, we all think we know the answer to this question. We pay our taxes so that the government can provide us with services. This starts with security services — military protection being, often, about the only service some early states were really able to provide. By now, of course, the government provides all sorts of things. All of this is said to go back to some sort of original “social contract” that everyone somehow agreed on, though no one really knows exactly when or by whom, or why we should be bound by the decisions of distant ances¬ tors on this one matter when we don’t feel particularly bound by the decisions of our distant ancestors on anything else.29 All of this makes sense if you assume that markets come before governments, but the whole argument totters quickly once you realize that they don’t.

There is an alternative explanation, one created to be in keeping with the state-credit theory approach. It’s referred to as “primordial debt theory” and it has been developed largely in France, by a team of researchers — not only economists but anthropologists, historians, and classicists — originally assembled around the figures of Michel Aglietta and Andre Orleans,’0 and more recently, Bruno Theret, and it has since been taken up by neo-Keynesians in the United States and the United Kingdom as well.31

It’s a position that has emerged quite recently, and at first, largely amidst debates about the nature of the euro. The creation of a common European currency sparked not only all sorts of intellectual debates (does a common currency necessarily imply the creation of a common European state? Or of a common European economy or society? Are these ultimately the same thing?) but dramatic political ones as well. The creation of the euro zone was spearheaded above all by Germany, whose central banks still see their main goal as combating inflation. What’s more, tight money policies and the need to balance budgets

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having been used as the main weapon to chip away welfare-state poli¬ cies in Europe, it has necessarily become the stake of political struggles between bankers and pensioners, creditors and debtors, just as heated as those of 1890s America.

The core argument is that any attempt to separate monetary policy from social policy is ultimately wrong. Primordial-debt theorists insist that these have always been the same thing. Governments use taxes to create money, and they are able to do so because they have become the guardians of the debt that all citizens have to one another. This debt is the essence of society itself. It exists long before money and markets, and money and markets themselves are simply ways of chopping pieces of it up.

At first, the argument goes, this sense of debt was expressed not through the state, but through religion. To make the argument, Aglietta and Orleans fixed on certain works of early Sanskrit religious literature: the hymns, prayers, and poetry collected in the Vedas and the Brahma- nas, priestly commentaries composed over the centuries that followed, texts that are now considered the foundations of Hindu thought. It’s not as odd a choice as it might seem. These texts constitute the earliest known historical reflections on the nature of debt.

Actually, 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.32 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, f°r 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. Often, even in the very early texts, debt seems to stand in for a broader sense of inner suffering, from which one begs the gods — particularly Agni, who represents the sacrificial fire — for release. It was only with the Brahmanas that com¬ mentators started trying to weave all this together into a more com¬ prehensive philosophy. The conclusion: that human existence is itself a form of debt.

A man, being born, is a debt; by his own self he is born to Death, and only when he sacrifices does he redeem himself from Death.33

PRIMORDIAL DEBTS

57

Sacrifice (and these early commentators were themselves sacrificial priests) is thus called “tribute paid to Death.” Or such was the manner of speaking. In reality, as the priests knew better than anyone, sacrifice was directed to all the gods, not just Death — Death was just the inter¬ mediary. Framing things this way, though, did immediately raise the one problem that always comes up, whenever anyone conceives human life through such an idiom. If our lives are on loan, who would actually wish to repay such a debt? To live in debt is to be guilty, incomplete. But completion can only mean annihilation. In this way, the “tribute” of sacrifice could be seen as a kind of interest payment, with the life of the animal substituting temporarily for what’s really owed, which is ourselves — a mere postponement of the inevitable.34

Different commentators proposed different ways out of the dilem¬ ma. Some ambitious Brahmins began telling their clients that sacrificial ritual, if done correctly, promised a way to break out of the human condition entirely and achieve eternity (since, in the face of eternity, all debts become meaningless. )3i Another way was to broaden the notion of debt, so that all social responsibilities become debts of one sort or another. Thus two famous passages in the Brahmanas insist that we are born as a debt not just to the gods, to be repaid in sacrifice, but also to the Sages who created the Vedic learning to begin with, which we must repay through study; to our ancestors (“the Fathers”), who we must repay by having children; and finally, “to men” — apparently meaning humanity as a whole, to be repaid by offering hospitality to strangers.36 Anyone, then, who lives a proper life is constantly paying back existential debts of one sort or another; but at the same time, as the notion of debt slides back into a simple sense of social obligation, it becomes something far less terrifying than the sense that one’s very existence is a loan taken against Death.37 Not least because social ob¬ ligations always cut both ways. Especially since, once one has oneself fathered children, one is just as much a debtor as a creditor.

What primordial-debt theorists have done is to propose that the ideas encoded in these Vedic texts are not peculiar to a certain intel¬ lectual tradition of early Iron Age ritual specialists in the Ganges val¬ ley, but that they are essential to the very nature and history of human thought. Consider for example this statement, from an essay by French economist Bruno Theret with the uninspiring title “The Socio-Cultural Dimensions of the Currency: Implications for the Transition to the Euro,” published in the Journal of Consumer Policy in 1999:

At the origin of money we have a “relation of representa¬ tion” of death as an invisible world, before and beyond life — a

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representation that is the product of the symbolic function proper to the human species and which envisages birth as an original debt incurred by all men, a debt owing to the cosmic powers from which humanity emerged.

Payment of this debt, which can however never be settled on earth — because its full reimbursement is out of reach — takes the form of sacrifices which, by replenishing the credit of the living, make it possible to prolong life and even in certain cases to achieve eternity by joining the Gods. But this initial belief- claim is also associated with the emergence of sovereign powers whose legitimacy resides in their ability to represent the entire original cosmos. And it is these powers that invented money as a means of settling debts — a means whose abstraction makes it possible to resolve the sacrificial paradox by which put¬ ting to death becomes the permanent means of protecting life. Through this institution, belief is in turn transferred to a cur¬ rency stamped with the effigy of the sovereign — a money put in circulation but whose return is organized by this other institu¬ tion which is the tax/settlement of the life debt. So money also takes on the function of a means of payment.38

If nothing else, this provides a neat illustration of how different are standards of debate in Europe from those current in the Anglo- American world. One can’t imagine an American economist of any stripe writing something like this. Still, the author is actually making a rather clever synthesis here. Human nature does not drive us to “truck and barter.” Rather, it ensures that we are always creating symbols — such as money itself. This is how we come to see ourselves in a cosmos surrounded by invisible forces; as in debt to the universe.

The ingenious move of course is to fold this back into the state theory of money — since by “sovereign powers” Theret actually means “the state.” The first kings were sacred kings who were either gods in their own right or stood as privileged mediators between human beings and the ultimate forces that governed the cosmos. This sets us on a road to the gradual realization that our debt to the gods was always, really, a debt to the society that made us what we are.

The “primordial debt,” writes British sociologist Geoffrey Ingham, “is that owed by the living to the continuity and durability of the soci¬ ety that secures their individual existence.”39 In this sense it is not just criminals who owe a “debt to society” — we are all, in a certain sense, guilty, even criminals.

PRIMORDIAL DEBTS

59

For instance, Ingham notes that, while there is no actual proof that money emerged in this way, “there is considerable indirect etymologi¬ cal evidence”:

In all Indo-European languages, words for “debt” are synony¬ mous with those for “sin” or “guilt”, illustrating the links be¬ tween religion, payment and the mediation of the sacred and profane realms by “money.” For example, there is a connection between money (German Geld), indemnity or sacrifice (Old English Geild), tax (Gothic Gild) and, of course, guilt.40

Or, 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 actu¬ ally 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 of¬ fered the gods in sacrifice. Hence they 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.41

If the king has simply taken over guardianship of that primordial debt we all owe to society for having created us, this provides a very neat explanation for why the government feels it has the right to make us pay taxes. Taxes are just a measure of our debt to the society that made us. But this doesn’t really explain how this kind of absolute life- debt can be converted into money, which is by definition a means of measuring and comparing the value of different things. This is just as much a problem for credit theorists as for neoclassical economists, even if the problem for them is somewhat differently framed. If 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 cousins, or the bartender?

The answer provided by primordial-debt theorists is, again, inge¬ nious. If taxes represent our absolute debt to the society that created

60

DEBT

us, then the first step toward creating real money comes when we start calculating much more specific debts to society, systems of fines, fees, and penalties, or even debts we owe to specific individuals who we have wronged in some way, and thus to whom we stand in a relation of “sin” or “guilt.”

This is actually much less implausible than it might sound. One of the puzzling things about all the theories about the origins of money that we’ve been looking at so far is that they almost completely ig¬ nore the evidence of anthropology. Anthropologists do have a great deal of knowledge of how economies within stateless societies actually worked — how they still work in places where states and markets have been unable to completely break up existing ways of doing things. There are innumerable studies of, say, the use of cattle as money in eastern or southern Africa, of shell money in the Americas (wampum being the most famous example) or Papua New Guinea, bead money, feather money, the use of iron rings, cowries, spondylus shells, brass rods, or woodpecker scalps.42 The reason that this literature tends to be ignored by economists is simple: “primitive currencies” of this sort is only rarely used to buy and sell things, and even when they are, never primarily to buy and sell everyday items such as chickens or eggs or shoes or potatoes. Rather than being employed to acquire things, they are mainly used to rearrange relations between people. Above all, to arrange marriages and to settle disputes, particularly those arising from murders or personal injury.

There 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.4’

Debt theorists are especially concerned with this latter possibil¬ ity. This is partly because they tend to skip past the anthropological literature and look at early law codes — taking inspiration here, from the groundbreaking work of one of the twentieth century’s greatest nu¬ mismatists, Philip Grierson, who in the ’70s, first suggested that money might first have emerged from early legal practice. Grierson was an expert in the European Dark Ages, and he became fascinated by what have come to be known as the “Barbarian Law Codes,” established by many Germanic peoples after the destruction of the Roman Empire in the 600s and 700s — Goths, Frisians, Franks, and so on — soon followed by similar codes published everywhere from Russia to Ireland. Cer¬ tainly they are fascinating documents. On the one hand, they make it

PRIMORDIAL DEBTS

61

abundantly clear just how wrong are conventional accounts of Europe around this time “reverting to barter.” Almost all of the Germanic law codes use Roman money to make assessments; penalties for theft, for instance, are almost always followed by demands that the thief not only return the stolen property but pay any outstanding rent (or in the event of stolen money, interest) owing for the amount of time it has been in his possession. On the other hand, these were soon followed by law codes by people living in territories that had never been under Ro¬ man rule — in Ireland, Wales, Nordic countries, Russia — and these are if anything even more revealing. They could be remarkably creative, both in what could be used as a means of payment and on the precise breakdown of injuries and insults that required compensation:

Compensation in the Welsh laws is reckoned primarily in cattle and in the Irish ones in cattle or bondmaids ( cumal ), with considerable use of precious metals in both. In the Germanic codes it is mainly in precious metal ... In the Russian codes it was silver and furs, graduated from marten down to squirrel.

Their detail is remarkable, not only in the personal injuries envisioned — specific compensations for the loss of an arm, a hand, a forefinger, a nail, for a blow on the head so that the brain is visible or bone projects — but in the coverage some of them gave to the possessions of the individual household. Title II of the Salic Law deals with the theft of pigs. Title III with cattle, Title IV with sheep, Title V with goats, Title VI with dogs, each time with an elaborate breakdown differentiating between animals of different age and sex.44

This does make a great deal of psychological sense. I’ve already remarked how difficult it is to imagine how a system of precise equivalences — one young healthy milk cow is equivalent to exactly thirty-six chickens — could arise from most forms of gift exchange. If Henry gives Joshua a pig and feels he has received an inadequate counter-gift, he might mock Joshua as a cheapskate, but he would have little occasion to come up with a mathematical formula for precisely how cheap he feels Joshua has been. On the other hand, if Joshua’s pig just destroyed Henry’s garden, and especially, if that led to a fight in which Henry lost a toe, and Henry’s family is now hauling Joshua up in front of the village assembly — this is precisely the context where people are most likely to become petty and legalistic and express out¬ rage if they feel they have received one groat less than was their right¬ ful due. That means exact mathematical specificity: for instance, the

62

DEBT

capacity to measure the exact value of a two-year-old pregnant sow. What’s more, the levying of penalties must have constantly required the calculation of equivalences. Say the fine is in marten pelts but the culprit’s clan doesn’t have any martens. How many squirrel skins will do? Or pieces of silver jewelry? Such problems must have come up all the time and led to at least a rough-and-ready set of rules of thumb over what sorts of valuable were equivalent to others. This would help explain why, for instance, medieval Welsh law codes can contain detailed breakdowns not only of the value of different ages and condi¬ tions of milk cow, but of the monetary value of every object likely to be found in an ordinary homestead, down to the cost of each piece of timber — despite the fact that there seems no reason to believe that most such items could even be purchased on the open market at the time.45

There is something very compelling in all this. For one thing, the prem¬ ise makes a great deal of intuitive sense. After all, we do owe every¬ thing 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. The question is: Does it really make sense to think of this as a debt? After all, a debt is by definition some¬ thing that we could at least imagine paying back. It is strange enough to wish to be square with one’s parents — it rather implies that one does not wish to think of them as parents any more. Would we really want to be square with all humanity? What would that even mean? And is this desire really a fundamental feature of all human thought?

Another way to put this would be: Are primordial-debt theorists describing a myth, have they discovered a profound truth of the hu¬ man condition that has always existed in all societies, and is it simply spelled out particularly clearly in certain ancient texts from India — or are they inventing a myth of their own?

Clearly it must be the latter. They are inventing a myth.

The choice of the Vedic material is significant. The fact is, we know almost nothing about the people who composed these texts and little about the society that created them.46 We don’t even know if

PRIMORDIAL DEBTS

63

interest-bearing loans existed in Vedic India — which obviously has a bearing on whether priests really saw sacrifice as the payment of inter¬ est on a loan we owe to Death.47 As a result, the material can serve as a kind of empty canvas, or a canvas covered with hieroglyphics in an unknown language, on which we can project almost anything we want to. If we look at other ancient civilizations in which we do know some¬ thing about the larger context, we find that no such notion of sacrifice as payment is in evidence.48 If we look through the work of ancient theologians, we find that most were familiar with the idea that sacrifice was a way by which human beings could enter into commercial rela¬ tions with the gods, but that they felt it was patently ridiculous: If the gods already have everything they want, what exactly do humans have to bargain with?49 We’ve seen in the last chapter how difficult it is to give gifts to kings. With gods (let alone God) the problem is magnified infinitely. Exchange implies equality. In dealing with cosmic forces, this was simply assumed to be impossible from the start.

The notion that debts to gods were appropriated by the state, and thus became the bases for taxation systems, can’t really stand up either. The problem here is that in the ancient world, free citizens didn’t usually pay taxes. Generally speaking, tribute was levied only on conquered populations. This was already true in ancient Mesopotamia, where the inhabitants of independent cities did not usually have to pay direct taxes at all. Similarly, as Moses Finley put it, “Classical Greeks looked upon direct taxes as tyrannical and avoided them whenever pos¬ sible.50 Athenian citizens did not pay direct taxes of any sort; though the city did sometimes distribute money to its citizens, a kind of reverse taxation — sometimes directly, as with the proceeds of the Laurium sil¬ ver mines, and sometimes indirectly, as through generous fees for jury duty or attending the assembly. Subject cities, however, did have to pay tribute. Even within the Persian Empire, Persians did not have to pay tribute to the Great King, but the inhabitants of conquered provinces did.51 The same was true in Rome, where for a very long time, Roman citizens not only paid no taxes but had a right to a share of the tribute levied on others, in the form of the dole — the “bread” part of the fa¬ mous “bread and circuses.”52

In other words, Benjamin Franklin was wrong when he said that in this world nothing is certain except death and taxes. This obviously makes the idea that the debt to one is just a variation on the other much harder to maintain.

None of this, however, deals a mortal blow to the state theory of money. Even those states that did not demand taxes did levy fees, penalties, tariffs, and fines of one sort or another. But it is very hard

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DEBT

to reconcile with any theory that claims states were first conceived as guardians of some sort of cosmic, primordial debt.

It’s curious that primordial-debt theorists never have much to say about Sumer or Babylonia, despite the fact that Mesopotamia is where the practice of loaning money at interest was first invented, probably two thousand years before the Vedas were composed — and that it was also the home of the world’s first states. But if we look into Mesopo¬ tamian history, it becomes a little less surprising. Again, what we find there is in many ways the exact opposite of what such theorists would have predicted.

The reader will recall here that Mesopotamian city-states were dominated by vast Temples: gigantic, complex industrial institutions often staffed by thousands — including everyone from shepherds and barge-pullers to spinners and weavers to dancing girls and clerical ad¬ ministrators. By at least 2700 BC, ambitious rulers had begun to imitate them by creating palace complexes organized on similar terms — with the exception that where the Temples centered on the sacred chambers of a god or goddess, represented by a sacred image who was fed and clothed and entertained by priestly servants as if he or she were a liv¬ ing person. Palaces centered on the chambers of an actual live king. Sumerian rulers rarely went so far as to declare themselves gods, but they often came very close. However, when they did interfere in the lives of their subjects in their capacity as cosmic rulers, they did not do it by imposing public debts, but rather by canceling private ones.53

We don’t know precisely when and how interest-bearing loans originated, since they appear to predate writing. Most likely. Temple administrators invented the idea as a way of financing the caravan trade. This trade was crucial because while the river valley of ancient Mesopotamia was extraordinarily fertile and produced huge surpluses of grain and other foodstuffs, and supported enormous numbers of livestock, which in turn supported a vast wool and leather industry, it was almost completely lacking in anything else. Stone, wood, metal, even the silver used as money, all had to be imported. From quite early times, then, Temple administrators developed the habit of advancing goods to local merchants — some of them private, others themselves Temple functionaries — who would then go off and sell it overseas. Interest was just a way for the Temples to take their share of the re¬ sulting profits.54 However, once established, the principle seems to have quickly spread. Before long, we find not only commercial loans, but also consumer loans — usury in the classical sense of the term. By C2400 BC it already appears to have been common practice on the part of lo¬ cal officials, or wealthy merchants, to advance loans to peasants who

PRIMORDIAL DEBTS

65

were in financial trouble on collateral and begin to appropriate their possessions if they were unable to pay. It usually started with grain, sheep, goats, and furniture, then moved on to fields and houses, or, al¬ ternately or ultimately, family members. Servants, if any, went quickly, followed by children, wives, and in some extreme occasions, even the borrower himself. These would be reduced to debt-peons: not quite slaves, but very close to that, forced into perpetual service in the lend¬ er’s household — or, sometimes, in the Temples or Palaces themselves. In theory, of course, any of them could be redeemed whenever the bor¬ rower repaid the money, but for obvious reasons, the more a peasant’s resources were stripped away from him, the harder that became.

The effects were such that they often threatened to rip society apart. If for any reason there was a bad harvest, large proportions of the peasantry would fall into debt peonage; families would be bro¬ ken up. Before long, lands lay abandoned as indebted farmers fled their homes for fear of repossession and joined semi-nomadic bands on the desert fringes of urban civilization. Faced 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 as¬ suming power, and many were forced to repeat it periodically over the course of their reigns.

In Sumeria, 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.55

Michael Hudson argues that Mesopotamian kings were only in a position to do this because of their cosmic pretensions: in taking power, they saw themselves as literally recreating human society, and so were in a position to wipe the slate clean of all previous moral ob¬ ligations. Still, this is about as far from what primordial-debt theorists had in mind as one could possibly imagine.56

Probably the biggest problem in this whole body of literature is the ini¬ tial assumption: that we begin with an infinite debt to something called

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DEBT

“society.” It’s this debt to society that we project onto the gods. It’s this same debt that then gets taken up by kings and national governments.

What makes the concept of society so deceptive is that we assume the world is organized into a series of compact, modular units called “societies,” and that all people know which one they’re in. Histori¬ cally, this is very rarely the case. Imagine I am a Christian Armenian merchant living under the reign of Genghis Khan. What is “society” for me? Is it the city where I grew up, the society of international merchants (with its own elaborate codes of conduct) within which I conduct my daily affairs, other speakers of Armenian, Christendom (or maybe just Orthodox Christendom), or the inhabitants of the Mongol empire itself, which stretched from the Mediterranean to Korea? His¬ torically, kingdoms and empires have rarely been the most important reference points in peoples’ lives. Kingdoms rise and fall; they also strengthen and weaken; governments may make their presence known in people’s lives quite sporadically, and many people in history were never entirely clear whose government they were actually in. Even until quite recently, many of the world’s inhabitants were never even quite sure what country they were supposed to be in, or why it should mat¬ ter. My mother, who was born a Jew in Poland, once told me a joke from her childhood:

There was a small town located along the frontier between Russia and Poland; no one was ever quite sure to which it belonged. One day an official treaty was signed and not long after, surveyors arrived to draw a border. Some villagers ap¬ proached them where they had set up their equipment on a nearby hill.

“So where are we, Russia or Poland?”

“According to our calculations, your village now begins ex¬ actly thirty-seven meters into Poland.”

The villagers immediately began dancing for joy.

“Why?” the surveyors asked. “What difference does it make?”

“Don’t you know what this means?” they replied. “It means we’ll never have to endure another one of those terrible Rus¬ sian winters!”

However, if we are born with an infinite debt to all those people who made our existence possible, but there is no natural unit called “society” — then who or what exactly do we really owe it to? Everyone? Everything? Some people or things more than others? And how do we

PRIMORDIAL DEBTS

67

pay a debt to something so diffuse? Or, perhaps more to the point, who exactly can claim the authority to tell us how we can repay it, and on what grounds?

If we frame the problem that way, the authors of the Brahmanas are offering a quite sophisticated reflection on a moral question that no one has really ever been able to answer any better before or since. As I say, we can’t know much about the conditions under which those texts were composed, but such evidence as we do have suggests that the crucial documents date from sometime between 500 and 400 BC — that is, roughly the time of Socrates — which in India appears to have been just around the time that a commercial economy, and institutions like coined money and interest-bearing loans were beginning to become features of everyday life. The intellectual classes of the time were, much as they were in Greece and China, grappling with the implica¬ tions. In their case, this meant asking: What does it mean to imagine our responsibilities as debts? To whom do we owe our existence?

It’s significant that their answer did not make any mention either of “society” or states (though certainly kings and governments certainly existed in early India). Instead, they fixed on debts to gods, to sages, to fathers, and to “men.” It wouldn’t be at all difficult to translate their formulation into more contemporary language. We could put it this way. We owe our existence above all:

• To the universe, cosmic forces, as we would put it now, to Nature. The ground of our existence. To be repaid through ritual: ritual be¬ ing an act of respect and recognition to all that beside which we are small.57

• To those who have created the knowledge and cultural accom¬ plishments that we value most; that give our existence its form, its meaning, but also its shape. Here we would include not only the philosophers and scientists who created our intellectual tradition but everyone from William Shakespeare to that long-since-forgotten woman, somewhere in the Middle East, who created leavened bread. We repay them by becoming learned ourselves and contributing to human knowledge and human culture.

• To our parents, and their parents — our ancestors. We repay them by becoming ancestors.

• To humanity as a whole. We repay them by generosity to strang¬ ers, by maintaining that basic communistic ground of sociality that makes human relations, and hence life, possible.

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Set out this way, though, the argument begins to undermine its very premise. These are nothing like commercial debts. After all, one might repay one’s parents by having children, but one is not gener¬ ally thought to have repaid one’s creditors if one lends the cash to someone else.58

Myself, I wonder: Couldn’t that really be the point? Perhaps what the authors of the Brahmanas were really demonstrating was that, in the final analysis, our relation with the cosmos is ultimately nothing like a commercial transaction, nor could it be. That is because commercial transactions imply both equality and separation. These examples are all about overcoming separation: you are free from your debt to your ancestors when you become an ancestor; you are free from your debt to the sages when you become a sage, you are free from your debt to humanity when you act with humanity. All the more so if one is speak¬ ing of the universe. If you cannot bargain with the gods because they already have everything, then you certainly cannot bargain with the universe, because the universe is everything — and that everything neces¬ sarily includes yourself. One could in fact interpret this list as a subtle way of saying that the only way of “freeing oneself” from the debt was not literally repaying debts, but rather showing that these debts do not exist because one is not in fact separate to begin with, and hence that the very notion of canceling the debt, and achieving a separate, autonomous existence, was ridiculous from the start. Or even that the very presumption of positing oneself as separate from humanity or the cosmos, so much so that one can enter into one-to-one dealings with it, is itself the crime that can be answered only by death. Our guilt is not due to the fact that we cannot repay our debt to the universe. Our guilt is our presumption in thinking of ourselves as being in any sense an equivalent to Everything Else that Exists or Has Ever Existed, so as to be able to conceive of such a debt in the first place.’9

Or let us look at the other side of the equation. Even if it is pos¬ sible to imagine ourselves as standing in a position of absolute debt to the cosmos, or to humanity, the next question becomes: Who exactly has a right to speak for the cosmos, or humanity, to tell us how that debt must be repaid? If there’s anything more preposterous than claim¬ ing to stand apart from the entire universe so as to enter into negotia¬ tions with it, it is claiming to speak for the other side.

If one were looking for the ethos for an individualistic society such as our own, one way to do it might well be to say: we all owe an infinite debt to humanity, society, nature, or the cosmos (however one prefers to frame it), but no one else could possibly tell us how we are to pay it. This at least would be intellectually consistent. If so, it would actually

PRIMORDIAL DEBTS

69

be possible to see almost all systems of established authority — religion, morality, politics, economics, and the criminal-justice system — as so many different fraudulent ways to presume to calculate what cannot be calculated, to claim the authority to tell us how some aspect of that unlimited debt ought to be repaid. Human freedom would then be our ability to decide for ourselves how we want to do so.

No one, to my knowledge, has ever taken this approach. In¬ stead, theories of existential debt always end up becoming wa-ys of justifying — or laying claim to — structures of authority. The case of the Hindu intellectual tradition is telling here. The debt to humanity appears only in a few early texts, and is quickly forgotten. Almost all later Hindu commentators ignore it and instead put their emphasis on a man’s debt to his father.60

Primordial-debt theorists have other fish to fry. They are not really interested in the cosmos, but actually, in “society.”

Let me return again to that word, “society.” The reason that it seems like such a simple, self-evident concept is because we mostly use it as a synonym for “nation.” After all, when Americans speak of paying their debt to society, they are not thinking of their responsibili¬ ties to people who live in Sweden. It’s only the modern state, with its elaborate border controls and social policies, that enables us to imagine “society” in this way, as a single bounded entity. This is why project¬ ing that notion backwards into Vedic or Medieval times will always be deceptive, even though we don’t really have another word.

It seems to me that this is exactly what the primordial-debt theo¬ rists are doing: projecting such a notion backwards.

Really, the whole complex of ideas they are talking about — the notion that there is this thing called society, that we have a debt to it, that governments can speak for it, that it can be imagined as a sort of secular god — all of these ideas emerged together around the time of the French Revolution, or in its immediate wake. In other words, it was born alongside the idea of the modern nation-state.

We can already see them coming together clearly in the work of Auguste Comte, in early nineteenth-century France. Comte, a phi¬ losopher 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,

70

DEBT

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 “Positiv¬ ist 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 very 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”?61

While Comte doesn’t use the word “debt,” the sense is clear enough. We have already accumulated endless debts before we get to the age at which we can even think of paying them. By that time, there’s no way to calculate to whom we even owe them. The only way to redeem our¬ selves is to dedicate ourselves to the service of Humanity as a whole.

In his lifetime, Comte was considered something of a crackpot, but his ideas proved influential. His notion of unlimited obligations to so¬ ciety ultimately crystallized in the notion of the “social debt,” a notion taken up among social reformers and, eventually, socialist politicians in many parts of Europe and abroad.62 “We are all born as debtors to so¬ ciety”: in France the notion of a social debt soon became something of a catchphrase, a slogan, and eventually a cliche.63 The state, according to this view, was merely the administrator of an existential debt that all of us have to the society that created us, embodied not least in the fact that we all continue to be completely dependent on one another for our existence, even if we are not completely aware of how.

These are also the intellectual and political circles that shaped the thought of Emile Durkheim, the founder of the discipline of sociology that we know today, who in a way did Comte one better by arguing that all gods in all religions are always already projections of society — so an explicit religion of society would not even be necessary. All religions, for Durkheim, are simply ways of recognizing our mutual dependence on one another, a dependence that affects us in a million ways that we are never entirely aware of. “God” and “society” are ultimately the same.

PRIMORDIAL DEBTS

71

The problem is that for several hundred years now, it has simply been assumed that the guardian of that debt we owe for all of this, the legitimate representatives of that amorphous social totality that has al¬ lowed us to become individuals, must necessarily be the state. Almost all socialist or socialistic regimes end up appealing to some version of this argument. To take one notorious example, this was how the Soviet Union used to justify forbidding their citizens from emigrating to other countries. The argument was always: The USSR created these people, the USSR raised and educated them, made them who they are. What right do they have to take the product of our investment and transfer it to another country, as if they didn’t owe us anything? Neither is this rhetoric restricted to socialist regimes. Nationalists appeal to exactly the same kind of arguments — especially in times of war. And all mod¬ ern governments are nationalist to some degree.

One might even say that what we really have, in the idea of pri¬ mordial debt, is the ultimate nationalist myth. Once we owed our lives to the gods that created us, paid interest in the form of animal sacrifice, and ultimately paid back the principal with our lives. Now we owe it to the Nation that formed us, pay interest in the form of taxes, and when it comes time to defend the nation against its enemies, to offer to pay it with our lives.

This is a great trap of the twentieth century: on one side is the logic of the market, where we like to imagine we all start out as individuals who don’t owe each other anything. On the other is the logic of the state, where we all begin with a debt we can never truly pay. We are constantly told that they are opposites, and that between them they contain the only real human possibilities. But it’s a false dichotomy. States created markets. Markets require states. Neither could continue without the other, at least, in anything like the forms we would rec¬ ognize today.

Chapter Four

CRUELTY AND REDEMPTION

We will buy the poor for silver, the needy for a pair of sandals.

— Amos 2:6

THE 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. 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 entering into definite relations with other things.1

Clearly, money was not invented to overcome the inconveniences of barter between neighbors — since neighbors would have no reason to engage in barter in the first place. Still, a system of pure credit money would have serious inconveniences as well. Credit money is based on trust, and in competitive markets, trust itself becomes a scarce com¬ modity. This is particularly true of dealings between strangers. Within the Roman empire, a silver coin stamped with the image of Tiberius might have circulated at a value considerably higher than the value of the silver it contained. Ancient coins invariably circulated at a value higher than their metal content.2 This was largely because Tiberius’s government was willing to accept them at face value. However, the

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Persian government probably wasn’t, and the Mauryan and Chinese governments certainly weren’t. Very large numbers of Roman gold and silver coins did end up in India and even China; this is presumably the main reason that they were made of gold and silver to begin with.

What’s true for a vast empire like Rome or China is obviously all the more true for a Sumerian or Greek city-state, let alone anyone operating within the kind of broken checkerboard of kingdoms, towns, and tiny principalities that prevailed in most of Medieval Europe or India. As I’ve pointed out, often what was inside and what was out¬ side 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 en¬ tirely 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 hold¬ ing 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.

In a similar way, English shops, for many centuries, would issue their own wood or lead or leather token money. The practice was often technically illegal, but it continued until relatively recent times. Here is an example from the seventeenth century, by a certain Henry, who had a store at Stony Stratford, Buckinghamshire:

This is clearly a case of the same principle: Henry would provide small change in the form of IOUs redeemable at his own store. As such, they might circulate broadly, at least among anyone who did regular business at that shop. But they were unlikely to travel very far from Stony Stratford — most tokens, in fact, never circulated more than a few blocks in any direction. For larger transactions, everyone, including Henry, expected money in a form that would be acceptable anywhere, including in Italy or France.4

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Throughout most of history, even where we do find elaborate mar¬ kets, we also find a complex jumble of different sorts of currency. Some of these may have originally emerged from barter between for¬ eigners: 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 accept¬ able as currency. For instance: in much the same way that colonial Virginia planters managed to pass a law obliging shopkeepers to ac¬ cept 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, actually 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 com¬ modity and a debt-token. This is probably why coins — pieces of silver or gold that are already valuable commodities in themselves, but that, being stamped with the emblem of a local political authority, became even more valuable — still sit in our heads as the quintessential form of money. They most perfectly straddle the divide that defines what money is in the first place. What’s more, the relation between the two was a matter of constant political contestation.

In other words, the battle between state and market, between gov¬ ernments and merchants is not inherent to the human condition.

Our 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 com¬ mercial transactions that we’re capable of seeing our relation to the universe in terms of debt.

To illustrate, let me call a perhaps surprising witness, Friedrich Nietzsche, a man able to see with uncommon clarity what happens when you try to imagine the world in commercial terms.

Nietzsche’s On the Genealogy of Morals appeared in 1887. In it, he begins with an argument that might well have been taken directly from Adam Smith — but he takes it a step further than Smith ever dared to, insisting that not just barter, but buying and selling itself, precede any other form of human relationship. The feeling of personal obligation, he observes,

has its origin in the oldest and most primitive personal rela¬ tionship there is, in the relationship between seller and buyer, creditor and debtor. Here for the first time one person moved up against another person, here an individual measured himself against another individual. We have found no civilization still at such a low level that something of this relationship is not already perceptible. To set prices, to measure values, to think up equivalencies, to exchange things — that preoccupied man’s very first thinking to such a degree that in a certain sense it’s what thinking itself is. Here the oldest form of astuteness was bred; here, too, we can assume are the first beginnings of man’s pride, his feeling of pre-eminence in relation to other animals. Perhaps our word “man” ( manas ) continues to ex¬ press directly something of this feeling of the self: the human being describes himself as a being which assesses values, which values and measures, as the “inherently calculating animal.” Selling and buying, together with their psychological attributes, are even older than the beginnings of any form of social orga¬ nizations and groupings; out of the most rudimentary form of personal legal rights the budding feeling of exchange, contract, guilt, law, duty, and compensation was instead first transferred to the crudest and earliest social structures (in their relation¬ ships with similar social structures), along with the habit of comparing power with power, of measuring, of calculating.7

Smith, too, we will remember, saw the origins of language — and hence of human thought — as lying in our propensity to “exchange one thing for another,” in which he also saw the origins of the market.8 The urge to trade, to compare values, is the very thing that makes us intel¬ ligent beings, and different from other animals. Society comes later — which means our ideas about responsibilities to other people first take shape in strictly commercial terms.

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Unlike with Smith, however, it never occurred to Nietzsche that you could have a world where all such transactions immediately cancel out. Any system of commercial accounting, he assumed, will produce creditors and debtors. In fact, he believed that it was from this very fact that human morality emerged. Note, he says, how the German word schuld means both “debt” and “guilt.” At first, to be in debt was simply to be guilty, and creditors delighted in punishing debtors unable to repay their loans by inflicting “all sorts of humiliation and torture on the body of the debtor, for instance, cutting as much flesh off as seemed appropriate for the debt.”9 In fact, Nietzsche went so far as to insist that those original barbarian law codes that tabulated so much for a ruined eye, so much for a severed finger, were not originally meant to fix rates of monetary compensation for the loss of eyes and fingers, but to establish how much of the debtor’s body creditors were allowed to take! Needless to say, he doesn’t provide a scintilla of evi¬ dence for this (none exists).10 But to ask for evidence would be to miss the point. We are dealing here not with a real historical argument but with a purely imaginative exercise.

When humans did begin to form communities, Nietzsche contin¬ ues, they necessarily began to imagine their relationship to the com¬ munity 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). But this debt, he says, is also paid — here too — in sacrifice:

Within the original tribal cooperatives — we’re talking about primeval times — the living generation always acknowledged a legal obligation to the previous generations, and especially to the earliest one which had founded the tribe [ . . . ] Here the reigning conviction is that the tribe only exists at all only be¬ cause of the sacrifices and achievements of its ancestors — and that people have to pay them back with sacrifices and achieve¬ ments. In this people recognize a debt which keeps steadily growing because these ancestors in their continuing existence as powerful spirits do not stop giving the tribe new advantages and lending them their power. Do they do this for free? But there is no “for free” for those raw and “spiritually destitute” ages. What can people give back to them? Sacrifices (at first as nourishment understood very crudely), festivals, chapels, signs of honor, above all, obedience — for all customs, as work of one’s ancestors, are also their statutes and commands. Do peo¬ ple ever give them enough? This suspicion remains and grows.11

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In other words, for Nietzsche, starting from Adam Smith’s as¬ sumptions about human nature means we must necessarily end up with something very much along the lines of primordial-debt theory. On the one hand, it is because of our feeling of debt to the ancestors that we obey the ancestral laws: this is why we feel that the community has the right to react “like an angry creditor” and punish us for our transgres¬ sions if we break them. In a larger sense, we develop a creeping feeling that we could never really pay back the ancestors, that no sacrifice (not even the sacrifice of our first-born) will ever truly redeem us. We are terrified of the ancestors, and the stronger and more powerful a com¬ munity becomes, the more powerful they seem to be, until finally, “the ancestor is necessarily transfigured into a god.” As communities grow into kingdoms and kingdoms into universal empires, the gods them¬ selves come to seem more universal, they take on grander, more cosmic pretentions, ruling the heavens, casting thunderbolts — culminating in the Christian god, who, as the maximal deity, necessarily “brought about the maximum feeling of indebtedness on earth.” Even our ances¬ tor Adam is no longer figured as a creditor, but as a transgressor, and therefore a debtor, who passes on to us his burden of Original Sin:

Finally, with the impossibility of discharging the debt, people also come up with the notion that it is impossible to remove the penance, the idea that it cannot be paid off (“eternal pun¬ ishment”) . . . until all of a sudden we confront the paradoxi¬ cal and horrifying expedient with which a martyred humanity found temporary relief, that stroke of genius of Christianity :

God sacrificing himself for the guilt of human beings, God pay¬ ing himself back with himself, God as the only one who can re¬ deem man from what for human beings has become impossible to redeem — the creditor sacrificing himself for the debtor, out of love (can people believe that?), out of love for his debtor!12

It all makes perfect sense if you start from Nietzsche’s initial prem¬ ise. The problem is that the premise is insane.

There is also every reason to believe that Nietzsche knew the prem¬ ise was insane; in fact, that this was the entire point. What Nietzsche is doing here is starting out from the standard, common-sense assump¬ tions 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 con¬ flict. That is, he is starting out from ordinary bourgeois assumptions

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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 that. The best response to anyone who wants to take seriously Nietzsche’s fantasies about sav¬ age hunters chopping pieces off each other’s bodies for failure to remit are the words of an actual hunter-gatherer — an Inuit from Greenland made famous in the Danish writer Peter Freuchen’s Book of the Es¬ kimo. Freuchen tells how one day, after coming home hungry from an unsuccessful walrus-hunting expedition, he found one of the successful hunters dropping off several hundred pounds of meat. He thanked him profusely. The man objected indignantly:

“Up in our country we are human!” said the hunter. “And since we are human we help each other. We don’t like to hear anybody say thanks for that. What I get today you may get tomorrow. Up here we say that by gifts one makes slaves and by whips one makes dogs.”’3

The last line is something of an anthropological classic, and simi¬ lar statements about the refusal to calculate credits and debits can be found through the anthropological literature on egalitarian hunt¬ ing societies. Rather than seeing himself as human because he could make economic calculations, the hunter insisted that being truly hu¬ man meant refusing to make such calculations, refusing to measure or remember who had given what to whom, for the precise reason that doing so would inevitably create a world where we began “comparing power with power, measuring, calculating” and reducing each other to slaves or dogs through debt.

It’s not that he, like untold millions of similar egalitarian spirits throughout history, was unaware that humans have a propensity to calculate. If he wasn’t aware of it, he could not have said what he did. Of course we have a propensity to calculate. We have all sorts of propensities. In any real-life situation, we have propensities that drive us in several different contradictory directions simultaneously. No one is more real than any other. The real question is which we take as the foundation of our humanity, and therefore, make the basis of our civilization. If Nietzsche’s analysis of debt is helpful to us, then, it is because it reveals that when we start from the assumption that human thought is essentially a matter of commercial calculation, that buying and selling are the basis of human society — then, yes, once we begin

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to think about our relationship with the cosmos, we will necessarily conceive of it in terms of debt.

I I I I I

I do think Nietzsche helps us in another way as well: to understand the concept of redemption. Niezsche’s account of “primeval times” might be absurd, but his description of Christianity — of how a sense of debt is transformed into an abiding sense of guilt, and guilt to self-loathing, and self-loathing to self-torture — all of this does ring very true.

Why, for instance, do we refer to Christ as the “redeemer”? The primary meaning of “redemption” is to buy something back, or to recover something that had been given up in security for a loan; to ac¬ quire something by paying off a debt. It is rather striking to think that the very core of the Christian message, salvation itself, the sacrifice of God’s own son to rescue humanity from eternal damnation, should be framed in the language of a financial transaction.

Nietzsche might have been starting from the same assumptions as Adam Smith, but clearly the early Christians weren’t. The roots of this thinking lie deeper than Smith’s with his nation of shopkeepers. The authors of the Brahmanas were not alone in borrowing the language of the marketplace as a way of thinking about the human condition. Indeed, to one degree or another, all the major world religions do this.

The reason is that all of them — from Zoroastrianism to Islam — arose amidst intense arguments about the role of money and the mar¬ ket in human life, and particularly about what these institutions meant for fundamental questions of what human beings owed to one another. The question of debt, and arguments about debt, ran through every aspect of the political life of the time. These arguments were set amidst revolts, petitions, reformist movements. Some such movements gained allies in the temples and palaces. Others were brutally suppressed. Most of the terms, slogans, and specific issues being debated, though, have been lost to history. We just don’t know what a political debate in a Syrian tavern in 750 BC was likely to be about. As a result, we have spent thousands of years contemplating sacred texts full of political allusions that would have been instantly recognizable to any reader at the time when they were written, but whose meaning we now can only guess at.14

One of the unusual things about the Bible is that it preserves some bits of this larger context. To return to the notion of redemption: the Hebrew words padah and goal, both translated as “redemption,” could be used for buying back anything one had sold to someone else,

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particularly the recovery of ancestral land, or to recovering some ob¬ ject held by creditors in way of a pledge.15 The example foremost in the minds of prophets and theologians seems to have been the last: the redemption of pledges, and especially, of family members held as debt- pawns. It would seem that the economy of the Hebrew kingdoms, by the time of the prophets, was already beginning to develop the same kind of debt crises that had long been common in Mesopotamia: espe¬ cially in years of bad harvests, the poor became indebted to rich neigh¬ bors or to wealthy moneylenders in the towns, they would begin to lose title to their fields and to become tenants on what had been their own land, and their sons and daughters would be removed to serve as servants in their creditors’ households, or even sold abroad as slaves.16 The earlier prophets contain allusions to such crises, but the book of Nehemiah, written in Persian times, is the most explicit:17

Some also there were that said, “We have mortgaged our lands, vineyards, and houses, that we might buy corn, because of the dearth.”

There were also those that said, “We have borrowed money for the king’s tribute, and that upon our lands and vineyards.

“Yet now our flesh is as the flesh of our brethren, our chil¬ dren as their children: and, lo, we bring into bondage our sons and our daughters to be servants, and some of our daughters are brought unto bondage already: neither is it in our power to redeem them; for other men have our lands and vineyards.”

And I was very angry when I heard their cry and these words.

Then I consulted with myself, and I rebuked the nobles, and the rulers, and said unto them, “Ye exact usury, every one of his brother.” And I set a great assembly against them.18

Nehemiah was a Jew born in Babylon, a former cup-bearer to the Persian emperor. In 444 bc, he managed to talk the Great King into appointing him governor of his native Judaea. He also received per¬ mission to rebuild the Temple in Jerusalem that had been destroyed by Nebuchadnezzar more than two centuries earlier. In the course of rebuilding, sacred texts were recovered and restored; in a sense, this was the moment of the creation of what we now consider Judaism.

The problem was that Nehemiah quickly found himself confronted with a social crisis. All around him, impoverished peasants were un¬ able to pay their taxes; creditors were carrying off the children of the poor. His first response was to issue a classic Babylonian-style “clean

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slate” edict — having himself been born in Babylon, he was clearly fa¬ miliar with the general principle. All non-commercial debts were to be forgiven. Maximum interest rates were set. At the same time, though, Nehemiah managed to locate, revise, and reissue much older Jewish laws, now preserved in Exodus, Deuteronomy, and Leviticus, which in certain ways went even further, by institutionalizing the principle.19 The most famous of these is the Law of Jubilee: a law that stipulated that all debts would be automatically cancelled “in the Sabbath year” (that is, after seven years had passed), and that all who languished in bondage owing to such debts would be released.20

“Freedom,” in the Bible, as in Mesopotamia, came to refer above all to release from the effects of debt. Over time, the history of the Jew¬ ish people itself came to be interpreted in this light: the liberation from bondage in Egypt was God’s first, paradigmatic act of redemption; the historical tribulations of the Jews (defeat, conquest, exile) were seen as misfortunes that would eventually lead to a final redemption with the coming of the Messiah — though this could only be accomplished, prophets such as Jeremiah warned them, after the Jewish people truly repented of their sins (carrying each other off into bondage, whoring after false gods, the violation of commandments).21 In this light, the adoption of the term by Christians is hardly surprising. Redemption was a release from one’s burden of sin and guilt, and the end of history would be that moment when all slates are wiped clean and all debts finally lifted when a great blast from angelic trumpets will announce the final Jubilee.

If so, “redemption” is no longer about buying something back. It’s really more a matter of destroying the entire system of account¬ ing. In many Middle Eastern cities, this was literally true: one of the common acts during debt cancelation was the ceremonial destruction of the tablets on which financial records had been kept, an act to be repeated, much less officially, in just about every major peasant revolt in history.22

This leads to another problem: What is possible in the meantime, before that final redemption comes? In one of his more disturbing parables, the Parable of the Unforgiving Servant, Jesus seemed to be explicitly playing with the problem:

Therefore, the kingdom of heaven is like a king who wanted to settle accounts with his servants. As he began the settlement, a man who owed him ten thousand talents was brought to him.

Since he was not able to pay, the master ordered that he and

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his wife and his children and all that he had be sold to repay the debt.

The servant fell on his knees before him. “Be patient with me,” he begged, “and I will pay back everything.” The servant’s master took pity on him, canceled the debt, and let him go.

But when that servant went out, he found one of his fellow servants who owed him a hundred denarii. He grabbed him and began to choke him. “Pay back what you owe me!” he demanded.

His fellow servant fell to his knees and begged him, “Be patient with me, and I will pay you back.”

But he refused. Instead, he went off and had the man thrown into prison until he could pay the debt. When the other ser¬ vants saw what had happened, they were greatly distressed and went and told their master everything that had happened.

Then the master called the servant in. “You wicked ser¬ vant,” he said, “I canceled all that debt of yours because you begged me to. Shouldn’t you have had mercy on your fellow servant just as I had on you?” In anger his master turned him over to the jailers to be tortured, until he should pay back all he owed.23

This is quite an extraordinary text. On one level it’s a joke; in oth¬ ers, it could hardly be more serious.

We begin with the king wishing to “settle accounts” with his ser¬ vants. The premise is absurd. Kings, like gods, can’t really enter into relations of exchange with their subjects, since no parity is possible. And this is a king who clearly is God. Certainly there can be no final settling of accounts.

So at best we are dealing with an act of whimsy on the king’s part. The absurdity of the premise is hammered home by the sum the first man brought before him is said to owe. In ancient Judaea, to say some¬ one owes a creditor “ten thousand talents” would be like now saying someone owes “a hundred billion dollars.” The number is a joke, too; it simply stands in for “a sum no human being could ever, conceivably, repay.”24

Faced with infinite, existential debt, the servant can only tell obvi¬ ous lies: “a hundred billion? Sure, I’m good for it! Just give me a little more time.” Then, suddenly, apparently just as arbitrarily, the Lord forgives him.

Yet, it turns out, the amnesty has a condition he is not aware of. It is incumbent on his being willing to act in an analogous way to other

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humans — in this particular case, another servant who owes him (to translate again into contemporary terms), maybe a thousand bucks. Failing the test, the human is cast into hell for all eternity, or “until he should pay back all he owed,” which in this case comes down to the same thing.

The parable has long been a challenge to theologians. It’s normally interpreted as a comment on the endless bounty of God’s grace and how little He demands of us in comparison — and thus, by implication, as a way of suggesting that torturing us in hell for all eternity is not as unreasonable as it might seem. Certainly, the unforgiving servant is a genuinely odious character. Still, what is even more striking to me is the tacit suggestion that forgiveness, in this world, is ultimately im¬ possible. Christians practically say as much every time they recite the Lord’s Prayer, and ask God to “forgive us our debts, as we also forgive our debtors.”25 It repeats the story of the parable almost exactly, and the implications are similarly dire. After all, most Christians reciting the prayer are aware that they do not generally forgive their debtors. Why then should God forgive them their sins?26

What’s more, there is the lingering suggestion that we really couldn’t live up to those standards, even if we tried. One of the things that makes the Jesus of the New Testament such a tantalizing character is that it’s never clear what he’s telling us. Everything can be read two ways. When he calls on his followers to forgive all debts, refuse to cast the first stone, turn the other cheek, love their enemies, to hand over their possessions to the poor — is he really expecting them to do this? Or are such demands just a way of throwing in their faces that, since we are clearly not prepared to act this way, we are all sinners whose salvation can only come in another world — a position that can be (and has been) used to justify almost anything? This is a vision of human life as inherently corrupt, but it also frames even spiritual affairs in com¬ mercial terms: with calculations of sin, penance, and absolution, the Devil and St. Peter with their rival ledger books, usually accompanied by the creeping feeling that it’s all a charade because the very fact that we are reduced to playing such a game of tabulating sins reveals us to be fundamentally unworthy of forgiveness.

World religions, as we shall see, are full of this kind of ambiva¬ lence. On the one hand they are outcries against the market; on the other, they tend to frame their objections in commercial terms — as if to argue that turning human life into a series of transactions is not a very good deal. What I think even these few examples reveal, though, is how much is being papered over in the conventional accounts of the origins and history of money. There is something almost touchingly

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naive in the stories about neighbors swapping potatoes for an extra pair of shoes. When the ancients thought about money, friendly swaps were hardly the first thing that came to mind.

True, some might have thought about their tab at the local ale¬ house, or, if they were a merchant or administrator, of storehouses, account books, exotic imported delights. For most, though, what was likely to come to mind was the selling of slaves and ransoming of pris¬ oners, corrupt tax-farmers and the depredations of conquering armies, mortgages and interest, theft and extortion, revenge and punishment, and, above all, the tension between the need for money to create fami¬ lies, to acquire a bride so as to have children, and use of that same money to destroy families — to create debts that lead to the same wife and children being taken away. “Some of our daughters are brought unto bondage already: neither is it in our power to redeem them.” One can only imagine what those words meant, emotionally, to a father in a patriarchal society in which a man’s ability to protect the honor of his family was everything. Yet this is what money meant to the ma¬ jority of people for most of human history: the terrifying prospect of one’s sons and daughters being carried off to the homes of repulsive strangers to clean their pots and provide the occasional sexual services, to be subject to every conceivable form of violence and abuse, pos¬ sibly for years, conceivably forever, as their parents waited, helpless, avoiding eye contact with their neighbors, who knew exactly what was happening to those they were supposed to have been able to protect.27 Clearly this was the worst thing that could happen to anyone — which is why, in the parable, it could be treated as interchangeable with be¬ ing “turned over to the jailors to be tortured” for life. And that’s just from the perspective of the father. One can only imagine how it might have felt to be the daughter. Yet, over the course of human history, untold millions of daughters have known (and in fact many still know) exactly what it’s like.

One might object that this was just assumed to be in the nature of things: like the imposition of tribute on conquered populations, it might have been resented, but it wasn’t considered a moral issue, a matter of right and wrong. Some things just happen. This has been the most common attitude of peasants to such phenomena throughout hu¬ man history. What’s striking about the historical record is that in the case of debt crises, this was not how many reacted. Many actually did become indignant. So many, in fact, that most of our contemporary language of social justice, our way of speaking of human bondage and emancipation, continues to echo ancient arguments about debt.

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It’s particularly striking because so many other things do seem to have been accepted as simply in the nature of things. One does not see a similar outcry against caste systems, for example, or for that matter, the institution of slavery.28 Surely slaves and untouchables often experi¬ enced at least equal horrors. No doubt many protested their condition. Why was it that the debtors’ protests seemed to carry such greater moral weight? Why were debtors so much more effective in winning the ear of priests, prophets, officials, and social reformers? Why was it that officials like Nehemiah were willing to give such sympathetic con¬ sideration to their complaints, to inveigh, to summon great assemblies?

Some have suggested practical reasons: debt crises destroyed the free peasantry, and it was free peasants who were drafted into ancient armies to fight in wars.29 No doubt this was a factor; clearly it wasn’t the only one. There is no reason to believe that Nehemiah, for instance, in his anger at the usurers, was primarily concerned with his ability to levy troops for the Persian king. It is something more fundamental.

What makes debt different is that it is premised on an assumption of equality.

To be a slave, or lower-caste, is to be intrinsically inferior. We are dealing with relations of unadulterated hierarchy. In the case of debt, we are dealing with two individuals who begin as equal parties to a contract. Legally, at least as far as the contract is concerned, they are the same.

We can add that, in the ancient world, when people who actually were more or less social equals loaned money to one another, the terms appear to have normally been quite generous. Often no interest was charged, or if it was, it was very low. “And don’t charge me interest,” wrote one wealthy Canaanite to another, in a tablet dated around 1200 bc, “after all, we are both gentlemen.”30 Between close kin, many “loans” were probably, then as now, just gifts that no one seriously expected to recover. Loans between rich and poor were something else again.

The problem was that, unlike status distinctions like caste or slav¬ ery, the line between rich and poor was never precisely drawn. One can imagine the reaction of a farmer who went up to the house of a wealthy cousin, on the assumption that “humans help each other,” and ended up, a year or two later, watching his vineyard seized and his sons and daughters led away. Such behavior could be justified, in legal terms, by insisting that the loan was not a form of mutual aid but a commercial relationship — a contract is a contract. (It also required a certain reli¬ able access to superior force.) But it could only have felt like a terrible betrayal. What’s more, framing it as a breach of contract meant stating

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that this was, in fact, a moral issue: these two parties ought to be equals, but one had failed to honor the bargain. Psychologically, this can only have made the indignity of the debtor’s condition all the more painful, since it made it possible to say that it was his own turpitude that sealed his daughter’s fate. But that just made the motive all the more compelling to throw back the moral aspersions: “Our flesh is as the flesh of our brethren, our children as their children.” We are all the same people. We have a responsibility to take account of one another’s needs and interests. How then could my brother do this to me?

In the Old Testament case, debtors were able to marshal a particu¬ larly powerful moral argument — as the authors of Deuteronomy con¬ stantly reminded their readers, were not the Jews all slaves in Egypt, and had they not all been redeemed by God? Was it right, when they had all been given this promised land to share, for some to take that land away from others? Was it right for a population of liberated slaves to go about enslaving one aother’s children?31 But analogous arguments were being made in similar situations almost everywhere in the ancient world: in Athens, in Rome, and for that matter, in China — where leg¬ end had it that coinage itself was first invented by an ancient emperor to redeem the children of families who had been forced to sell them after a series of devastating floods.

Through most of history, when overt political conflict between classes did appear, it took the form of pleas for debt cancellation — the freeing of those in bondage, and usually, a more just reallocation of the land. What we see, in the Bible and other religious traditions, are traces of the moral arguments by which such claims were justified, usu¬ ally subject to all sorts of imaginative twists and turns, but inevitably, to some degree, incorporating the language of the marketplace itself.

Chapter Five

A BRIEF TREATISE ON THE MORAL GROUNDS OF ECONOMIC RELATIONS

TO TELL THE HISTORY of debt, then, is also necessarily to recon¬ struct how the language of the marketplace has come to pervade every aspect of human life — even to provide the terminology for the moral and religious voices ostensibly raised against it. We have already seen how both Vedic and Christian teachings thus end up making the same curious move: first describing all morality as debt, but then, in their very manner of doing so, demonstrating that morality cannot really be reduced to debt, that it must be grounded in something else.1

But what? Religious traditions prefer vast, cosmological answers: the alternative to the morality of debt lies in recognition of continu¬ ity with the universe, or life in the expectation of the imminent an¬ nihilation of the universe, or absolute subordination to the deity, or withdrawal into another world. My own aims are more modest, so I will take the opposite approach. If we really want to understand the moral grounds of economic life, and by extension, human life, it seems to me that we must start instead with the very small things: the every¬ day details of social existence, the way we treat our friends, enemies, and children — often with gestures so tiny (passing the salt, bumming a cigarette) that we ordinarily never stop to think about them at all. Anthropology has shown us just how different and numerous are the ways in which humans have been known to organize themselves. But it also reveals some remarkable commonalities — fundamental moral principles that appear to exist everywhere, and that will always tend to be invoked, wherever people transfer objects back and forth or argue about what other people owe them.

One of the reasons that human life is so complicated, in turn, is because many of these principles contradict one another. As we will see, they are constantly pulling us in radically different directions. The moral logic of exchange, and hence of debt, is only one; in any given situation, there are likely to be completely different principles that

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could be brought to bear. In this sense, the moral confusion discussed in the first chapter is hardly new; in a sense, moral thought is founded on this very tension.

I I I I I

To really understand what debt is, then, it will be necessary to un¬ derstand how it’s different from other sorts of obligation that human beings might have to one another — which, in turn, means mapping out what those other sorts of obligation actually are. Doing so, how¬ ever, poses peculiar challenges. Contemporary social theory — economic anthropology included — offers surprisingly little help in this regard. There’s an enormous anthropological literature on gifts, for instance, starting with the French anthropologist Marcel Mauss’s essay of 1925, even on “gift economies” that operate on completely different prin¬ ciples than market economies — but in the end, almost all this literature concentrates on the exchange of gifts, assuming that whenever one gives a gift, this act incurs a debt, and the recipient must eventually reciprocate in kind. Much as in the case of the great religions, the logic of the marketplace has insinuated itself even into the thinking of those who are most explicitly opposed to it. As a result, I am going to have to start over here, to create a new theory, pretty much from scratch.

Part of the problem is the extraordinary place that economics cur¬ rently holds in the social sciences. In many ways it is treated as a kind of master discipline. Just about anyone who runs anything important in America is expected to have some training in economic theory, or at least to be familiar with its basic tenets. As a result, those tenets have come to be treated as received wisdom, as basically beyond question (one knows one is in the presence of received wisdom when, if one challenges it, the first reaction is to treat one as simply ignorant — “You obviously have never heard of the Laffer Curve”; “Clearly you need a course in Economics 101” — the theory is seen as so obviously true that no one who understands it could possibly disagree.) What’s more, those branches of social theory that make the greatest claims to “scientific status” — “rational choice theory,” for instance — start from the same assumptions about human psychology that economists do: that human beings are best viewed as self-interested actors calculating how to get the best terms possible out of any situation, the most profit or pleasure or happiness for the least sacrifice or investment — curious, considering experimental psychologists have demonstrated over and over again that these assumptions simply aren’t true.2

THE MORAL GROUNDS OF ECONOMIC RELATIONS

91

From early on, there were those who wished to create a theo¬ ry of social interaction grounded in a more generous view of human nature — insisting that moral life comes down to something more than mutual advantage, that it is motivated above all by a sense of justice. The key term here became “reciprocity,” the sense of equity, balance, fairness, and symmetry, embodied in our image of justice as a set of scales. Economic transactions were just one variant of the principle of balanced exchange — and one that had a notorious tendency to go awry. But if one examines matters closely, one finds that all human relations are based on some variation on reciprocity.

In the 1950s, ’60s and ’70s, there was something of a craze for this sort of thing, in the guise of what was then called “exchange theory,” developed in infinite variations, from George Homans’ “Social Ex¬ change Theory” in the United States to Claude Levi-Strauss’s Structur¬ alism in France. Levi-Strauss, who became a kind of intellectual god in anthropology, made the extraordinary argument that human life could be imagined as consisting of three spheres: language (which consisted of the exchange of words), kinship (which consisted of the exchange of women), and economics (which consisted of the exchange of things). All three, he insisted, were governed by the same fundamental law of reciprocity.3

Levi-Strauss’s star is fallen now, and such extreme statements seem, in retrospect, a little bit ridiculous. Still, it’s not as if anyone has pro¬ posed a bold new theory to replace all this. Instead, the assumptions have simply retreated into the background. Almost 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 bal¬ ance has not yet been restored.

But can all justice really be reduced to reciprocity? It’s easy enough to come up with forms of reciprocity that don’t seem particularly just. “Do unto others as you would wish others to do unto you” might seem like an excellent foundation for a system of ethics, but for most of us, “an eye for an eye” does not evoke justice so much as vindictive brutal¬ ity.4 “One good turn deserves another” is a pleasant sentiment, but “I’ll scratch your back, you scratch mine” is shorthand for political corrup¬ tion. Conversely, there are relationships that seem clearly moral but appear to have nothing to do with reciprocity. The relation between mother and child is an oft-cited example. Most of us learn our sense of justice and morality first from our parents. Yet it is extremely difficult to see the relation between parent and child as particularly reciprocal.

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Would we really be willing to conclude that therefore it is not a moral relationship? That it has nothing to do with justice?

The Canadian novelist Margaret Atwood begins a recent book on debt with a similar paradox:

Nature Writer Ernest Thompson Seton had an odd bill pre¬ sented to him on his twenty-first birthday. It was a record kept by his father of all the expenses connected with young Ernest’s childhood and youth, including the fee charged by the doctor for delivering him. Even more oddly, Ernest is said to have paid it. I used to think that Mr. Seton Senior was a jerk, but now I’m wondering.5

Most of us wouldn’t wonder much. Such behavior seems mon¬ strous, inhuman. Certainly Seton did: he paid the bill, but never spoke to his father again afterward.6 And in a way, this is precisely why the presentation of such a bill seems so outrageous. Squaring accounts means that the two parties have the ability to walk away from each other. By presenting it, his father suggested he’d just as soon have noth¬ ing further to do with him.

In other words, while most of us can imagine what we owe to our parents as a kind of debt, few of us can imagine being able to actually pay it — or even that such a debt ever should be paid. Yet if it can’t be paid, in what sense is it a “debt” at all? And if it is not a debt, what is it?

One obvious place to look for alternatives is in cases of human inter¬ action in which expectations of reciprocity seem to slam into a wall. Nineteenth-century travelers’ accounts, for instance, are full of this sort of thing. Missionaries working in certain parts of Africa would often be astounded by the reactions they would receive when they adminis¬ tered medicines. Here’s a typical example, from a British missionary in Congo:

A day or two after we reached Vana we found one of the na¬ tives very ill with pneumonia. Comber treated him and kept him alive on strong fowl-soup; a great deal of careful nursing and attention was visited on him, for his house was beside the camp. When we were ready to go on our way again, the man was well. To our astonishment he came and asked us for a

THE MORAL GROUNDS OF ECONOMIC RELATIONS

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present, and was as astonished and disgusted as he had made us to be, when we declined giving it. We suggested that it was his place to bring us a present and to show some gratitude.

He said to us, “Well indeed! You white men have no shame!”7

In the early decades of the twentieth century, the French philoso¬ pher Lucien Levy-Bruhl, in an attempt to prove that “natives” oper¬ ated with an entirely different form of logic, compiled a list of similar stories: for instance, of a man saved from drowning who proceeded to ask his rescuer to give him some nice clothes to wear, or another who, on being nursed back to health after having been savaged by a tiger, demanded a knife. One French missionary working in Central Africa insisted that such things happened to him on a regular basis:

You save a person’s life, and you must expect to receive a visit from him before long; you are now under an obligation to him, and you will not get rid of him except by giving him presents.8

Now, certainly, there is almost always felt to be something ex¬ traordinary about saving a life. Anything surrounding birth and death almost cannot help but partake of the infinite, and, therefore, throw all everyday means of moral calculation askew. This is probably why stories like this had become something of a cliche in America when I was growing up. I remember as a child several times being told that among the Inuit (or sometimes it was among Buddhists, or Chinese, but curiously, never Africans) — that if one saves someone else’s life, one is considered responsible for taking care of that person forever. It defies our sense of reciprocity. But somehow, it also makes a weird kind of sense.

We have no way of knowing what was really going on in the minds of the patients in these stories, since we don’t know who they were or what sort of expectations they had (how they normally interacted with their doctors, for example). But we can guess. Let’s try a thought experiment. Imagine that we are dealing with a place where, if one man saved another’s life, the two became like brothers. Each was now expected to share everything, and to provide for the other when he was in need. If so, the patient would surely notice that his new brother appeared to be extraordinarily wealthy, not in much need of anything, but that he, the patient, was lacking in many things the missionary could provide.

Alternately (and more likely), imagine that we are dealing not with a relationship of radical equality but the very opposite. In many parts

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of Africa, accomplished curers were also important political figures with extensive clienteles of former patients. A would-be follower thus arrives to declare his political allegiance. What complicates the matter in this case is that followers of great men, in this part of Africa, were in a relatively strong bargaining position. Good henchmen were hard to come by; important people were expected to be generous with fol¬ lowers to keep them from joining some rival’s entourage instead. If so, asking for a shirt or knife would be a way of asking for confirmation that the missionary does wish to have the man as a follower. Paying him back, in contrast, would be, like Seton’s gesture to his father, an insult: a way of saying that despite the missionary having saved his life, he would just as soon have nothing further to do with him.

This is a thought experiment — because we don’t really know what the African patients were thinking. The point is that such forms of radical equality and radical inequality do exist in the world, that each carries within it its own kind of morality, its own way of thinking and arguing about the rights and wrongs of any given situation, and these morali¬ ties are entirely different than that of tit-for-tat exchange. In the rest of the chapter, I will provide a rough-and-ready way to map out the main possibilities, by proposing that there are three main moral principles on which economic relations can be founded, all of which occur in any human society, and which I will call communism, hierarchy, and exchange.

Communism

I will define communism here as any human relationship that operates on the principles of “from each according to their abilities, to each ac¬ cording to their needs.”

I admit that the usage here is a bit provocative. “Communism” is a word that can evoke strong emotional reactions — mainly, of course, because we tend to identify it with “communist” regimes. This is iron¬ ic, since the Communist parties that ruled over the USSR and its sat¬ ellites, and that still rule China and Cuba, never described their own systems as “communist.” They described them as “socialist.” “Com¬ munism” was always a distant, somewhat fuzzy utopian ideal, usually

THE MORAL GROUNDS OF ECONOMIC RELATIONS

95

to be accompanied by the withering away of the state — to be achieved at some point in the distant future.

Our thinking about communism has been dominated by a myth. Once upon a time, humans held all things in common — in the Gar¬ den of Eden, during the Golden Age of Saturn, in Paleolithic hunter- gatherer bands. Then came the Fall, as a result of which we are now cursed with divisions of power and private property. The dream was that someday, with the advance of technology and general prosperity, with social revolution or the guidance of the Party, we would finally be in a position to put things back, to restore common ownership and common management of collective resources. Throughout the last two centuries. Communists and anti-Communists argued over how plau¬ sible this picture was and whether it would be a blessing or a night¬ mare. But they all agreed on the basic framework: communism was about collective property, “primitive communism” did once exist in the distant past, and someday it might return.

We might call this “mythic communism” — or even, “epic communism” — a story we like to tell ourselves. Since the days of the French Revolution, it has inspired millions; but it has also done enor¬ mous damage to humanity. It’s high time, I think, to brush the entire argument aside. In fact, “communism” is not some magical utopia, and neither does it have anything to do with ownership of the means of production. It is something that exists right now — that exists, to some degree, in any human society, although there has never been one in which everything has been organized in that way, and it would be difficult to imagine how there could be. All of us act like communists a good deal of the time. None of us acts like a communist consistently. “Communist society” — in the sense of a society organized exclusively on that single principle — could never exist. But all social systems, even economic systems like capitalism, have always been built on top of a bedrock of actually-existing communism.

Starting, as I say, from the principle of “from each according to their abilities, to each according to their needs” allows us to look past the question of individual or private ownership (which is often little more than formal legality anyway) and at much more immediate and practical questions of who has access to what sorts of things and under what conditions.9 Whenever it is the operative principle, even if it’s just two people who are interacting, we can say we are in the presence of a sort of communism.

Almost everyone follows this principle if they are collaborating on some common project.10 If someone fixing a broken water pipe says, “Hand me the wrench,” his co-worker will not, generally speaking,

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say, “And what do I get for it?” — even if they are working for Exxon¬ Mobil, Burger King, or Goldman Sachs. The reason is simple efficiency (ironically enough, considering the conventional wisdom that “com¬ munism just doesn’t work”): if you really care about getting something done, the most efficient way to go about it is obviously to allocate tasks by ability and give people whatever they need to do them.11 One might even say that it’s one of the scandals of capitalism that most capital¬ ist firms, internally, operate communistically. True, they don’t tend to operate very democratically. Most often they are organized around military-style top-down chains of command. But there is often an in¬ teresting tension here, because top-down chains of command are not particularly efficient: they tend to promote stupidity among those on top, resentful foot-dragging among those on the bottom. The greater the need to improvise, the more democratic the cooperation tends to become. Inventors have always understood this, start-up capitalists fre¬ quently figure it out, and computer engineers have recently rediscov¬ ered the principle: not only with things like freeware, which everyone talks about, but even in the organization of their businesses. Apple Computers is a famous example: it was founded by (mostly Republi¬ can) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other’s garages.

This is presumably also why in the immediate wake of great di¬ sasters — a flood, a blackout, or an economic collapse — people tend to behave the same way, reverting to a rough-and-ready communism. However briefly, hierarchies and markets and the like become luxuries that no one can afford. Anyone who has lived through such a moment can speak to their peculiar qualities, the way that strangers become sisters and brothers and human society itself seems to be reborn. This is important, because it shows that we are not simply talking about cooperation. In fact, communism is the foundation of all human socia¬ bility. It is what makes society possible. There is always an assumption that anyone who is not actually an enemy can be expected on the prin¬ ciple of “from each according to their abilities,” at least to an extent: for example, if one needs to figure out how to get somewhere, and the other knows the way.

We so take this for granted, in fact, that the exceptions are them¬ selves revealing. E.E. Evans-Pritchard, an anthropologist who in the 192.0s carried out research among the Nuer, Nilotic pastoralists in southern Sudan, reports his discomfiture when he realized that some¬ one had intentionally given him wrong directions:

THE MORAL GROUNDS OF ECONOMIC RELATIONS 97

On one occasion I asked the way to a certain place and was deliberately deceived. I returned in chagrin to camp and asked the people why they had told me the wrong way. One of them replied, “You are a foreigner, why should we tell you the right way? Even if a Nuer who was a stranger asked us the way we would say to him, ‘You continue straight along that path,’ but we would not tell him that the path forked. Why should we tell him? But you are now a member of our camp and you are kind to our children, so we will tell you the right way in future.”12

The Nuer are constantly engaged in feuds; any stranger might well turn out to be an enemy there to scout out a good place for an am¬ bush, and it would be unwise to give such a person useful information. What’s more, Evans-Pritchard’s own situation was obviously relevant, since he was an agent of the British government — the same government that had recently sent in the RAF to strafe and bomb the inhabitants of this very settlement before forcibly resettling them there. Under the circumstances, the inhabitants’ treatment of Evans-Pritchard seems quite generous. The main point, though, is that it requires something on this scale — an immediate threat to life and limb, terror-bombing of civilian populations — before people will ordinarily consider not giving a stranger accurate directions.1’

It’s not just directions. Conversation is a domain particularly dis¬ posed to communism. Lies, insults, put-downs, and other sorts of ver¬ bal aggression are important — but they derive most of their power from the shared assumption that people do not ordinarily act this way: an insult does not sting unless one assumes that others will normally be considerate of one’s feelings, and it’s impossible to lie to someone who does not assume you would ordinarily tell the truth. When we genuinely wish to break off amicable relations with someone, we stop speaking to them entirely.

The same goes for small courtesies like asking for a light, or even for a cigarette. It seems more legitimate to ask a stranger for a cigarette than for an equivalent amount of cash, or even food; in fact, if one has been identified as a fellow smoker, it’s rather difficult to refuse such a request. In such cases — a match, a piece of information, holding the elevator — one might say the “from each” element is so minimal that most of us comply without even thinking about it. Conversely, the same is true if another person’s need — even a stranger’s — is particular¬ ly spectacular or extreme: if he is drowning, for example. If a child has fallen onto the subway tracks, we assume that anyone who is capable of helping her up will do so.

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I will call this “baseline communism”: the understanding that, unless people consider themselves enemies, if the need is considered great enough, or the cost considered reasonable enough, the principle of “from each according to their abilities, to each according to their needs” will be assumed to apply. Of course, different communities ap¬ ply very different standards. In large, impersonal urban communities, such a standard may go no further than asking for a light or directions. This might not seem like much, but it founds the possibility of larger social relations. In smaller, less impersonal communities — especially those not divided into social classes — the same logic will likely extend much further: for example, it is often effectively impossible to refuse a request not just for tobacco, but for food — sometimes even from a stranger; certainly from anyone considered to belong to the com¬ munity. Exactly one page after describing his difficulties in asking for directions, Evans-Pritchard notes that these same Nuer find it almost impossible, when dealing with someone they have accepted as a mem¬ ber of their camp, to refuse a request for almost any item of common consumption, so that a man or woman known to have anything extra in the way of grain, tobacco, tools, or agricultural implements can be expected to see their stockpiles disappear almost immediately.14 How¬ ever, this baseline of openhanded sharing and generosity never extends to everything. Often, in fact, things freely shared are treated as trivial and unimportant for that very reason. Among the Nuer, true wealth takes the form of cattle. No one would freely share their cattle; in fact, young Nuer men learn that they are expected to defend their cattle with their lives; for this reason, cattle are neither bought nor sold.

The obligation to share food, and whatever else is considered a ba¬ sic necessity, tends to become the basis of everyday morality in a society whose members see themselves as equals. Another anthropologist, Au¬ drey Richards, once described how Bemba mothers, “such lax discipli¬ narians in everything else,” will scold their children harshly if they give one an orange or some other treat and the child does not immediately offer to share it with her friends.15 But sharing is also, in such societies- — in any, if we really think about it — a major focus of life’s pleasures. As a result, the need to share is particularly acute in both the best of times and the worst of times: during famines, for example, but also during moments of extreme plenty. Early missionary accounts of native North Americans almost invariably include awestruck remarks on gen¬ erosity in times of famine, often to total strangers.16 At the same time,

On returning from their fishing, their hunting, and their trading, they exchange many gifts; if they have thus obtained something

THE MORAL GROUNDS OF ECONOMIC RELATIONS

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unusually good, even if they have bought it, or if it has been given to them, they make a feast to the whole village with it.

Their hospitality towards all sorts of strangers is remarkable.17

The more elaborate the feast, the more likely one is to see some combination of free sharing of some things (for instance, food and drink) and careful distribution of others: say, prize meat, whether from game or sacrifice, which is often parceled out according to very elabo¬ rate protocols or equally elaborate gift exchange. The giving and tak¬ ing of gifts often takes on a distinctly gamelike quality, continuous often with the actual games, contests, pageants, and performances that also often mark popular festivals. As with society at large, the shared conviviality could be seen as a kind of communistic base on top of which everything else is constructed. It also helps to emphasize that sharing is not simply about morality, but also about pleasure. Soli¬ tary pleasures will always exist, but for most human beings, the most pleasurable activities almost always involve sharing something: music, food, liquor, drugs, gossip, drama, beds. There is a certain communism of the senses at the root of most things we consider fun.

The surest way to know that one is in the presence of commu¬ nistic relations is that not only are no accounts taken, but it would be considered offensive, or simply bizarre, to even consider doing so. Each village, clan, or nation within the League of the Hodenosaunee, or Iroquois, for example, was divided into two halves.18 This is a com¬ mon pattern: in other parts of the world (Amazonia, Melanesia) too, there are arrangements in which members of one side can only marry someone from the other side, or only eat food grown on the other side; such rules are explicitly designed to make each side dependent on the other for some basic necessity of life. Among the Six Iroquois, each side was expected to bury the other’s dead. Nothing would be more absurd than for one side to complain that, “last year, we buried five of your dead, but you only buried two of ours.”

Baseline communism might be considered the raw material of soci¬ ality, a recognition of our ultimate interdependence that is the ultimate substance of social peace. Still, in most circumstances, that minimal baseline is not enough. One always behaves in a spirit of solidarity more with some people than others, and certain institutions are spe¬ cifically based on principles of solidarity and mutual aid. First among these are those we love, with mothers being the paradigm of selfless love. Others include close relatives, wives and husbands, lovers, one’s closest friends. These are the people with whom we share everything, or at least to whom we know we can turn in need, which is the

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definition of a true friend everywhere. Such friendships may be formal¬ ized by a ritual as “bond-friends” or “blood brothers” who cannot refuse each other anything. As a result, any community could be seen as criss-crossed with relations of “individualistic communism,” one-to- one relations that operate, to varying intensities and degrees, on the basis of “from each according to their ability, to each according to their needs.”19

This same logic can be, and is, extended within groups: not only cooperative work groups, but almost any in-group will define itself by creating its own sort of baseline communism. There will be certain things shared or made freely available within the group, others that anyone will be expected to provide for other members on request, that one would never share with or provide to outsiders: help in repair¬ ing one’s nets in an association of fisherman, stationery supplies in an office, certain sorts of information among commodity traders, and so forth. Also, certain categories of people we can always call on in certain situations, such as harvesting or moving house.20 One could go on from here to various forms of sharing, pooling, who gets to call on whom for help with certain tasks: moving, or harvesting, or even, if one is in trouble, providing an interest-free loan. Finally, there are the different sorts of “commons,” the collective administration of common resources.

The sociology of everyday communism is a potentially enormous field, but one which, owing to our peculiar ideological blinkers, we have been unable to write about because we have been largely unable to see it. Rather than try to further outline it, I will limit myself to three final points.

First, we are not really dealing with reciprocity here — or at best, only with reciprocity in the broadest sense.21 What is equal on both sides is the knowledge that the other person would do the same for you, not that they necessarily will. The Iroquois example brings home clearly what makes this possible: that such relations are based on a presumption of eternity. Society will always exist. Therefore, there will always be a north and a south side of the village. This is why no accounts need be taken. In a similar way, people tend to treat their mothers and best friends as if they will always exist, however well they know it isn’t true.

The second point has to do with the famous “law of hospitality.” There is a peculiar tension between a common stereotype of what are called “primitive societies” (people lacking both states and markets) as societies in which anyone not a member of the community is as¬ sumed to be an enemy, and the frequent accounts of early European

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travelers awestruck by the extraordinary generosity shown them by actual “savages.” Granted, there is a certain truth to both sides. Wher¬ ever a stranger is a dangerous potential enemy, the normal way to overcome the danger is by some dramatic gesture of generosity whose very magnificence catapults them into that mutual sociality that is the ground for all peaceful social relations. True, when one is dealing with completely unknown quantities, there is often a process of testing. Both Christopher Columbus, in Hispaniola, and Captain Cook, in Polynesia, reported similar stories of islanders who either flee, attack, or offer everything — but who often later enter the boats and help themselves to anything they take a fancy to, provoking threats of violence from the crew, who then did their utmost to establish the principle that relations between strange peoples should be mediated instead by “normal” com¬ mercial exchange.

It’s understandable that dealings with potentially hostile strangers should encourage an all-or-nothing logic, a tension preserved even in English in the etymology of the words “host,” “hostile,” “hostage,” and indeed “hospitality,” all of which are derived from the same Latin root.22 What I want to emphasize here is that all such gestures are simply exaggerated displays of that very “baseline communism” that I have already argued is the ground of all human social life. This is why, for instance, the difference between friends and enemies is so often articulated through food — and often the most commonplace, humble, domestic sorts of food: as in the familiar principle, common in both Europe and the Middle East, that those who have shared bread and salt must never harm one another. In fact, those things that exist above all to be shared often become those things one cannot share with en¬ emies. Among the Nuer, so free with food and everyday possessions, if one man murders another, a blood feud follows. Everyone in the vicinity will often have to line up on one side or another, and those on opposite sides are strictly forbidden to eat with anyone on the other, or even to drink from a cup or bowl one of their newfound enemies has previously used, lest terrible results ensue.23 The extraordinary in¬ convenience this creates is a major incentive to try to negotiate some sort of settlement. By the same token, it is often said that people who have shared food, or the right, archetypal kind of food, are forbidden to harm one another, however much they might be otherwise inclined to do so. At times, this can take on an almost comical formality, as in the Arab story of the burglar who, while ransacking someone’s house, stuck his finger in a jar to see if it was full of sugar, only to discover it was full of salt instead. Realizing that he had now eaten salt at the owner’s table, he dutifully put back everything he’d stolen.

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Finally, once we start thinking of communism as a principle of morality rather than just a question of property ownership, it becomes clear that this sort of morality is almost always at play to some degree in any transaction — even commerce. If one is on sociable terms with someone, it’s hard to completely ignore their situation. Merchants of¬ ten reduce prices for the needy. This is one of the main reasons why shopkeepers in poor neighborhoods are almost never of the same ethnic group as their customers; it would be almost impossible for a merchant who grew up in the neighborhood to make money, as they would be under constant pressure to give financial breaks, or at least easy credit terms, to their impoverished relatives and school chums. The opposite is true as well. An anthropologist who lived for some time in rural Java once told me that she measured her linguistic abilities by how well she could bargain at the local bazaar. It frustrated her that she could never get it down to a price as low as local people seemed pay. “Well,” a Ja¬ vanese friend finally had to explain, “they charge rich Javanese people more, too.”

Once again, we are back to the principle that if the needs (for instance, dire poverty), or the abilities (for instance, wealth beyond imagination), are sufficiently dramatic, then unless there is a complete absence of sociality, some degree of communistic morality will almost inevitably enter into the way people take accounts.24 A Turkish folktale about the Medieval Sufi mystic Nasruddin Hodja illustrates the com¬ plexities thus introduced into the very concept of supply and demand:

One day when Nasruddin was left in charge of the local tea¬ house, the king and some retainers, who had been hunting nearby, stopped in for breakfast.

“Do you have quail eggs?” asked the king.

“I’m sure I can find some,” answered Nasruddin.

The king ordered an omelet of a dozen quail eggs, and Nasruddin hurried out to look for them. After the king and his party had eaten, he charged them a hundred gold pieces.

The king was puzzled. “Are quail eggs really that rare in this part of the country?”

“It’s not so much quail eggs that are rare around here,” Nasruddin replied. “It’s more visits from kings.”

Exchange

Communism, then, is based neither in exchange nor in reciprocity — except, as I have observed, in the sense that it does involve mutual ex¬ pectations and responsibilities. Even here, it seems better to use another

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word (“mutuality”?) so as to emphasize that exchange operates on entirely different principles; that it’s a fundamentally different kind of moral logic.

Exchange is all about equivalence. It’s a back-and-forth process involving two sides in which each side gives as good as it gets. This is why one can speak of people exchanging words (if there’s an argu¬ ment), blows, or even gunfire.25 In these examples, it’s not that there is ever an exact equivalence — even if there were some way to measure an exact equivalence — but more a constant process of interaction tend¬ ing toward equivalence. Actually, there’s something of a paradox here: each side in each case is trying to outdo the other, but, unless one side is utterly put to rout, it’s easiest to break the whole thing off when both consider the outcome to be more or less even. When we move to the exchange of material goods, we find a similar tension. Often there is an element of competition; if nothing else, there’s always that pos¬ sibility. But at the same time, there’s a sense that both sides are keeping accounts, and that, unlike what happens in communism, which always partakes of a certain notion of eternity, the entire relationship can be canceled out, and either party can call an end to it at any time.

This element of competition can work in completely different ways. In cases of barter or commercial exchange, when both parties to the transaction are only interested in the value of goods being trans¬ acted, they may well — as economists insist they should — try to seek the maximum material advantage. On the other hand, as anthropologists have long pointed out, when the exchange is of gifts, that is, the objects passing back and forth are mainly considered interesting in how they reflect on and rearrange relations between the people carrying out the transaction, then insofar as competition enters in, it is likely to work precisely the other way around — to become a matter of contests of generosity, of people showing off who can give more away.

Let me take these one at a time.

What 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 or 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 social¬ ity. 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

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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.

The first time I visited Analakely, the great cloth market in Mada¬ gascar’s capital, I came with a Malagasy friend intent on buying a sweater. The whole process took about four hours. It went something like this: my friend would spot a likely sweater hanging in some booth, ask the price, and then she would begin a prolonged battle of wits with the vendor, invariably involving dramatic displays of insult and indig¬ nation, and simulated walkings off in disgust. Often it seemed ninety percent of the argument was spent on a final, tiny difference of a few ariary — literally, pennies — that seemed to become a profound matter of principle on either side, since a merchant’s failure to concede it could sink the entire deal.

The second time I visited Analakely I went with another friend, also a young woman, who had a list of measures of cloth to buy sup¬ plied by her sister. 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 a minute!” I asked. “You can do that?

“Sure,” she said. “Why not?”

I explained what had happened with my last friend.

“Oh, yeah,” she said. “Some people enjoy that sort of thing.”

Exchange allows us to cancel out our debts. It gives us a way to call it even: hence, to end the relationship. With vendors, one is usu¬ ally only pretending to have a relationship at all. With neighbors, one might for this very reason prefer not to pay one’s debts. Laura Bohannan writes about arriving in a Tiv community in rural Nigeria; neighbors immediately began arriving bearing little gifts: “two ears corn, one vegetable marrow, one chicken, five tomatoes, one handful peanuts.”27 Having no idea what was expected of her, she thanked them and wrote down in a notebook their names and what they had

THE MORAL GROUNDS OF ECONOMIC RELATIONS

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brought. Eventually, two women adopted her and explained that all such gifts did have to be returned. It would be entirely inappropriate to simply accept three eggs from a neighbor and never bring anything back. One did not have to bring back eggs, but one should bring some¬ thing back of approximately the same value. One could even bring money — there was nothing inappropriate in that — provided one did so at a discreet interval, and above all, that one did not bring the exact cost of the eggs. It had to be either a bit more or a bit less. To bring back nothing at all would be to cast oneself as an exploiter or a parasite. To bring back an exact equivalent would be to suggest that one no longer wishes to have anything to do with the neighbor. Tiv women, she learned, might spend a good part of the day walking for miles to distant homesteads to return a handful of okra or a tiny bit of change, “in an endless circle of gifts to which no one ever handed over the precise value of the object last received” — and in doing so, they were continually creating their society. There was certainly a trace of communism here — neighbors on good terms could also be trusted to help each other out in emergencies — but unlike communistic relations, which are assumed to be permanent, this sort of neighborliness had to be constantly created and maintained, because any link can be broken off at any time.

There are endless variations on this sort of tit-for-tat, or almost tit-for-tat, gift exchange. The most familiar is the exchange of presents: I buy someone a beer; they buy me the next one. Perfect equivalence implies equality. But consider a slightly more complicated example: I take a friend out to a fancy restaurant for dinner; after a discreet inter¬ val, they do the same. As anthropologists have long been in the habit of pointing out, the very existence of such customs — especially, the feeling that one really ought to return the favor — can’t be explained by stan¬ dard economic theory, which assumes that any human interaction is ultimately a business deal and that we are all self-interested individuals trying to get the most for ourselves for the least cost or least amount of effort.28 But this feeling is quite real, and it can cause genuine strain for those of limited means trying to keep up appearances. So: Why, if I took a free-market economic theorist out to an expensive dinner, would that economist feel somewhat diminished — uncomfortably in my debt — until he had been able to return the favor? Why, if he were feeling competitive with me, would he be inclined to take me to some¬ place even more expensive?

Recall the feasts and festivals alluded to above: here, too, there is a base of conviviality and playful (sometimes not so playful) competition. On the one hand, everyone’s pleasure is enhanced — after all, how many

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people would really want to eat a superb meal at a French restau¬ rant all alone? On the other, things can easily slip into games of one- upmanship — and hence obsession, humiliation, rage . . . or, as we’ll soon see, even worse. In some societies, these games are formalized, but it’s important to stress that such games only really develop between people or groups who perceive themselves to be more or less equivalent in status.29 To return to our imaginary economist: it’s not clear that he would feel diminished if he received a present, or was taken out to dinner, by just anyone. He would be most likely to feel this way if the benefactor were someone he felt was of roughly equivalent status or dignity: a colleague, for example. If Bill Gates or George Soros took him out to dinner, he would likely conclude that he had indeed re¬ ceived something for nothing and leave it at that. If some ingratiating junior colleague or eager graduate student did the same, he’d be likely to conclude that he was doing the man a favor just by accepting the invitation — if indeed he did accept, which he probably wouldn’t.

This, too, appears to be the case wherever we find society divided into fine gradations of status and dignity. Pierre Bourdieu has described the “dialectic of challenge and riposte” that governs all games of honor among Kabyle Berber men in Algeria, in which the exchange of insults, attacks (in feud or battles), thefts, or threats was seen to follow exactly the same logic as the exchange of gifts.30 To give a gift is both an honor and a provocation. To respond to one requires infinite artistry. Timing is all-important. So is making the counter-gift just different enough, but also just slightly grander. Above 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. There’s an Indonesian story about that too: about a rich man who sacrificed a magnificent ox to shame a penurious rival; the poor man utterly humiliated him, and won the contest, by calmly proceeding to sacrifice a chicken.31

Games like this become especially elaborate when status is to some degree up for grabs. When matters are too clear-cut, that introduces its own sorts of problems. Giving gifts to kings is often a particularly tricky and complicated business. The problem here is that one cannot really give a gift fit for a king (unless, perhaps, one is another king), since kings by definition already have everything. On the one hand, one is expected to make a reasonable effort:

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Nasruddin was once called up to visit the king. A neighbor saw him hurrying along the road carrying a bag of turnips.

“What are those for?” he asked.

“I’ve been called to see the king. I thought it would be best to bring some kind of present.”

“You’re bringing him turnips? But turnips are peasant food!

He’s a king! You should bring him something more appropri¬ ate, like grapes.”

Nasruddin agreed, and came to the king carrying a bunch of grapes. The king was not amused. “You’re giving me grapes?

But I’m a king! This is ridiculous. Take this idiot out and teach him some manners! Throw each and every one of the grapes at him and then kick him out of the palace.”

The emperor’s guards dragged Nasruddin into a side room and began pelting him with grapes. As they did so, he fell on his knees and began crying, “Thank you, thank you God, for your infinite mercy!”

“Why are you thanking God?” they asked. “You’re being totally humiliated!”

Nasruddin replied, “Oh, I was just thinking, ‘Thank God I didn’t bring the turnips!”’

On the other hand, to give something that a king does not already have can get you in even greater trouble. One story circulating in the early Roman Empire concerned an inventor who, with great fanfare, presented a glass bowl as a gift to the emperor Tiberius. The emperor was puzzled: What was so impressive about a piece of glass? The man dropped it on the ground. Rather than shattering, it merely dented. He picked it up and simply pushed it back into its former shape.

“Did you tell anyone else how you made this thing?” asked a startled Tiberius.

The inventor assured him that he had not. The emperor therefore ordered him killed, since, if word of how to make unbreakable glass got out, his treasury of gold and silver would soon be worthless.32

The best bet when dealing with kings was to make a reason¬ able effort to play the game, but one that is still bound to fail. The fourteenth-century Arab traveler Ibn Battuta tells of the customs of the King of Sind, a terrifying monarch who took a particular delight in displays of arbitrary power.33 It was customary for foreign worthies visiting the king to present him with magnificent presents; whatever the gift was, he would invariably respond by presenting the bearer with something many times its value. As a result, a substantial business

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developed where local bankers would lend money to such visitors to finance particularly spectacular gifts, knowing they could be well re¬ paid from the proceeds of royal one-upmanship. The king must have known about this. He didn’t object — since the whole point was to show that his wealth exceeded all possible equivalence — and if he re¬ ally needed to, he could always expropriate the bankers. They knew that the really important game was not economic, but one of status, and his was absolute.

In exchange, the objects being traded are seen as equivalent. There¬ fore, by implication, so are the people: at least, at the moment when gift is met with counter-gift, or money changes hands; when there is no further debt or obligation and each of the two parties is equally free to walk away. This in turn implies autonomy. Both principles sit uncomfortably with monarchs, which is the reason that kings generally dislike any sort of exchange.34 But within that overhanging prospect of potential cancellation, of ultimate equivalence, we find endless varia¬ tions, endless games one can play. One can demand something from another person, knowing that by doing so, one is giving the other the right to demand something of equivalent value in return. In some con¬ texts, even praising another’s possession might be interpreted as a de¬ mand of this sort. In eighteenth-century New Zealand, English settlers soon learned that it was not a good idea to admire, say, a particularly beautiful jade pendant worn around the neck of a Maori warrior; the latter would inevitably insist on giving it, not take no for an answer, and then, after a discreet interval, return to praise the settler’s coat or gun. The only way to head this off was to quickly give him a gift before he could ask for one. Sometimes gifts are offered in order for the giver to be able to make such a demand: if one accepts the present, one is tacitly agreeing to allow the giver to claim whatever he deems equivalent.35

All this, in turn, can shade into something very much like barter, directly swapping one thing for another — which as we’ve seen does occur even in what Marcel Mauss liked to refer to as “gift econo¬ mies,” even if largely between strangers.36 Within communities, there is almost always a reluctance, as the Tiv example so nicely illustrates, to allow things to cancel out — one reason that if there is money in common usage, people will often either refuse to use it with friends or relatives (which in a village society includes pretty much everyone), or alternately, like the Malagasy villagers in chapter 3, use it in radically different ways.

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Hierarchy

Exchange, then, implies formal equality — or at least, the potential for it. This is precisely why kings have such trouble with it.

In contrast, relations of explicit hierarchy — that is, relations be¬ tween at least two parties in which one is considered superior to the other — do not tend to operate by reciprocity at all. It’s hard to see because the relation is often justified in reciprocal terms (“the peas¬ ants provide food, the lords provide protection”), but the principle by which they operate is exactly the opposite. In practice, hierarchy tends to work by a logic of precedent.

To illustrate what I mean by this, let us imagine a kind of con¬ tinuum of one-sided social relations, ranging from the most exploit¬ ative 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 inten¬ tion 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. One extreme form of this, documented in various parts of the world, is the gift by stealth, in a kind of reverse burglary: to literally sneak into the recipient’s house at night and plant one’s present so no one can know for sure who has left it. The figure of Santa Claus, or Saint Nicholas (who, it must be remembered, was not just the patron saint of children, but also the patron saint of thieves) would appear to be the mythological version of the same principle: a benevolent burglar with whom no social relations are possible and therefore to whom no one could possibly owe anything, in his case, above all, because he does not actually exist.

Observe, however, what happens when one moves just a little bit less far out on the continuum in either direction. I have been told (I suspect it isn't true) that in parts of Belarus, gangs prey so systemati¬ cally on travelers on trains and busses that they have developed the habit of giving each victim a little token, to confirm that the bearer has already been robbed. Obviously one step toward the creation of a state. Actually, one popular theory of the origins of the state, that goes back at least to the fourteenth-century North African historian Ibn Khaldun, runs precisely along these lines: nomadic raiders eventually systematize

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their relations with sedentary villagers; pillage turns into tribute, rape turns into the “right of the first night” or the carrying off of likely can¬ didates as recruits for the royal harem. Conquest, untrammeled force, becomes systematized, and thus framed not as a predatory relation but as a moral one, with the lords providing protection, and the villagers, their sustenance. But even if all parties assume they are operating by a shared moral code, that even kings cannot do whatever they want but must operate within limits, allowing peasants to argue about the rights and wrongs of just how much of their harvest a king’s retainers are entitled to carry off, they are very unlikely to frame their calculation in terms of the quality or quantity of protection provided, but rather in terms of custom and precedent: How much did we pay last year? How much did our ancestors have to pay? The same is true on the other side. If charitable donations become the basis for any sort of social relation, it will not be one based on reciprocity. If you give some coins to a panhandler, and that panhandler recognizes you later, it is unlikely that he will give you any money — but he might well consider you more likely to give him money again. Certainly this is true if one donates money to a charitable organization. (I gave money to the United Farm Workers once and I still haven’t heard the end of it.) Such an act of one-sided generosity is treated as a precedent for what will be expected afterward.38 It’s quite the same if one gives candy to a child.

This is what I mean when I say that hierarchy operates by a prin¬ ciple that is the very opposite of reciprocity. Whenever the lines of su¬ periority 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. Sometimes the situation is assumed to have originated in some founding act of conquest. Or it might been seen as ancestral custom for which there is no need of explanation. But this introduces another complication to the problem of giving gifts to kings — or to any superior: there is always the danger that it will be treated as a precedent, added to the web of cus¬ tom, and therefore considered obligatory thereafter. Xenophon claims that in the early days of the Persian Empire, each province vied to send the Great King gifts of its most unique and valuable products. This became the basis of the tribute system: each province was eventually expected to provide the same “gifts” every year.39 Similarly, according to the great Medieval historian Marc Bloch:

[I]n the ninth century, when one day there was a shortage of wine in the royal cellars at Ver, the monks of Saint-Denis were

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asked to supply the two hundred hogs-heads required. This contribution was thenceforth claimed from them as of right every year, and it required an imperial charter to abolish it. At Ardres, we are told, there was once a bear, the property of the local lord. The inhabitants, who loved to watch it fight with dogs, undertook to feed it. The beast eventually died, but the lord continued to exact the loaves of bread.”40

In other words, any gift to a feudal superior, “especially if repeated three of four times,” was likely to be treated as a precedent and added to the web of custom. As a result, those giving gifts to superiors often insisted on receiving a “letter of non-prejudice” legally stipulating that such a gift would not be required in the future. While it is unusual for matters to become quite so formalized, any social relation that is as¬ sumed from the start to be unequal will inevitably begin to operate on an analogous logic — if only because, once relations are seen as based on “custom,” the only way to demonstrate that one has a duty or obli¬ gation to do something is to show that one has done it before.

Often, 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 over¬ looked: 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 differ¬ ent 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.

In fact, something like this happens in a small way even in our most intimate social relations. The moment we recognize someone as a different sort of person, either above or below us, then ordinary rules of reciprocity become modified or are set aside. If a friend is unusually generous once, we will likely wish to reciprocate. If she acts this way repeatedly, we conclude she is a generous person, and are hence less likely to reciprocate.42

We can describe a simple formula here: a certain action, repeated, becomes customary; as a result, it comes to define the actor’s essential nature. Alternately, a person’s nature may be defined by how others

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have acted toward him in the past. To be an aristocrat is largely to insist that in the past, others have treated you as an aristocrat (since aristocrats don’t really do anything in particular, most spend their time simply existing in some sort of putatively superior state), and therefore should continue to do so. Much of the art of being such a person is that of treating oneself in such a manner that it conveys how you expect others to treat you: in the case of actual kings, covering oneself with gold so as to suggest that others do likewise. On the other end of the scale, this is also how abuse becomes self-legitimating. As a former student of mine, Sarah Stillman, pointed out: in the United States, if a middle-class thirteen-year-old girl is kidnapped, raped, and killed, it is considered an agonizing national crisis that everyone with a tele¬ vision is expected to follow for several weeks. If a thirteen-year-old girl is turned out as a child prostitute, raped systematically for years, and ultimately killed, all this is considered unremarkable — really just the sort of thing one can expect to end up happening to someone like that.43

When objects of material wealth pass back and forth between su¬ periors and inferiors as gifts or payments, the key principle seems to be that the sorts of things given on each side should be considered fundamentally different in quality, their relative value impossible to quantify — the result being that there is no way to even conceive of a squaring of accounts. Even if Medieval writers insisted on imagining society as a hierarchy in which priests pray for everyone, nobles fight for everyone, and peasants feed everyone, it never even occurred to anyone to establish how many prayers or how much military protec¬ tion was equivalent to a ton of wheat. Nor did anyone ever consider making such a calculation. Neither is it that “lowly” sorts of people are necessarily given lowly sorts of things and vice versa. Sometimes it is quite the opposite. Until recently, just about any notable philosopher, artist, poet, or musician was required to find a wealthy patron for support. Famous works of poetry or philosophy are often prefaced — oddly, to the modern eye — with gushing, sycophantic praise for the wisdom and virtue of some long-forgotten earl or count who provided a meager stipend. The fact that the noble patron merely provided room and board, or money, and that the client showed his gratitude by painting the Mona Lisa, or composing the Toccata and Fugue in D Minor, was in no way seen to compromise the assumption of the noble’s intrinsic superiority.

There is one great exception to this principle, and that is the phe¬ nomenon of hierarchical redistribution. Here, though, rather than giv¬ ing back and forth the same sorts of things, they give back and forth

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exactly the same thing: as, for instance, when fans of certain Nigerian pop stars throw money onto the stage during concerts, and the pop stars in question make occasional tours of their fans’ neighborhoods tossing (the same) money from the windows of their limos. When this is all that’s going on, we may speak of an absolutely minimal sort of hierarchy. In much of Papua New Guinea, social life centers on “big men,” charismatic individuals who spend much of their time coaxing, cajoling, and manipulating in order to acquire masses of wealth to give away again at some great feast. One could, in practice, pass from here to, say, an Amazonian or indigenous North American chief. Unlike big men, their role is more formalized; but actually such chiefs have no power to compel anyone to do anything they don’t want to (hence North American Indian chiefs’ famous skill at oratory and powers of persuasion). As a result, they tended to give away far more than they received. Observers often remarked that in terms of personal posses¬ sions, a village chief was often the poorest man in the village, such was the pressure on him for constant supply of largesse.

Indeed, one could judge how egalitarian a society really was by ex¬ actly this: whether those ostensibly in positions of authority are merely conduits for redistribution, or able to use their positions to accumulate riches. The latter seems most likely in aristocratic societies that add another element: war and plunder. After all, just about anyone who comes into a very large amount of wealth will ultimately give at least part of it away — often in grandiose and spectacular ways to large num¬ bers of people. The more of one’s wealth is obtained by plunder or extortion, the more spectacular and self-aggrandizing will be the forms in which it’s given away.44 And what is true of warrior aristocracies is all the more true of ancient states, where rulers almost invariably represented themselves as the protectors of the helpless, supporters of widows and orphans, and champions of the poor. The genealogy of the modern redistributive state — with its notorious tendency to foster identity politics — can be traced back not to any sort of “primitive com¬ munism” but ultimately to violence and war.

Shifting between Modalities

I should underline again that we are not talking about different types of society here (as we’ve seen, the very idea that we’ve ever been or¬ ganized into discrete “societies” is dubious) but moral principles that always coexist everywhere. We are all communists with 'our closest

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friends, and feudal lords when dealing with small children. It is very hard to imagine a society where people wouldn’t be both.

The obvious question is: If we are all ordinarily moving back and forth between completely different systems of moral accounting, why hasn’t anybody noticed this? Why, instead, do we continually feel the need to reframe everything in terms of reciprocity?

Here we must return to the fact that reciprocity is our main way of imagining justice. In particular, it is what we fall back on when we’re thinking in the abstract, and especially when we’re trying to create an idealized picture of society. I’ve already given examples of this sort of thing. Iroquois communities were based on an ethos that required ev¬ eryone to be attentive to the needs of several different sorts of people: their friends, their families, members of their matrilineal clans, even friendly strangers in situations of hardship. It was when they had to think about society in the abstract that they started to emphasize the two sides of the village, each of which had to bury the other’s dead. It was a way of imagining communism through reciprocity. Similarly, feudalism was a notoriously messy and complicated business, but when¬ ever Medieval thinkers generalized about it, they reduced all its ranks and orders into one simple formula in which each order contributed its share: “Some pray, some fight, still others work.”4S Even hierarchy was seen as ultimately reciprocal, despite this formula having nothing to do with the real relations between priests, knights, and peasants really operated on the ground. Anthropologists are familiar with the phe¬ nomenon: it’s only when people who have never had occasion to really think about their society or culture as a whole, who probably weren’t even aware they were living inside something other people considered a “society” or a “culture,” are asked to explain how everything works that they say things like “this is how we repay our mothers for the pain of having raised us,” or puzzle over conceptual diagrams in which clan A gives their women in marriage to clan B who gives theirs to clan C, who gives theirs back to A again, but which never seem to quite cor¬ respond to what real people actually do.46 When trying to imagine a just society, it’s hard not to evoke images of balance and symmetry, of elegant geometries where everything balances out.

The idea that there is something called “the market” is not so very different. Economists will often admit this, if you ask them in the right way. Markets aren’t real. They are mathematical models, created by imagining a self-contained world where everyone has exactly the same motivation and the same knowledge and is engaging in the same self- interested calculating exchange. Economists are aware that reality is always more complicated; but they are also aware that to come up with

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a mathematical model, one always has to make the world into a bit of a cartoon. There’s nothing wrong with this. The problem comes when it enables some (often these same economists) to declare that anyone who ignores the dictates of the market shall surely be punished — or that since we live in a market system, everything (except government interference) is based on principles of justice: that our economic system is one vast network of reciprocal relations in which, in the end, the accounts balance and all debts are paid.

These principles get tangled up in each other and it’s thus often difficult to tell which predominates in a given situation — one reason that it’s ridiculous to pretend we could ever reduce human behavior, economic or otherwise, to a mathematical formula of any sort. Still, this means that some degree of reciprocity can be detected as poten¬ tially present in any situation; so a determined observer can always find some excuse to say it’s there. What’s more, certain principles appear to have an inherent tendency to slip into others. For instance, a lot of extremely hierarchical relationships can operate (at least some of the time) on communistic principles. If you have a rich patron, you come to him in times of need, and he is expected to help you. But only to a certain degree. No one expects the patron to provide so much help that it threatens to undermine the underlying inequality.47

Likewise, communistic relations can easily start slipping into rela¬ tions of hierarchical inequality — often without anyone noticing it. It’s not hard to see why this happens. Sometimes different people’s “abili¬ ties” and “needs” are grossly disproportionate. Genuinely egalitarian societies are keenly aware of this and tend to develop elaborate safe¬ guards around the dangers of anyone — say, especially good hunters, in a hunting society — rising too far above themselves; just as they tend to be suspicious of anything that might make one member of the so¬ ciety feel in genuine debt to another. A member who draws attention to his own accomplishments will find himself the object of mockery. Often, the only polite thing to do if one has accomplished something significant is to instead make fun of oneself. The Danish writer Peter Freuchen, in his Book of the Eskimo, described how in Greenland, one could tell what a fine delicacy someone had to offer his guests by how much he belittled it beforehand:

The old man laughed. “Some people don’t know much. I am such a poor hunter and my wife a terrible cook who ruins everything. I don’t have much, but I think there is a piece of meat outside. It might still be there as the dogs have refused it several times.”

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This was such a recommendation in the Eskimo way of backwards bragging that everyone’s mouths began to water . . .

The reader will recall the walrus hunter of the last chapter, who took offense when the author tried to thank him for giving him a share of meat — after all, humans help one another, and once we treat some¬ thing as a gift, we turn into something less than human: “Up here we say that by gifts one makes slaves and by whips one makes dogs.”48

“Gift” here does not mean something given freely, not mutual aid that we can ordinarily expect human beings to provide to one another. To thank someone suggests that he or she might not have acted that way, and that therefore the choice to act this way creates an obliga¬ tion, a sense of debt — and hence, inferiority. Communes or egalitarian collectives in the United States often face similar dilemmas, and they have to come up with their own safeguards against creeping hierar¬ chy. It’s not that the tendency for communism to slip into hierarchy is inevitable — societies like the Inuit have managed to fend it off for thousands of years — but rather, that one must always guard against it.

In contrast, it’s notoriously difficult — often downright impossible — to shift relations based on an assumption of communistic sharing to relations of equal exchange. We observe this all the time with friends: if someone is seen as taking advantage of your generosity, it’s often much easier to break off relations entirely than to demand that they some¬ how pay you back. One extreme example is the Maori story about a notorious glutton who used to irritate fishermen up and down the coast near where he lived by constantly asking for the best portions of their catch. Since to refuse a direct request for food was effectively impos¬ sible, they would dutifully turn it over; until one day, people decided enough was enough and killed him.49

We’ve already seen how creating a ground of sociability among strangers can often require an elaborate process of testing the oth¬ ers’ limits by helping oneself to their possessions. The same sort of thing can happen in peacemaking, or even in the creation of business partnerships.50 In Madagascar, people told me that two men who are thinking of going into business together will often become blood broth¬ ers. Blood brotherhood, fatidra, consists of an unlimited promise of mutual aid. Both parties solemnly swear that they will never refuse any request from the other. In reality, partners to such an agreement are usually fairly circumspect in what they actually request. But, my friends insisted, when people first make such an agreement, they sometimes like to test it out. One may demand the other’s house, the shirt off his back, or (everyone’s favorite example) the right to spend the night

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with his wife. The only limit is the knowledge that anything one can demand, the other one can too.51 Here, again, we are talking about an initial establishment of trust. Once the genuineness of the mutual com¬ mitment has been confirmed, the ground is prepared, as it were, and the two men can begin to buy and sell on consignment, advance funds, share profits, and otherwise trust that each will look after the other’s commercial interests from then on. The most famous and dramatic moments, however, are those when relations of exchange threaten to break down into hierarchy: that is, when two parties are acting like equals, trading gifts, or blows, or commodities, or anything else, but one of them does something that completely flips the scale.

I’ve already mentioned the tendency of gift exchange to turn into games of one-upmanship, and how in some societies this potential is formalized in great public contests. This is typical, above all, of what are often called “heroic societies”: those in which governments are weak or nonexistent and society is organized instead around warrior noblemen, each with his entourage of loyal retainers and tied to the others by ever-shifting alliances and rivalries. Most epic poetry — from the Iliad to the Mababbarata to Beowulf — harkens back to this sort of world, and anthropologists have discovered similar arrangements among the Maori of New Zealand and the Kwakiutl, Tlingit, and Haida of the American Northwest coast. In heroic societies, the throw¬ ing of feasts and resulting contests of generosity are often spoken of as mere extensions of war: “fighting with property” or “fighting with food.” Those who throw such feasts often indulge in colorful speeches about how their enemies are thus crushed and destroyed by glorious feats of generosity aimed in their direction (Kwakiutl chiefs liked to speak of themselves as great mountains from which gifts rolled like gi¬ ant boulders), and of how conquered rivals are thus reduced — much as in the Inuit metaphor — to slaves.

Such statements are not to be taken literally — another feature of such societies is a highly developed art of boasting.52 Heroic chiefs and warriors tended to talk themselves up just as consistently as those in egalitarian societies talked themselves down. It’s not as if someone who loses out in a contest of gift exchange is ever actually reduced to slav¬ ery, but he might end up feeling as if he were. And the consequences could be catastrophic. One ancient Greek source describes Celtic fes¬ tivals where rival nobles would alternate between jousts and contests of generosity, presenting their enemies with magnificent gold and silver treasures. Occasionally this could lead to a kind of checkmate; some¬ one would be faced with a present so magnificent that he could not possibly match it. In this case, the only honorable response was for him

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to cut his own throat, thus allowing his wealth to be distributed to his followers.53 Six hundred years later, we find a case from an Icelandic saga of an aging Viking named Egil, who befriended a younger man named Einar, who was still actively raiding. They liked to sit together composing poetry. One day Einar came by a magnificent shield “in¬ scribed with old tales; and between the writing were overlaid spangles of gold with precious stones.” No one had ever seen anything like it. He took it with him on a visit to Egil. Egil was not at home, so Einar waited three days, as was the custom, then hung the shield as a present in the mead-hall and rode off.

Egil returned home, saw the shield, and asked who owned such a treasure. He was told that Einar had visited and given it to him. Then Egil said, “To hell with him! Does he think I’m going to stay up all night and compose a poem about his shield? Get my horse, I’m going to ride after him and kill him.”

As Einar’s luck would have it he had left early enough to put sufficient distance between himself and Egil. So Egil resigned himself to composing a poem about Einar’s gift.’4

I I I I I

Competitive gift exchange, then, does not literally render anyone slaves; it is simply an affair of honor. These are people, however, for whom honor is everything.

The main reason that being unable to pay a debt, especially a debt of honor, was such a crisis was because this was how noblemen as¬ sembled their entourages. The law of hospitality in the ancient world, for instance, insisted that any traveler must be fed, given shelter, and treated as an honored guest — but only for a certain length of time. If a guest did not go away, he would eventually become a mere sub¬ ordinate. The role of such hangers-on has been largely neglected by students of human history. In many periods — from imperial Rome to medieval China — probably the most important relationships, at least in towns and cities, were those of patronage. Anyone rich and important would find himself surrounded by flunkies, sycophants, perpetual din¬ ner guests, and other sorts of willing dependents. Drama and poetry of the time are full of such characters.55 Similarly, for much of hu¬ man history, being respectable and middle-class meant spending one’s mornings going from door to door, paying one’s respects to important local patrons. To this day, informal patronage systems still crop up, whenever relatively rich and powerful people feel the need to assemble

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networks of supporters — a practice well documented in many parts of the Mediterranean, the Middle East, and Latin America. Such rela¬ tionships seem to consist of a slapdash mix of all three principles that I’ve been mapping out over the course of this chapter; nevertheless, those observing them insist on trying to cast them in the language of exchange and debt.

A final example: in a collection called Gifts and Spoils, published in 1971, we find a brief essay by the anthropologist Lorraine Blaxter about a rural department in the French Pyrenees, most of whose inhabitants are farmers. Everyone places a great emphasis on the importance of mutual aid — the local phrase means “giving service” ( rendre service). People living in the same community should look out for one another and pitch in when their neighbors are having trouble. This is the es¬ sence of communal morality, in fact, it’s how one knows that any sort of community exists. So far so good. However, she notes, when some¬ one does a particularly great favor, mutual aid can turn into something else:

If a man in a factory went to the boss and asked for a job, and the boss found him one, this would be an example of someone giving service. The man who got the job could never repay the boss, but he could show him respect, or perhaps give him sym¬ bolic gifts of garden produce. If a gift demands a return, and no tangible return is possible, the repayment will be through support or esteem.56

Thus does mutual aid slip into inequality. Thus do patron-client relations come into being. We have already observed this. I chose this particular passage because the author’s phrasing is so weird. It com¬ pletely contradicts itself. The boss does the man a favor. The man cannot repay the favor. Therefore, the man repays the favor by show¬ ing up at the boss’s house with the occasional basket of tomatoes and showing him respect. So which one is it? Can he repay the favor, or not?

Peter Freuchen’s walrus hunter would, no doubt, think he knew exactly what was going on here. Bringing the basket of tomatoes was simply the equivalent of saying “Thank you.” It was a way of ac¬ knowledging that one owes a debt of gratitude, that gifts had in fact made slaves just as whips make dogs. The boss and the employee are now fundamentally different sorts of people. The problem is that in all other respects, they are not fundamentally different sorts of people. Most likely they are both middle-aged Frenchmen, fathers of families,

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citizens of the Republic with similar tastes in music, sports, and food. They ought to be equals. As a result, even the tomatoes, which are re¬ ally a token of recognition of the existence of a debt that can never be repaid, has to be represented as if it was itself a kind of repayment — - an interest payment on a loan that could, everyone agrees to pretend, someday be paid back, thus returning the two members to their proper equal status once again.57

(It’s telling that the favor is finding the client a job in a factory, because what happens is not very different from what happens when you get a job in a factory to begin with. A wage-labor contract is, ostensibly, a free contract between equals — but an agreement between equals in which both agree that once one of them punches the time clock, they won’t be equals any more.58 The law does recognize a bit of a problem here; that’s why it insists that you cannot sell off your equal¬ ity permanently [you are not free to sell yourself into slavery]. Such ar¬ rangements are only acceptable if the boss’s power is not absolute, if it is limited to work time, and if you have the legal right to break off the contract and thereby to restore yourself to full equality, at any time.)

It seems to me that this agreement between equals to no longer be equal (at least for a time) is critically important. It is the very essence of what we call “debt.”

I I I I I

What, then, is debt?

Debt is a very specific thing, and it arises from very specific situ¬ ations. 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.) Legal — rather than moral — debts have other unique qualities. For instance, they can be forgiven, which isn’t always possible with a moral debt.

This means that there is no such thing as a genuinely unpayable debt. If there was no conceivable way to salvage the situation, we

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wouldn’t be calling it a “debt.” Even the French villager could, con¬ ceivably, save his patron’s life, or win the lottery and buy the factory. Even when we speak of a criminal “paying his debt to society,” we are saying that he has done something so terrible that he has now been banished from that equal status under the law that belongs by natural right to any citizen of his country; however, we call it a “debt” because it can be paid, equality can be restored, even if the cost may be death by lethal injection.

During the time that the debt remains unpaid, the logic of hierar¬ chy takes hold. There is no reciprocity. As anyone who has ever been in jail knows, the first thing the jailors communicate is that nothing that happens in jail has anything to do with justice. Similarly, debtor and creditor confront each other like a peasant before a feudal lord. The law of precedent takes hold. If you bring your creditor tomatoes from the garden, it never occurs to you that he would give something back. He might expect you to do it again, though. But always there is the assumption that the situation is somewhat unnatural, because the debt really ought to be paid.

This is what makes situations of effectively unpayable debt so dif¬ ficult 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.

This connection becomes clear if we look at the etymology of com¬ mon words for “debt” in European languages. Many are synonyms for “fault,” “sin,” or “guilt;” just as a criminal owes a debt to society, a debtor is always a sort of criminal.” In ancient Crete, according to Plu¬ tarch, it was the custom for those taking loans to pretend to snatch the money from the lender’s purse. Why, he wondered? Probably “so that, if they default, they could be charged with violence and punished all the more.”60 This is why in so many periods of history insolvent debt¬ ors could be jailed, or even — as in early Republican Rome — executed.

A debt, then, is just an exchange that has not been brought to completion.

It follows that debt is strictly a creature of reciprocity and has little to do with other sorts of morality (communism, with its needs and abilities; hierarchy, with its customs and qualities). True, if we were really determined, we could argue (as some do) that communism is a condition of permanent mutual indebtedness, or that hierarchy is con¬ structed out of unpayable debts. But isn’t this just the same old story, starting from the assumption that all human interactions must be, by definition, forms of exchange, and then performing whatever mental somersaults are required to prove it?

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No. All human interactions are not forms of exchange. Only some are. Exchange encourages a particular way of conceiving human rela¬ tions. This is because exchange implies equality, but it also implies separation. It’s precisely when the money changes hands, when the debt is cancelled, that equality is restored and both parties can walk away and have nothing further to do with each other.

Debt is what happens in between: when the two parties cannot yet walk away from each other, because they are not yet equal. But it is carried out in the shadow of eventual equality. Because achieving that equality, however, destroys the very reason for having a relation¬ ship, just about everything interesting happens in between.61 In fact, just about everything human happens in between — even if this means that all such human relations bear with them at least a tiny element of criminality, guilt, or shame.

For the Tiv women whom I mentioned earlier in the chapter, this wasn’t much of a problem. By ensuring that everyone was always slightly in debt to one another, they actually created human society, if a very fragile sort of society — a delicate web made up of obligations to return three eggs or a bag of okra, ties renewed and recreated, as any one of them could be cancelled out at any time.

Our own habits of civility are not so very different. Consider the custom, in American society, of constantly saying “please” and “thank you.” To do so is often treated as basic morality: we are constantly chiding children for forgetting to do it, just as the moral guardians of our society — teachers and ministers, for instance — do to everybody else. We often assume that the habit is universal, but as the Inuit hunter made clear, it is not.62 Like so many of our everyday courtesies, it is a kind of democratization of what was once a habit of feudal deference: the insistence on treating absolutely everyone the way that one used only to have to treat a lord or similar hierarchical superior.

Perhaps this is not so in every case. Imagine we are on a crowded bus, looking for a seat. A fellow passenger moves her bag aside to clear one; we smile, or nod, or make some other little gesture of acknowl¬ edgment. Or perhaps we actually say “Thank you.” Such a gesture is simply a recognition of common humanity: we are acknowledging that the woman who had been blocking the seat is not a mere physical obstacle but a human being, and that we feel genuine gratitude toward someone we will likely never see again. None of this is generally true when one asks someone across the table to “please pass the salt,” or when the postman thanks you for signing for a delivery. We think of these simultaneously as meaningless formalities and as the very moral basis of society. Their apparent unimportance can be measured by the

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fact that almost no one would refuse, on principle, to say “please” or “thank you” in just about any situation — even those who might find it almost impossible to say “I’m sorry” or “I apologize.”

In fact, the English “please” is short for “if you please,” “if it pleases you to do this” — it is the same in most European languages (French si il vous plait, Spanish por favor). Its literal meaning is “you are under no obligation to do this.” “Hand me the salt. Not that I am saying that you have to!” This is not true; there is a social obligation, and it would be almost impossible not to comply. But etiquette largely consists of the exchange of polite fictions (to use less polite language, lies). When you ask someone to pass the salt, you are also giving them an order; by attaching the word “please,” you are saying that it is not an order. But, in fact, it is.

In 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 means “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 bene¬ factor’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

Decoding the tacit calculus of debt (“I owe you one,” “No, you don’t owe me anything,” “Actually, if anything, it’s me who owes you,” as if inscribing and then scratching off so many infinitesimal entries in an endless ledger) makes it easy to understand why this sort of thing is often viewed not as the quintessence of morality, but as the quintes¬ sence of middle-class morality. True, by now middle-class sensibilities dominate society. But there are still those who find the practice odd. Those at the very top of society often still feel that deference is owed primarily to hierarchical superiors and find it slightly idiotic to watch postmen and pastry cooks taking turns pretending to treat each other like little feudal lords. At the other extreme, those who grew up in what in Europe are called “popular” environments — small towns, poor neighborhoods, anyplace where there is still an assumption that people who are not enemies will, ordinarily, take care of one another — will

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often find it insulting to be constantly told, in effect, that there is some chance they might not do their job as a waiter or taxi driver correctly, or provide houseguests with tea. In other words, middle-class etiquette insists that we are all equals, but it does so in a very particular way. On the one hand, it pretends that nobody is giving anybody orders (think here of the burly security guard at the mall who appears before someone walking into a restricted area and says, “Can I help you?”); on the other, it treats every gesture of what I’ve been calling “baseline communism” as if it were really a form of exchange. As a result, like Tiv neighborhoods, middle-class society has to be endlessly recreated, as a kind of constant flickering game of shadows, the criss-crossing of an infinity of momen¬ tary debt relations, each one almost instantly cancelled out.

All of this is a relatively recent innovation. The habit of always saying “please” and “thank you” first began to take hold during the commercial revolution of the sixteenth and seventeenth centuries — among those very middle classes who were largely responsible for it. It is the language of bureaus, shops, and offices, and over the course of the last five hundred years it has spread across the world along with them. It is also merely one token of a much larger philosophy, a set of assumptions of what humans are and what they owe one another, that have by now become so deeply ingrained that we cannot see them.

I I I I I

Sometimes, at the brink of a new historical era, some prescient soul can see the full implications of what is beginning to happen — sometimes in a way that later generations can’t. Let me end with a text by such a person. In Paris, sometime in 1540s, Francois Rabelais — lapsed monk, doctor, legal scholar — composed what was to become a famous mock eulogy, which he inserted in the third book of his great Gargantua and Pantagruel, and which came to be known as “In Praise of Debt.”

Rabelais places the encomium in the mouth of one Panurge, a wandering scholar and man of extreme classical erudition who, he ob¬ serves, “knew sixty-three ways of making money — the most honorable and most routine of which was stealing.”65 The good-natured giant Pantagruel adopts Panurge and even provides him with a respectable income, but it bothers him that Panurge continues to spend money like water and remains up to his ears in debt. Wouldn’t it be better, Pan¬ tagruel suggests, to be able to pay his creditors?

Panurge responds with horror: “God forbid that I should ever be out of debt!” Debt is, in fact, the very basis of his philosophy:

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Always owe somebody something, then he will be forever pray¬ ing God to grant you a good, long and blessed life. Fearing to lose what you owe him, he will always be saying good things about you in every sort of company; he will be constantly ac¬ quiring new lenders for you, so that you can borrow to pay him back, filling his ditch with other men’s spoil.66

Above all else, they will always be praying that you come into money. It’s like those ancient slaves destined to be sacrificed at their masters’ funerals. When they wished their master long life and good health, they genuinely meant it! What’s more, debt can make you into a kind of god, who can make something (money, well-wishing creditors) out of absolutely nothing.

Worse still: I give myself to bonnie Saint Bobelin if all my life I have not reckoned debts to be, as it were, a connection and colligation between Heaven and Earth (uniquely preserving the lineage of Man without which, I say, all human beings would soon perish) and perhaps to be that great World Soul which, according to the Academics, gives life to all things.

That it really is so, evoke tranquilly in your mind the Idea and Form of a world — take if you like the thirtieth of the worlds imagined by Metrodorus — in which there were no debt¬ ors or lenders at all. A universe sans debts! Amongst the heav¬ enly bodies there would be no regular course whatsoever: all would be in disarray. Jupiter, reckoning that he owed no debt to Saturn, would dispossess him of his sphere, and with his Ho¬ meric chain hold in suspension all the Intelligences, gods, heav¬ ens, daemons, geniuses, heroes, devils, earth, sea and all the elements . . . The Moon would remain dark and bloody; why should the Sun share his light with her? He is under no obliga¬ tion. The Sun would never shine on their Earth; the heavenly bodies would pour no good influences down upon it.

Between the elements there will be no mutual sharing of qualities, no alternation, no transmutation whatsoever, one will not think itself obliged to the other; it has lent it nothing.

From earth no longer will water be made, nor water trans¬ muted into air; from air fire will not be made, and fire will not warm the earth. Earth will bring forth nothing but monsters, Titans, giants. The rain will not rain, the light will shed no light, the wind will not blow, and there will be no summer, no autumn, Lucifer will tear off his bonds and, sallying forth from deepest Hell with the Furies, the Vengeances and the horned

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devils, will seek to turf the gods of both the greater and lesser nations out from their nests in the heavens.

And what’s more, if human beings owed nothing to one another, life would “be no better than a dog-fight” — a mere unruly brawl.

Amongst human beings none will save another; it will be no good a man shouting Help! Fire! I’m drowning! Murder! No¬ body will come and help him. Why? Because he has lent noth¬ ing: and no one owes him anything. No one has anything to lose by his fire, his shipwreck, his fall, or his death. He has lent nothing. And: he would lend nothing either hereafter.

In short, Faith, Hope and Charity would be banished from this world.

Panurge — a man without a family, alone, whose entire calling in life was getting large amounts of money and then spending it — serves as a fitting prophet for the world that was just beginning to emerge. His perspective of course is that of a wealthy debtor — not one liable to be trundled off to some pestiferous dungeon for failure to pay. Still, what he is describing is the logical conclusion, the reductio ad absur- dum, which Rabelais as always lays out with cheerful perversity, of the assumptions about the world as exchange slumbering behind all our pleasant bourgeois formalities (which Rabelais himself, incidentally, detested — the book is basically a mixture of classical erudition and dirty jokes).

And what he says is true. If we insist on defining all human interac¬ tions as matters of people giving one thing for another, then any ongo¬ ing 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 hu¬ man would have no significance; we would all become isolated planets who couldn’t even be counted on to maintain our proper orbits.

Pantagruel will have none of it. His own feelings on the matter, he says, can be summed up with one line from the Apostle Paul: “Owe no man anything, save mutual love and affection.”67 Then, in an ap¬ propriately biblical gesture, he declares, “From your past debts I shall free you.”

“What can I do but thank you?” Panurge replies.

Chapter Six

GAMES WITH SEX AND DEATH

WHEN WE RETURN to an examination of conventional economic history, one thing that jumps out is how much has been made to dis¬ appear. Reducing all human life to exchange means not only shunting aside all other forms of economic experience (hierarchy, communism), but also ensuring that the vast majority of the human race who are not adult males, and therefore whose day-to-day existence is relatively difficult to reduce to a matter of swapping things in such a way as to seek mutual advantage, melt away into the background.

As a result, we end up with a sanitized view of the way actual business is conducted. The tidy world of shops and malls is the quintes¬ sential middle-class environment, but at either the top or the bottom of the system, the world of financiers or of gangsters, deals are often made in ways not so completely different from ways that the Gunwinggu or Nambikwara make them — at least in that sex, drugs, music, extrava¬ gant displays of food, and the potential for violence do often play parts.

Consider the case of Neil Bush (George W.’s brother) who, during divorce proceedings with his wife, admitted to multiple infidelities with women who, he claimed, would mysteriously appear at his hotel-room door after important business meetings in Thailand and Hong Kong.

“You have to admit it’s pretty remarkable,” remarked one of his wife’s attorneys, “for a man to go to a hotel-room door and open it and have a woman standing there and have sex with her.”

“It was very unusual,” Bush replied, admitting however that this had happened to him on numerous occasions.

“Were they prostitutes?”

“I don’t know.”1

In fact, such things seem almost par for the course when really big money comes into play.

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In this light, the economists’ insistence that economic life begins with barter, the innocent exchange of arrows for teepee frames, with no one in a position to rape, humiliate, or torture anyone else, and that it continues in this way, is touchingly utopian.

As a result, though, the histories we tell are full of blank spaces, and the women in them seem to appear out of nowhere, without ex¬ planation, much like the Thai women who appeared at Bush’s door. Recall the passage cited in Chapter Three, from numismatist Philip Grierson, about money in the barbarian law codes:

Compensation in the Welsh laws is reckoned primarily in cattle and in the Irish ones in cattle or bondmaids (cumal), with con¬ siderable use of precious metals in both. In the Germanic codes it is mainly in precious metal . . }

How is it possible to read this passage without immediately stop¬ ping at the end of the first line? “Bondmaids”? Doesn’t that mean “slaves?” (It does.) In ancient Ireland, female slaves were so plentiful and important that they came to function as currency. How did that happen? And if we are trying to understand the origins of money, here, isn’t the fact that people are using one another as currency at all interesting or significant?3 Yet none of the sources on money remark much on it. It would seem that by the time of the law codes, slave girls were not actually traded, but just used as units of account. Still, they must have been traded at some point. Who were they? How were they enslaved? Were they captured in war, sold by their parents, or reduced to slavery through debt? Were they a major trade item? The answer to all these questions would seem to be yes, but it’s hard to say more because the history remains largely unwritten.4

Or let’s return to the parable of the ungrateful servant. “Since he was not able to pay, the master ordered that he and his wife and his children and all that he had be sold to repay the debt.” How did that happen? Note that we’re not even speaking of debt service here (he is already his creditor’s servant), but outright slavery. How did a man’s wife and children come to be considered no different than his sheep and crockery — as property to be liquidated on the occasion of default? Was it normal for a man in first-century Palestine to be able to sell his wife? (It wasn’t.)5 If he didn’t own her, why was someone else allowed to sell her if he couldn’t pay his debts?

The same could be asked of the story in Nehemiah. It’s hard not to empathize with the distress of a father watching his daughter taken

GAMES WITH SEX AND DEATH

129

off by strangers. On the other hand, one might also ask: Why weren’t they taking him ? The daughter hadn’t borrowed any money.

It’s not as if it is ordinary for fathers in traditional societies to be able to sell their children. This is a practice with a very specific his¬ tory: it appears in the great agrarian civilizations, from Sumer to Rome to China, right around the time when we also start to see evidence of money, markets, and interest-bearing loans; later, more gradually, it also appears in those surrounding hinterlands that supplied those civilizations with slaves.6 What’s more, if we examine the historical evidence, there seems good reason to believe that the very obsession with patriarchal honor that so defines “tradition” in the Middle East and Mediterranean world itself arose alongside the father’s power to alienate his children — as a reaction to what were seen as the moral per¬ ils of the market. All of this is treated as somehow outside the bounds of economic history.

Excluding all this is deceptive not only because it excludes the main purposes to which money was actually put in the past, but because it doesn’t give us a clear vision of the present. After all, who were those Thai women who so mysteriously appeared at Neil Bush’s hotel door? Almost certainly, they were children of indebted parents. Likely as not, they were contractual debt peons themselves.7

Focusing on the sex industry would be deceptive, though. Then as now, most women in debt bondage spend the vast majority of their time sewing, preparing soups, and scouring latrines. Even in the Bible, the admonition in the Ten Commandments not to “covet thy neighbor’s wife” clearly referred not to lust in one’s heart (adultery had already been covered in commandment number seven), but to the prospect of taking her as a debt-peon — in other words, as a servant to sweep one’s yard and hang out the laundry.8 In most such matters, sexual exploitation was at best incidental (usually illegal, sometimes practiced anyway, symbolically important.) Again, once we remove some of our usual blinders, we can see that matters have changed far less, over the course of the last five thousand years or so, than we really like to think.

These blinders are all the more ironic when one looks at the anthro¬ pological literature on what used to be called “primitive money” — that is, the sort one encounters in places where there are no states or markets — whether Iroquois wampum, African cloth money, or Solo¬ mon Island feather money, and discovers that such money is used

130

DEBT

almost exclusively for the kinds of transactions that economists don’t like to have to talk about.

In fact, the term “primitive money” is deceptive for this very rea¬ son, since it suggests that we are dealing with a crude version of the kind of currencies we use today. But this is precisely what we don’t find. Often, such currencies are never used to buy and sell anything at all.9 Instead, they are used to create, maintain, and otherwise reor¬ ganize relations between people: to arrange marriages, establish the paternity of children, head off feuds, console mourners at funerals, seek forgiveness in the case of crimes, negotiate treaties, acquire followers — almost anything but trade in yams, shovels, pigs, or jewelry.

Often, these currencies were extremely important, so much so that social life itself might be said to revolve around getting and disposing of the stuff. Clearly, though, they mark a totally different conception of what money, or indeed an economy, is actually about. I’ve decided therefore to refer to them as “social currencies,” and the economies that employ them as “human economies.” By this I mean not that these societies are necessarily in any way more humane (some are quite hu¬ mane; others extraordinarily brutal), but only that they are economic systems primarily concerned not with the accumulation of wealth, but with the creation, destruction, and rearranging of human beings.

Historically, commercial economies — market economies, as we now like to call them — are a relative newcomer. For most of human history, human economies predominated. To even begin to write a genuine history of debt, then, we have to start by asking: What sort of debts, what sort of credits and debits, do people accumulate in human economies? And what happens when human economies begin to give away to or are taken over by commercial ones? This is another way of asking the question, “How do mere obligations turn into debts?” — but it means not just asking the question in the abstract, but examining the historical record to try to reconstruct what actually did happen.

This is what I will do over the course of the next two chapters. First I will look at the role of money in human economies, then de¬ scribe what can happen when human economies are suddenly incorpo¬ rated into the economic orbits of larger, commercial ones. The African slave trade will serve as a particularly catastrophic case in point. Then, in the next chapter, I will return to the first emergence of commercial economies in early civilizations of Europe and the Middle East.

GAMES WITH SEX AND DEATH

131

Money as Inadequate Substitute

The most interesting theory of the origin of money is the one recent¬ ly put forward by a French economist-turned-anthropologist named Philippe Rospabe. While his work is largely unknown in the English- speaking world, it’s quite ingenious, and it bears directly on our prob¬ lem. Rospabe’s argument is that “primitive money” was not originally a way to pay debts of any sort. It’s a way of recognizing the existence of debts that cannot possibly be paid. His argument is worth consider¬ ing in detail.

In 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 “bride- price”: 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 women, 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 real signifi¬ cance 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.10

The anthropologists ended up winning the argument, and “bride- price” was dutifully redubbed “bridewealth.” But they never really an¬ swered 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 purchas¬ ing 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 . con¬ tract? According to Rospabe, it’s none of these. The whale tooth, how¬ ever valuable, is not a form of payment. It is really an acknowledgment

132

DEBT

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.

There are places where suitors say this quite explicitly. Consider the Tiv of Central Nigeria, who we have already met briefly in the last chapter. Most of our information on the Tiv comes from mid-century, when they were still under British colonial rule." Everyone at that time insisted that a proper marriage should take the form of an exchange of sisters. One man gives his sister in marriage to another, that man marries the sister of his newfound brother-in-law. This is the perfect marriage because the only thing one can really give in exchange for a woman is another woman,.

Obviously, even if every family had exactly equal numbers of brothers and sisters, things couldn’t always work this neatly. Say I marry your sister but you don’t want to marry mine (because, say, you don’t like her, or because she’s only five years old). In that case, you become her “guardian,” which means you can claim the right to dispose of her in marriage to someone else — for instance, someone whose sister you actually do wish to marry. This system quickly grew into a complex system in which most important men became guard¬ ians of numerous “wards,” often scattered over wide areas; they would swap and trade them and in the process accumulate numerous wives for themselves, while less-fortunate men were only able to marry late in life, or not at all.12

There was one other expedient. The Tiv at that time used bundles of brass rods as their most prestigious form of currency. Brass rods were only held by men, and never used to buy things in markets (mar¬ kets were dominated by women); instead, they were exchanged only for things that men considered of higher importance: cattle, horses, ivory, ritual titles, medical treatment, magical charms. It was possible, as one Tiv ethnographer, Akiga Sai, explains, to acquire a wife with brass rods, but it required quite a lot of them. You would need to give two or three bundles of them to her parents to establish yourself as a suitor; then, when you did finally make off with her (such marriages were always first framed as elopements), another few bundles to as¬ suage her mother when she showed up angrily demanding to know what was going on. This would normally be followed by five more to get her guardian to at least temporarily accept the situation, and

GAMES WITH SEX AND DEATH

133

more still to her parents when she gave birth, if you were to have any chance of their accepting your claims to be the father of her children. That might get her parents off your back, but you’d have to pay off the guardian forever, because you could never really use money to acquire the rights to a woman. Everyone knew that the only thing you can legitimately give in exchange for a woman is another woman. In this case, everyone has to abide by the pretext that a woman will someday be forthcoming. In the meantime, as one ethnographer succinctly puts it, “the debt can never be fully paid.”13

According to Rospabe, the Tiv are just making explicit the un¬ derlying logic of bridewealth everywhere. The suitor presenting bride¬ wealth is never paying for a woman, or even for the rights to claim her children. That would imply that brass rods, or whale’s teeth, cowrie shells, or even cattle are somehow the equivalent of a human being, which by the logic of a human economy is obviously absurd. Only a human could ever be considered equivalent to another human. All the more so since, in the case of marriage, we are speaking of something even more valuable than one human life: we are speaking of a human life that also has the capacity to generate new lives.

Certainly, many of those who pay bridewealth are, like the Tiv, quite explicit about all this. Bridewealth money is presented not to settle a debt, but as a kind of acknowledgment that there exists a debt that cannot be settled by means of money. Often the two sides will maintain at least the polite fiction that there will, someday, be a recompense in kind: that the suitor’s clan will eventually provide one of its own women, perhaps even that very woman’s daughter or grand¬ daughter, to marry a man of the wife’s natal clan. Or maybe there will be some arrangement about the disposition of her children; perhaps her clan will get to keep one for itself. The possibilities are endless.

Money, then, begins, as Rospabe himself puts it, “as a substitute for life.”14 One might call it the recognition of a life-debt. This, in turn, ex¬ plains why it’s invariably the exact same kind of money that’s used to arrange marriages that is also used to pay wergeld (or “bloodwealth” as it’s sometimes also called): money presented to the family of a mur¬ der victim so as to prevent or resolve a blood-feud. Here the sources are even more explicit. On the one hand, one presents whale teeth or brass rods because the murderer’s kin recognize they owe a life to the victim’s family. On the other, whale teeth or brass rods are in no sense, and can never be, compensation for the loss of a murdered relative.

134

DEBT

Certainly no one presenting such compensation would ever be foolish enough to suggest that any amount of money could possibly be the “equivalent” to the value of someone’s father, sister, or child.

So here again, money is first and foremost an acknowledgment that one owes something much more valuable than money.

In the case of a blood-feud, both parties will also be aware that even a revenge killing, while at least it conforms to the principle of a life for a life, won’t really compensate for the victim’s grief and pain either. This knowledge allows for some possibility of settling the mat¬ ter without violence. But even here, there is often a feeling that, as in the case of marriage, the real solution to the problem is simply being temporarily postponed.

An illustration might be helpful. Among the Nuer, there is a special class of priestly figures who specialize in mediating feuds, referred to in the literature as “leopard-skin chiefs.” If one man murders another, he will immediately seek out one of their homesteads, since such a home¬ stead is treated as an inviolate sanctuary: even the dead man’s family, who will be honor-bound to avenge the murder, will know that they cannot enter it, lest terrible consequences ensue. According to Evans- Pritchard’s classic account, the chief will immediately start trying to negotiate a settlement between the murderer and victim’s families, a delicate business, because the victim’s family will always first refuse:

The chief first finds out what cattle the slayer’s people possess and what they are prepared to pay in compensation. ... He then visits the dead man’s people and asks them to accept cattle for the life. They usually refuse, for it is a point of honor to be obstinate, but their refusal does not mean that they are unwill¬ ing to accept compensation. The chief knows this and insists on their acceptance, even threatening to curse them if they do not give way . . ,15

More-distant kin weigh in, reminding everyone of their responsi¬ bility to the larger community, of all the trouble that an outstanding feud will cause to innocent relatives, and after a great show of holding out, insisting that it is insulting to suggest that any number of cattle could possibly substitute for the life of a son or brother, they will usu¬ ally grudgingly accept.16 In fact, even once the matter has technically been settled, it really hasn’t — it usually takes years to assemble the cattle, and even once they have been paid, the two sides will avoid each other, “especially at dances, for in the excitement they engender, merely bumping into a man whose kinsman has been slain may cause

GAMES WITH SEX AND DEATH

135

a fight to break out, because the’ offense is never forgiven and the score must finally be paid with a life.”17

So it’s much the same as with bridewealth. Money does not wipe out the debt. One life can only be paid for with another. At best those paying bloodwealth, by admitting the existence of the debt and insist¬ ing that they wish they could pay it, even though they know this is impossible, can allow the matter to be placed permanently on hold.

Halfway around the world, one finds Lewis Henry Morgan de¬ scribing the elaborate mechanisms set up by the Six Nations of the Iroquois to avoid precisely this state of affairs. In the event one man killed another,

Immediately on the commission of a murder, the affair was taken up by the tribes to which the parties belonged, and stren¬ uous efforts were made to effect a reconciliation, lest private retaliation should lead to disastrous consequences.

The first council ascertained whether the offender was will¬ ing to confess his crime, and to make atonement. If he was, the council immediately sent a belt of white wampum, in his name, to the other council, which contained a message to that effect. The latter then endeavored to pacify the family of the deceased, to quiet their excitement, and to induce them to ac¬ cept the wampum as condonation.18

Much 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 stan¬ dard fee for bloodwealth. But it was also the standard rate of bride¬ wealth. The logic was this: if a man had been murdered before he was

136

DEBT

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. In practice, she was usually paired off with one of the victim’s brothers, but this was not particularly important; it didn’t really matter too much who impregnated her, since he would be in no sense the father of her' children. Her children would be con¬ sidered the children of the victim’s ghost — and as a result, any boys among them were seen as having been born with a particular commit¬ ment to someday avenge his death.20

This latter is unusual. But Nuer appear to have been unusually stubborn about feuds. Rospabe provides examples from other parts of the world that are even more telling. Among North African Bedouins, for instance, it sometimes happened that the only way to settle a feud was for the killer’s family to turn over a daughter, who would then marry the victim’s next of kin — his brother, say. If she bore him a male child, the boy was given the same name as his dead uncle and consid¬ ered to be, at least in the broadest sense, a substitute for him.21 The 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 o

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