>> Male Presenter: Welcome everybody on behalf
of Authors@Google to another Authors@Google
talk.
Today's guest David Graeber, his new book
DEBT: The First 5,000 Years of it.
Please welcome David Graeber.
[applause]
>>David Graeber: Thank you, thanks so much
for having me here.
I guess I wanted to talk a little bit about
how I came to write the book.
It's an odd book, in a way, because it starts
from trying to grapple with kind of a moral
and political problem.
Just what is this hold that the idea of debt
has over people's imaginations, that morality
itself comes to be thought of as a matter
of paying one's debts?
I guess I was first really confronted with
it, started to conceive the notion of writing
this book when I was, for some reason or another,
I was at a garden party at Westminster Abbey
and won't go into how I got there, but it
was a curious experience.
The priest was a very nice man named Father
Graeme was sort of introducing me to everyone
there but he had this very annoying way of
doing it, he would sort of bring me up to
people and say, "Hello I'd like you to meet
David Graeber.
He's an anarchist," [chuckles] which kind
of limited conversations --
[laughter]
possibilities a lot.
But after a while he introduced me to this
person who he said was I'd have a lot in common
with, activist lawyer who's involved in a
lot of community work and various things like
that.
So I chatted with her and she was talking
about her activism and asked me about mine
and I was talking about campaigns that I'd
been involved with, involved in the Global
Justice Movement for many years, about the
IMF Structural Adjustment Policies and our
effects on various parts of the world.
I had spent two years in Madagascar and Madagascar
had undergone all sorts of IMF structural
adjustment over the years with various confusing
effects; some of them were actually kind of
ironically quite good like the state basically
sort of pulled up stakes and left large parts
of the countryside because they figure they
weren't getting any taxes out of the countryside
anyway and people sort of managing their own
affairs completely autonomously and that was
cool.
But they also did things like withdraw support
for mosquito eradication programs, the idea
being IMF would set the terms for debt rescheduling
and demand various budget cuts.
In this case, there was a program that had
been put in 50 years before to wipe out malaria
in the highlands which had been very successful,
people had all lost their immunity but they
couldn't afford to keep it up anymore when
they had to cut the budget.
And as a result --
[pause]
I believe, 15,000 people died, 10 or 15 depending
on the accounts because the epidemic came
back, everyone had lost their immunity.
At least 5,000 of those were children and
this had happened right before I came to Madagascar.
A lot of people were naturally quite devastated
by the experience.
And I was telling this story and she was very
sympathetic and she said, "Well, yes, but
what were, as an activist what were you proposing
to do about this?
And I said, "Well we were involved in the
Drop the Debt campaign this thing called Jubilee
2000,' I said the debt of the global south
should be forgiven.
Her reaction was --
[pause]
somewhat shocked and mortified.
She was like, "Well, they borrowed the money,
I mean, surely people have to pay their debts."
There was something about the way it was just
so commonsensical and as an activist your
first reaction when you say this you say,
"Uh-oh, that conversation, alright.
And I thought this was a friend.
Okay, wait, which one do I do?
There's like 12 different responses you can
do.
Do I say, "Well they didn't really borrow
the money, some dictator who put it in a Swiss
bank account."
Do you say, "Well, actually, they paid the
money about 20 times over at this point just
through the miracle of compounded interest;
they'll never get out."
There's a million different responses.
Actually, the response I think I came up with,
what would be most effective in that context
was the economical one which is if profits
are your reward for taking risk, well, you're
supposed to be taking a risk.
So I mean the whole point of a financial system
is to guide money towards wise investments
and if you have a system like the IMF imposed
on most of the world where you're going to
get paid back no matter what you do, there's
absolutely no incentive to make intelligent
loans.
But what really struck me was that sort of
commonsensical like, "You have to pay your
debts."
I mean, I thought, "Well, this is a very nice
person she just heard a story which involved
7,000 dead babies how, what other circumstance
would she try to justify killing 7,000 babies?”
Probably none.
So what is it about the idea of debt that
it can justify things in peoples' minds that
you'd almost never –
[pause]
imagine defending otherwise?
And it set me off and I started thinking about
debt itself; the history of debt, what is
debt, where does it come from, how long have
we been thinking in these terms, how long
has it had this moral power?
And I quickly, when I started doing the initial
research, discovered a number of rather surprising
things.
One of them was that no one has ever written
the history of debt which is kind of shocking
because really there aren't that many things
that no one's ever written a history of.
Think about it, people have written histories
of salt, people have written histories of
different types of fish.
There's a French historian who wrote a history
of shit, it's actually in a --
[laughter]
human waste disposal over the years.
[laughs] Pretty much anything you can think
of there is a guy who's written a history
of that.
How is it that no one's ever written a history
of debt?
And people have written lots of histories
of money, but the histories of money almost
invariably turn out when you look at it to
be histories of coinage which itself is interesting
when you consider that most transactions over
world history have been credit transactions.
And you can find histories of credit but it's
not exactly the same thing.
So here's this thing which pervades every
aspect of our lives.
Modern nations run on deficit financing; consumer
economies run on debt; international relationships
are all about debt.
Yet no one's quite sure what it is and no
one has written a history of the phenomena.
So I started to work and one of the first
things I found was that most of our sort of
basic common sense reigning assumptions about
this are completely wrong.
The other thing I found out is that this moral
ambivalence, which was interesting, that sort
of commonsensical but of course you have to
pay your debt and then the argument but actually
really no that doesn't make sense.
That conversation has been happening for about
5,000 years itself.
Throughout the history of debt, conversations
like that keep happening.
It seems that there's almost no time and place
where you can't find people, on the one hand,
treating the payment of debts as simple morality
or even treating simple morality as the paying
of debts.
[pause]
But at the same time, then concluding there's
something very wrong with this and they need
to imagine some other way to think of it but
it not being clear what that is.
[pause]
I could multiply examples endlessly but one
or two will just give you the idea: Plato's
Republic.
Plato's Republic begins, "What is justice?"
It's the founding work of Western political
philosophy, right?
And from wealthy arms manufacturer, Kefalos,
who's name actually means capital.
He says, "That's simple just pay your debts
and don't lie," and that's justice.
Socrates blows that one out of the water right
away, of course, he says, "Well, okay, some
guy lends me his sword and then he goes violently
insane and wants it back to kill people.
Like, do I give it back?
Of course not and probably I'll make up some
lie as to why I can't."
So they start with that and so right well
right not that something else, maybe I mean
it metaphorically.
And the rest of the book is basically the
okay not that maybe something else then.
But that --
[pause]
it's debt right and no actually it's not.
[laughter]
[chuckles] That shows up over and over and
over again.
In a way all the world religions start that
way too.
You have the Brahmans, sort of first grade
theological text of Hinduism after the Rig
Veda, they're discussing debt and debt and
sin are actually the same, debt and guilt
and sin are really the same word in the Sanskrit.
So they start with this idea of cosmic debt:
what is life, life is a debt we owe to the
gods.
So we owe our lives to the gods, we pay interest
in the form of animal sacrifice and other
rituals and then gradually we pay the principal
back when we die.
So they pose this as this sort of, human existence
itself is a debt, all morality is debt.
And when they, but as soon as they start extending
it, it becomes clear that that's not really
what they mean because they say, "Well you
also have a existential debt not only to the
gods and to the cosmos but you have an existential
debt to your parents.
How do you pay them back?
You become a parent.
You owe a debt to the sages who created wisdom
like you're reading now.
How do you pay that back?
You become a sage; you learn things.
You owe a debt to humanity as a whole for
making your life possible.
How do you pay back that, you're hospitable
to strangers.
But in every case what you're doing is you
are undermining the basis for saying there
even is a debt, you're not paying it back
'cause after all, as in the example of parents,
somebody lends you money and you give the
money to someone else, you're not actually
paying it back.
But what you are doing is you owe a debt to
your parents and then you become a parent
so your annihilating the difference.
You owe a debt to the sages you become a sage;
you owe a debt to humanity you become humane.
[pause]
Could that apply to the cosmos?
Well, yes, according to most Hindu scripture
that's exactly what's happening because you
are the cosmos.
And if you think about it the idea that you
owe a debt to the cosmos, and this crops up
again and again, debt to nature, debt to society,
debt to these huge institutions larger than
yourself, is kind of absurd because a debt
is a business transaction.
And a business transaction is by definition
an arrangement between two legally equivalent
entities; they make a deal.
Now how would you enter into a business transaction
with the entire universe, everything that
is or has ever been including yourself?
You kinda make a deal with them.
Well, it's absurd.
The only way to actually sort of undo the
debt is what they're saying you realize and
rituals if you're doing them right is that
you are the cosmos, there is no difference.
So there's no basis to say there's a debt
at all.
So again it's the same thing: you start morality
is just debt, everything is a debt but they
say it in such a way that once you figure
out what they're really saying, they're really
saying, "No, actually it's not; debt is absurd."
Same thing happens in the Bible.
In Aramaic –
[pause]
the word for debt and sin is also the same
word.
Actually the Lord's Prayer which we always
remember through the Anglican translation
which is, "Forgive us our trespasses just
as we forgive those who trespass against us,"
sort of translated into this odd private property
terms.
But the original Aramaic and the original
John Wycliffe translation is debt.
"Forgive us our debts just as we forgive those
who owe us money."
But, of course, there's kind of a message
there right because we don't actually forgive
those who owe us money generally speaking.
So in a way it's a way of saying like you
are a sinner, [chuckles] you don't deserve
anything, but, in fact, grace will come and
[chuckles] you'll be forgiven.
But so what is sacred isn't actually paying
debts it's forgiveness of debts which was
a tradition going back to ancient Mesopotamia
and debt forgiveness and the biblical to believe
which is adopted from that where periodically
debts are canceled.
And that is a divine act.
So what's divine is not paying debts, what's
divine is forgiving debts; cancellation.
So over and over you have that same situation
where people start with an assumption that
morality and debt are the same and they, immediately,
say except really they aren't and sort of
cast around for some other basis on which
to think of a universal morality, often having
a great deal of difficulty in doing so.
It's even more complicated because when you
do think of debt as sin --
[pause]
there's a question of who is the sinner.
This crops up over and over again, too, just
about everywhere.
The person who borrows the money has probably
done something wrong, especially if they haven't
paid it right away; the person who lent is
not doing much better.
In fact one thing that happens over and over
again in so many different traditions is you
find that borrowing money or --
[pause]
they frame morality as the obligation of the
borrower to pay it back.
So obligation and debt are considered the
same thing; morality is just doing your obligations
as paying your debts.
On the other hand in almost every one of those
traditions, money lenders are assumed to be
evil.
Well, it's kinda hard to square those.
And sometimes in the same text they'll just
be sort of jockeying back and forth trying
to figure out who's the bad guy.
There's a great Buddhist story from medieval
Japan I use in the first chapter because just
brings it home some clearly, it's kind of
a case of premature reincarnation.
There is a Buddhist monk telling this story
about some book about strange events in Japan
in my day, which is maybe like 700 A.D.
There's some woman who's wife of the governor
is notorious local loan shark and she terrorizes
people and is always chasing them down and
were fleeing the province in droves from her
depredation.
And she dies and after three days of saying
prayer over the body something horror happened,
the coffin opens and she jumps out but she's
half an ox and this horrible monster sort
of lingers for a few days and the family panics
and is trying to give back all the money that
they'd extracted from people hoping she'll
just mercifully die and the whole episode
will be over, which eventually she does.
But the monk is reflecting on this and he
says, "Well, you know it says in the Sutras
that if you owe somebody money and you don't
pay, well, now this is bad because you're
in mortal danger you could be reborn as an
ox in their barn."
It's what happens to debtors a lot.
But he says, "I guess, well, if somebody owes
you money and you're really giving them a
hard time then you could get reborn an ox
in their barn."
And that must be what was about to happen
to her but she was so bad it wasn't even clear
who's ox she was gonna be born in so she kind
of turned into this monster.
I thought about this and I thought, well,
yeah, a perfect example like because nobody's,
you're not gonna be shakin' somebody down
unless they didn't pay.
But if they didn't pay then they're in danger
of being born an ox in your barn.
So, like, who's gonna get, you can't both
get born an ox in the other guy's barn.
[chuckles] Somebody's gotta be worse so who
decides?
There's some sort of Karmic balance, its touch
and go, either one could actually end up an
ox.
And I think that [chuckles] really brings
home the problem you always have in debt:
one party is in moral peril definitely, the
other one probably.
And when you imagine all human relations as
exchange, that's what crops up.
[pause]
There's a terrible ambivalence there for about
the very nature of human sociality.
Yet sometimes people do it in a positive way.
I should point out that one of the points
I make in the book is that human relations
are not all exchange, there are many different
moral registers in which we interact with
one another and exchange is just one.
But when you have exchange, exchange is a
relationship between two equal partners where
they, based on reciprocity, they should actually
give each other an equivalent, maybe on the
spot, maybe over time.
If the transaction is not complete, there's
a debt, but once it is complete they're equal
once again and they walk away.
But the curious thing about that is it means
that you only –
[pause]
if you're working on the level of exchange,
then you only have relationships with one
another when the exchange is incomplete in
which case one party is definitely to blame
because they haven't paid back what they owe,
the other one might well be.
It implies that sociality itself, human relations
only exist when somebody's done something
wrong.
If you have deeply commercial philosophies
of life often that's the conclusion.
Other places debt becomes good, it becomes
the basis of sociality.
It's very, very common in a lot of places
-- it's a great story always like sort of
brings us home about these people called the
Tiv who live in Central Nigeria and this anthropologist
named Laura Bohannan who wrote up of her experiences
when she first did field work there.
So she shows up, gets a house, doesn't really
know the language very well.
People immediately start appearing with gifts
and somebody'll bring a little basket of okra,
somebody'll bring some fish, some grain, potatoes,
and she doesn't know what to do, of course,
she's an anthropologist, she gets out her
little notebook and writes everything down;
her living room gradually filling up with
baskets and various types of goods.
And eventually someone takes pity on her and
says, "Okay, look this is the deal.
Those are gifts but you have to give people
something back.
Figure out what they're worth, but the key
is you can't give them back something of the
exact same value of what they just gave you.
So that okra's worth three shillings.
Give them something worth two shillings or
give them something worth four shillings.
Never give them something worth three shillings
because if you do you're saying, "I don't
want to have anything more to do with you.'"
So people have to be in each others' debt
just a little bit and that way you always
have an excuse to like, "Oh, by the way, I
still owe you a shilling."
So everybody has an excuse to see each other.
So in a way, sociality is dead, everybody
has to be just a little bit in debt to everybody
else.
And if you look at the way communities work
over the course of history where they do have
money very often that's what's like being
a neighborhood means.
Everybody's a little bit in debt to everybody
else.
Medieval England, I think somebody calculated
that 97 percent of all transactions in a typical
English village, and this is true through
to at least the 1700's, were by credit.
Partly there just isn't a lot of money floating
around, partly people don't like to use it
with neighbors.
As we'll see actual physical money is associated
with war, violence, soldiers, people you really
don't wanna hang out with, criminals.
People, nice people operate on credit and
trust.
So everybody's doing these credit transactions
and everybody's keeping track in their heads,
"Oh, I owe him five shillings, he owes him
three," and every six months to a year they
have what they call communal reckoning.
So, everybody sits down in a big circle and
they say, "Alright I owe you seven shillings,
he owes him seven shillings, he owes him,
he owes me, okay big circle we can cancel
that one out."
And they just do a bunch of loops and they
gradually whittle it down until they figure
out there's about three shillings left over
between this guy and that guy, what is actually
owed, and then somebody gives somebody a pig
--
[laughter]
some cheese [chuckles] whatever it might be
and they settle it and go back to zero again
and start.
And that's community, community means everybody
owes everybody something else, everybody remembers
what they owe and eventually they all settle
it and start over again.
Now, so in that sense, debt isn't a terrible
thing.
But there's always that shadow, like sin,
floating over it.
[pause]
And there's that terrible ambivalence, that
way of saying one party's guilty and the other
one might be.
Where does that come from?
And --
[pause]
when I began explaining this one of the first
things I looked at was the history of money
itself.
Because, we have to say, okay, what is a debt?
A debt is essentially a promise which you
can phrase in exactly quantifiable terms,
because you can quantify it it's impersonal,
if I, because it's impersonal, it's transferable.
So if I promise you that I will meet you at
five o'clock, you can't actually transfer
that to someone else normally speaking, I
guess, in some circumstances you could.
But a promise which is quantifiable, "I promise
to give you exactly this amount of things,"
you actually can turn over to someone else
and in way, according to many theories, that's
money actually is is a transferable promise
to render a certain amount of goods.
[pause]
One of the great questions is how that comes
about, why the need to quantify promises happens
or quantify them precisely.
And we've had a story about why this happens,
that you're readin' your basic Economic 101
textbook actually invented by Adam Smith in
1776, The Wealth of Nations, is the first
time you see someone really making the argument
in detail.
[coughs]
And it continues to be the story that everybody
knows and learns and they pick up somewhere
or another, that becomes common sense, it's,
and if you're, as an anthropologist, I must
say, that I have a kind of a pet peeve in
this respect because, well it's a professional
pet peeve on the part of anthropologists,
because this story was told over 200 years
ago --
[pause]
almost immediately, we started going out in
the world trying to find examples of people
who do it and we couldn't.
It's not true.
[laughs] But they never changed the textbooks.
We just can't get them to come up with a different
story.
But alright here's the story, you've all heard
it before.
Once upon a time people lived in villages
and they used to swap things, there was barter.
Say I wanted somebody's cow; well, I said,
"Alright hey I need a cow, tell you what I'll
give you 30 chickens for that cow."
And the guy's like, "Well, I don't know, 30's
not much, 40 chickens, 45, alright sold."
So you come to some sort of arrangement, swap,
go home.
But the problem is maybe the guy doesn't want
chickens, maybe you don't happen to have anything
he wants right now.
What happens?
Well, you can't make a deal, right?
So the only way out of this problem, as it
crops up more and more over time, is to settle
on something that everybody usually wants,
like gold for some reason; shiny metal but
it's kind of handy and it's pretty.
And there's a virtuous circle the moment you
start using it as a general equivalent, everybody
needs it all the time, it turns into money.
So barter's inconvenient, you get money, government
gets involved and starts stamping the stuff,
through uniform weights and quality, although
it started cheating all the time and debasing
the currency because governments are bad in
this version.
Gradually, you invent credit systems and it's
an evolutionary series: barter, money, credit,
securitized derivatives of whatnot are just
sort of the last link of the chain, it follows
logically.
Alright, so that's the story.
As I say there's one big problem we've been
scouring the world for over 200 years now
and we have never found a single community
where everyday transactions take the form
of "I'll give you 40 chickens for that cow."
They don't exist.
And Adam Smith himself had no way to know
this he was just speculating, but now we do
and they keep on telling this story.
I mean if you look at contemporary economic
textbooks, the old ones used to say, "Well
primitive people do this," and now that they
kinda know it's not true they don't wanna
stop so instead they say, "Well imagine you
didn't have money what would you have to do?
How would you get breakfast?
Well you'd have to barter wouldn't you?"
And they tell this story as a kind of parable
which is basically what it is.
There's an obvious reason, if you think about
it, there's obviously problem with this story,
why it wouldn't happen, which is you're taking
a Neolithic village here a bunch of people
who are neighbors and you are assuming that
they will only deal with each other with what
economists like to call the spot trade.
"Here, I'm gonna give you this, you're gonna
give me that," we walk away.
But, of course, why would they do that right?
I mean, they're neighbors.
If the guy doesn't want my chickens he knows
I'm gonna have something he wants because
I'm his neighbor, in fact, it's rather nice
to have your neighbor in your debt, it's useful
for all sorts of things.
So even if you take this imaginary scenario
here these two guys in a Neolithic village,
one wants a cow, what would really happen?
Well, in fact in many human societies it is
the case that if you praise somebody else's
possession it's almost impossible not to give
it to the person who praises it.
This is another one of those things which
has a very, very strange moral power; so much
so that you really can't break out of it.
I mean there's a great story I always tell
from New Zealand, a Maori story about a guy
named Te Ringa who is a sort of a notorious
glutton.
He rarely did much fishing himself, everybody
else in the neighborhood was a fisherman,
he would sort of walk up and down the beach
lookin' for people coming back from fishing
and check out their catch and say, "Oh looky
that's squid, oh I love squid, that's my favorite."
Or, "Wow that's a beautiful fish," and they
would be like, "Okay, here's a fish, okay,
here's a squid."
So [chuckles] they just have to give it to
him.
After about two years of this people got fed
up so they formed a war party and they killed
him.
[chuckles]
[laughter]
It was actually easier to just bash the guy's
head in than to say, "No, I'm not gonna give
you the fish."
So, such is the moral power of some customs.
At any rate, so here you have so if you praise
someone's, I have a friend from Lebanon where
she grew up it was the same thing somebody
praises your scarf or piece of jewelry you
just have to say, "Take it."
There's only one way out actually which is
to say, "Oh you like, it was a gift."
[laughs]
[laughter]
At any rate, so alright here you have this
situation so I wanna cow, I go up I say, "Wow
that is one magnificent cow, that's a really
beautiful cow you got there."
So the guy there's only one thing he can do
he says, "Oh, you want the cow, well, please
take the cow it's a really stupid cow but
if you like it you should really have it.
No, no don't even think about giving anything
back, it's a gift of course, we're neighbors,
we love each other just take the cow."
Now, he owes you one.
[chuckles]
[laughter]
And everybody knows that, nobody'll say it.
But what does he owe?
He owes you something roughly like a cow.
And that's what you get in communities like
this you get this sort of rank type system
of types of things.
So a cow, a canoe, a very nice necklace are
roughly the same, or you could give one back
for the other.
Or it's not necessarily bad because you could
give something back to him or he could just
show up because you owe him one and he could
just say, "Well, wow, that's a beautiful necklace
you have.”
Or he could say, “You know, my son is deeply
in love with your daughter.”
It could be a lot of things, doesn't necessarily
a material good, “I really need help with
something”.
So, but you have this sort of quantified rank
system.
And there's all sorts of ways you can head
it off.
You can play games you could like say, "Oh,
I hate owing that guy a cow, I know, I just
got a whole bunch of yams, I'll give them
to him.
I'll be off the hook," and he'll be like,
"Oh, yams; great, thanks."
[chuckles]
[laughter]
But so he might mock you as a cheapskate which
is a devastating thing in a small community.
But here's the thing, he's very unlikely to
come up with a mathematical formula for exactly
how cheap he thinks you were, right?
And that's the problem: how do you get from
like a cow is roughly like this to 27 yams
equals one cow but not three, how many chickens
equals a cow.
In the barter story there's a mechanism but
if there's this sort of rough credit system
is what you'd actually have and what you actually
do observe in places about money, well, how
does that turn into something where you can
figure out exact proportional equivalents?
The answer to that seems to be when somebody's
very angry.
Now when people are being nice to each other
there's really no need to calculate but occasionally
it will happen that people, violence ensues.
Say I am mocking someone for giving me these
yams and he's drunk, I'm drunk, violence ensues,
somebody's ear gets cut off.
Well then there's numbers.
Very often it is the case that even in places
where you don't have markets for goods, you
do have incredibly elaborate series of fines
and penalties for damaged limbs, if you lose
a finger it's worth this much, if you lose
a thumb it's worth that much, if you lose
an eye, if you have a gash like this large
and they'll measure the gash, and how many
chickens or heifers or silver plates or whatever
it might be.
What they call the Barbarian Law Code, seemed
like every society in early medieval Europe
wrote up a schedule of fines like this and
some of them are incredibly detailed.
The early Welsh and Irish ones are especially
interesting because we know they didn't have
markets, you couldn't buy or sell things,
most things.
But they did have prices on everything.
In fact, they specified the exact value of
every single object likely to be found in
a person's house, ranging from the silverware
to the roof beams, everything, the curtains.
Why?
Because you will end up in a situation often
where the law says you owe me 27 heifers or
this means war, swords are pulled, people
are not willing to compromise, you killed
my brothers, you insulted my mother, whatever
it might be.
You need to pay penalties and you don't have
heifers.
Well, then you actually need to figure out
exactly what's equivalent to what.
So in those circumstances and in legal situations,
particularly where there's a danger of a feud
or outbreak of violence, in fact people do
need to quantify and it seems like that's
the first circumstance where you have something
like money emerging.
That association then of money and violence
is a constant, and it helps to explain a lot
about why debt, particular tends to take on
this incredibly powerful moral hold.
One way I like to put it is that if you are
in a situation of inequality –
[pause]
of violent inequality.
Probably the more effective technique ever
invented to make, not only make that seem
moral but to make it seems like victim is
to blame, is to frame it in the language of
debt.
Mafiosi understand this perfectly well, right?
But sort of heads of conquering armies, you
come in you say, "Alright, I've just conquered
you guys," and it's actually important to
bear in mind here that there's a famous line
from Benjamin Franklin, "There's nothing certain
in life but death and taxes."
That's not actually true, it's only death.
In many societies they did ancient Sumer communities
didn't tax themselves, taxes were just placed
on conquered populations.
The same was true in Athens, in fact, they
had negative taxes in Athens, the government
gave you money, you were paid to vote, just
gave periodic handouts from government resources,
Rome had bread and circuses.
So citizens didn't actually have to pay taxes,
taxes was tribute placed on people who'd been
conquered.
But the general excuse was debt, "You owe
me your lives.
Why do you owe me your lives because I coulda
killed you and I didn't so --
[pause]
of course, I expect payment for this, compensation.
I'm a nice guy; I'm gonna let you off the
hook for six months and if you're in trouble
we can negotiate something but I do expect
payment."
Voila, you've turned a relationship of violent
inequality into a relation where the victims
are running around feeling inadequate all
the time, making terrible apologies for themselves
and you get to be the magnanimous nice guy.
It happens over and over again in world history
and it's very, very effective.
The problem is it tends to blow up in your
face because from the prospective of power
there's that little worm in the bud which
is this is you're translating things into
the language of the business deal which implies
that you should be equal, you are equal on
some level if you owe a debt to someone, there's
a contract here, but one party has failed
to live up to their end of the contract.
[pause]
Now if you think about it there's a real explosive
potential there and if you look at world history,
in fact, the vast majority of rebellions,
revolutions, insurrections, peasant revolts
that you see are not about the kind of thing
you'd probably think it would be.
They're not about slavery, I mean, slave revolts
happen but they're pretty rare, they're not
about caste systems, they're not about serfdom,
absolute declared systems of inequality.
They're always about debt.
Moses Finley, the great classicist once said
that there was basically one revolutionary
program throughout antiquity: just cancel
the debts and redistribute the land; in that
order.
When peasants, like, take over a town the
first thing they do is they find the debt
records and burn them.
After that they go after the land registers
and maybe the tax documents.
And this remains true throughout history.
I mean, I was actually going through just
recently some of the writings of John Adams
and others of the founding fathers, their
reflections on democracy, which, of course,
they were totally against; those guys hated
democracy.
And John Adams has this quote saying, "Well
we can't have majority vote.
If we had majority vote then we'd have two
million people with property, nine million
people without property, you know what's gonna
happen?
The moment we allow everybody to vote first
thing that's gonna happen is they'll cancel
the debts, after that they'll redistribute
the land."
[laughter]
It's just common sense.
So this is the program and why debt, why does
debt mobilize people in this way?
Because it implies that you're equal.
So if you say you are inferior, you're a peasant,
you're a serf, I'm a lord, well, it's not
gonna make people very happy but you can live
with that.
But if you say, "Well, you're supposed to
be my equal but you messed up.
You are morally inadequate."
Well, it's kind of hard not to take that and
say, "Now wait a minute if we're equal like
why are you saying I messed up?
I mean who owes what to who here really?"
And that is, of course, what people have said
for the last 5,000 years when confronted with
that almost invariably the response is who
owes what to who.
But once you do that, you're using the language
of debt, right?
You are saying that debt is morality, you're
saying, "Well, wait a minute we make your
food.
In terms of any reasonably morality, I'm the
guy, you should be owing me rather than me
owing you."
But suddenly the language of debt does become
all pervasive 'cause you have to use the master's
language.
And I think that's what we're dealing with
with all this religious text, with all this
philosophical text which start by saying debt
is just morality and then say except actually
it's not.
You're stuck with the language of debt as
a way of arguing about politics.
We don't know if this is 2000 D.C. in Mesopotamia
and two guys are sitting around the tavern
arguing about politics what kind of phrases
and language they're using.
But we can be pretty certain that debt is
a big one in there.
And we can also be pretty certain that when
we're reading all these great religious texts
that language of ordinary, everyday, political
argument is in there.
The thing is we don't have this anymore so
we're probably reading all these sort of Mesopotamian
equivalent of “it's the economy stupid”
or all these various catch phrases that everybody
knew at the time that we just don't know anymore.
So they're just throwing them around in this
lodge and this is why all this moral language
becomes this financial language and you talk
about redemption and reckoning, and so forth
and debt and sin and so forth and so on.
So you're stuck with this language of debt
except it periodically blows up.
Next, when I started looking the broad sweep
of history I thought, "Well, you can look
at social movements and organization of society
in those terms and perhaps one of the most
revealing ways of doing that is looking at
the history of money itself."
Remember we have this paradigm: first there
is barter, then there's money, then comes
credit, and that's wrong.
Not only it is wrong, it's actually backwards;
credit comes first.
Somehow or other, by the time the sort of
curtain comes up around 3500 B.C., in Mesopotamia
you already have very elaborate credit systems.
Actually the very first document we have which
talks about interest rates is a political
document by a King [inaudible ] I believe
his name is, a Sumerian King who's complaining
about his neighbors like occupying a stretch
of territory which is rightfully his and he
says, "Well you know, they've been occupying
this land for 20 years.
If we calculate the rent we would have charged
them had they been renting this same land
and then add a compounded interest rate, I
calculate that they would actually owe us
13 trillion shekels or whatever, [chuckles]
some insanely sum that no one could possibly
pay.
Obviously this means war.
[chuckles] So you've already got compounded
interest rates and so forth going on in the
very, very first records that we have people
have expense accounts, bar tabs.
It seems like almost all everyday transactions
are on credit.
And the evidence for that is scales, because
they were denominating debts in silver but
they didn't actually make scales accurate
enough to weigh out the tiny amounts of silver
that would have been required to buy like
a shirt or a hammer or something like that
in the marketplace.
I mean, they had the technology to do so they
just didn't bother.
So clearly, people weren't actually using
silver to buy this stuff they were running
up a tab.
Alright, so you've got the Sumerian situation,
but the same King you know what he does after
he declared war on Legash or the rival place
wins, and what does he do after that he declares
a debt cancellation –
[pause]
for everybody in the kingdom because it seems
that the problem when you have these credit
systems, money is basically in a set of IOU's,
denominated in silver unless you're merchants
dealing with large transactions rarely actually
changes hands.
The problem is in bad years people fall into
debt –
[pause]
because also the silver and grain are fixed
in relation to each other; that's what money
actually is but that a pretty problem if you,
if there's a bad harvest, the price doesn't
go up.
You're stuck, the farmers fall terribly into
debt.
As a result people start taking away their
flocks, taking away their fields, taking away
members of their family.
Debt peonage becomes a huge phenomena, they
start running away joining nomad bands outside
the city, society seems to be breaking down
so kings will normally come in and sort of
declare a clean slate.
"Alright, commercial debts can stay on the
books usually but consumer debt, we'll wipe
them out and start over again."
This becomes a habit and become systematized
in the Biblical Jubilee every 7 to 49 years
depending on your reading.
Debts are wiped out; everybody gets to go
home.
In fact the first recorded word for freedom
in any human language is the Sumerian word
"amargi" which literally means return to mother
because that's what happens.
They declare debt cancellation, all the debt
peons get to go home.
[pause]
So, this virtual money systems comes first
which is always very entertaining because
people have this tendency to write about virtual
money as a new phenomena; we're in this brave
new world.
Actually it's the original form of money.
Coins come later.
Barter, incidentally, tends to only really
show up when you have people who are used
to using money but actually can't get their
hands on any.
So you do have documented places where people
do say, "I'll give you 20 chickens for that
cow," but in almost every case it's something
like Russia in the 90's where the economy
falls apart where the money supply vanishes
and people are trying to carry on as if they
had money without money.
Or in a prison, they turn cigarettes into
money because they're all used to using money.
[pause]
Now, here's the interesting thing: coins are
invented nearly simultaneously, it happens
first in Lydian in the Eastern Mediterranean,
but shortly thereafter at least in broad historical
terms it happens in the Ganges Plain in Northern
India and in the plains of Northern China,
Ganges Valley, I'm sorry.
And --
[pause]
in every case there were different physical
techniques; in one case stamped, in one case
cast, but –
[pause]
social situation seems to be the same which
is that money, in the physical sense, currency,
is actually invented to pay soldiers.
And it makes perfect sense if you think about
it because gold and silver are what money's
denominated with and you can use it for exchange
but it just isn't usually done.
But soldiers are exactly the sort of people
who are most likely to be doing this, first
of all from the perspective of a soldier,
gold and silver has a huge advantage over
a credit arrangement because you can't actually
steal a credit arrangement; you can't run
off with it.
On the other hand, gold and silver it's kind
of your equivalent of the suitcase full of
hundred dollar bills and nobody knows where
it's from, nobody asks, anybody'll take it.
So for soldiers that's very nice, you can
also melt it down whatever, divide it up into
small portions.
So soldiers are likely to be carrying around
loot.
And second of all, if you have elaborate credit
arrangements as the major way of transacting,
well, a heavily armed guy who's just passing
through is probably the person you'd least
like to extend credit to if you can possibly
avoid it, if he's carrying around little bits
of gold and silver, well, good.
So cash markets insofar as they seem to first
emerge will tend to emerge right around where
ever armies are parked or where they have
recently looted things and are trying to get
rid of the little bits of gold and silver
and acquire the wine, women, and song, and
various other things that they like.
[pause]
Governments very quickly get in on the deal
and, in fact, one interesting thing is, by
the Adam Smith account, if money just sort
of emerges from the need to get over the inconveniences
of barter, well it would be very hard to understand
why governments demanded taxes in money.
It might seem self evident but the moment
you think about it it isn't because if gold
and silver are just money well why not just
grab the gold and silver mines?
And in fact governments would do that.
I mean, ancient kings would normally grab
the gold and silver mines and, in theory,
you have all the gold and silver you want,
you've got all the money.
Why would you then take the stuff, stamp your
picture on it, give it to people, and say,
"Okay, everybody in the kingdom has to give
me one of these back again?"
Think about it, it's kind of odd.
But it makes perfect sense if you're trying
to feed an army.
Here you have this army of 100,000 people,
they're sittin' in a town on the border, well,
how are you gonna get food to them?
Under ancient conditions unless they're next
to the ocean where it's easy, relatively easy
to move stuff around, it's extremely difficult
to move around large amounts of grain, they're
gonna eat everything within walking distance
in a matter of weeks.
So what are you gonna do?
Either you have to employ another 100,000
people just bringing them stuff or you can
give them all tiny little pieces of metal
with your picture on it and say, "Okay, everybody
in the kingdom has to give me one back."
Voila you've just employed your entire population
getting soldiers things they want.
[laughter]
And that's [chuckles] essentially what taxation
systems have done throughout world history.
I mean, colonial empires did this very, very
self consciously like in Madagascar where
I was, first thing the French did they said,
"Okay we've just conquered you, that was very
expensive outfitting an army, you're going
to have to pay us back for the cost of having
conquered you.
We will issue paper money and you will have
to give 10 of those back to us every year."
It was a way of creating a market.
Somehow or another you're gonna have, they
actually called it the moralizing tax to teach
people the value of work.
So money and taxes have been used throughout
the centuries as ways of creating markets
which is very interesting because we have
this assumption that markets and governments
and particularly war-making governments are
opposed principles and that political choice
for the last century or so has largely revolved
around which one we're gonna slant to.
Are we gonna go more on the government side,
more on the market side?
Those are the two sort of logical human possibilities.
Ever since people like Herbert Spencer early
19th century we've always assumed there's
an opposition between these things, historically
in fact no.
Markets tend to be created by governments
as a side effect of military operations.
They sometimes take on a life of their own
but the origins have very closely linked.
So to go back to these periods of history:
so you have this first period of virtual money,
coinage is invented around 600 B.C., Karl
Jaspers, the German existential philosopher
who coined the phrase, "the Axial Age" for
this period and he pointed out that almost
all major schools, both of world philosophy
and the great world religions, crop up in
a relatively short period of time.
If you extend it from 600 B.C. to 600 A.D.
it's exactly, it starts happening exactly
the times and places where they invent coinage;
uncanny.
It's even in the same city, it's in Greece,
Miletus, which is a place where they, the
first Greek city, where they're using coins
in everyday transactions, is where they invent
Greek philosophy at exactly the same time.
In China it happens, in India it happens,
world religions arise.
World religions arise largely as peace movements
against these empires that are using the coins
and people have talked about Axial Ages as
being characterized by a military coinage
slavery complex, actually they say military
coinage, but I'll throw in slavery because
the chattel slavery which isn't a major institution
either before or after, in Indian and Chinese
history, for example, becomes really big in
just in this little slice of time.
People take these standing armies, they pay
them in cash.
Alexander's Army for example I think it took
half a ton of silver a day to pay the army.
Where did they get the silver?
Well the armies would besiege cities, take
lots of prisoners, enslave them, send to the
mines, and they made more metal to feed the
army again.
So, it became this giant cycle.
So, coins are actually found pretty much where
armies are throughout the ancient world.
In Rome it was in Italy, I mean, 90 percent
of all finds of Roman coins are in Italy and
along the border where the armies were stationed.
Alright, so Axial Age you have this rise of
world religions, they start as peace movements,
there's this kind of mutual division of social
territory in a way because before you don't
really have impersonal markets, you have credit
markets.
When you have impersonal markets based on
cash the idea is well, it's almost like saying,
"Well, here's a space where, well just think
about material goods and getting as much of
them for yourself as possible."
And it almost makes sense that if you do that
someone else will also say, "Alright and here's
a space we'll call it religion where we think
about why material things are not important
and why it's better to give than to receive,"
and charity and things like that always crop
up as an idea that never really existed before
as a conception in human history, exactly
the same place as you get these impersonal
markets as part of these religions.
So you get that but gradually the empires
come to a crisis, they start crumbling, they
adopt the world religions, Confucianism in
China, Ashoka adopts Buddhism, Constantine
goes for Christianity at exactly the moment
the empire's starting to fall apart, doesn't
really work, empires dissolve.
And you get the Middle Ages where once the
armies, standing armies dissolve, all the
gold and silver basically gets put back in
churches and monasteries, people go back to
credit systems and the world religions take
over the regulation of these large, elaborate
credit systems.
And so, for example, in the Middle East checks
are invented and widely used.
Already in Basra around 800 or 900 people
were reporting majority of transactions in
the marketplace are by check.
Check is actually an Arab word meaning check.
[chuckles]
[laughter]
Yeah, I always like to point out to people
when they talk about financial globalization
as if this is somehow a new phenomena.
Like, think about the terms "cash" and "checks,"
cash or a check, like, check is an Arab word
meaning check and cash, well, has a double
etymology but one of them apparently is originally
a Tamil for Chinese money.
How did that happen?
Alright, so you have this world where people
are going back to use of credit and we say,
"Oh, in the Middle Ages, the Europe reverted
to barter."
Not true.
In fact, if you look at the records they're
not bartering things they're actually using
money but they're using money that doesn't
physically exist.
So, they're still using Roman currency and
denominating everything in Roman currency
until Charlemagne and then they're using Carolingian
currency.
But the Carolingian currency only actually
exists for maybe 20 years and some of it doesn't
exist at all.
It's like pounds, shillings, and pence originally
come from Charlemagne's system.
He never actually made pounds, he never got
around to it, but they were using it to measure
things and they actually called this imaginary
money.
So whatever the king was actually putting
out that was one thing, but you had this sort
of ideal system which spanned Europe, everybody
knew what it was so you could trade and do
it on the basis of this money that didn't
actually exist.
And they even had a phenomena they used to
call crying up or crying down the currency.
So a king could say, "Alright, whatever we're
using right now, it used to be 17 of these
pennies were a shilling; I'm gonna change
it, now it'll be 13."
If he--, so he could inflate the currency
if he was in debt or if he wanted to raise
taxes he lowered it.
So, he just rearranged whatever the currency
was being used which was only used for occasionally
things because again most transactions were
on credit in relation to, or they could recall
it.
I mean, the king said, "Okay let's recall
the money and I'll give it back again next
year."
And commerce would not stop because everything
was based on credit systems.
Similarly in China they invent paper money
which originally comes out of the government
taking credit instruments that people are
using and adopting it themselves.
That's what they do in China anytime there's
innovation first they try to suppress it and
they say, "Okay, okay we'll do it for you."
So it's all privatized in the Islamic world
and it becomes public in China.
Actually they are very opposite principles
but –
[pause]
in Islam, in particular, in this period, you
get the first real free market ideology.
And this is a fascinating thing I mean a lot
of people will be very annoyed to learn this,
but Adam Smith actually got most of his best
ideas and best lines from medieval Islam.
Like the pin factory actually comes from al-Ghazali
in 1100 he had a needle factory.
Okay.
And it's made possible by what?
By Sharia, because [chuckles] Sharia is civil
law that operates outside the purview of state,
and, as a result, you can have markets and
since they get rid of usury, that's the other
thing that happens, instead of debt cancellation,
which has continued in China but in other
places they, instead, just get rid of interest
taking, it's illegal, debt peonage becomes
illegal.
And so in Islam, since they don't have that,
they can these markets that operate completely
outside of the purview of the state and you
could write a check in Mali and cash it in
Indonesia and it's all civil courts that take
care of it.
So it's the first time you really get an idea
that markets run by themselves and don't really
need governments.
But since they had a real free market which
isn't enforced by the state, they don't assume
it's all about competition, that's like a
minor element.
The assumption is that it's all really an
extension of mutual aid.
Alright, so be this as it may you get that
world in the Middle Ages which looks surprisingly
good, slavery largely disappears.
I mean it's kind of rough in Western Europe
but Western Europe is kind of a barbarian
backwater anyway.
[chuckles]
Alright, so what happens?
Around 1450 it starts to go bad, then by 1492
you get the all this gold and silver coming
in from America.
As you go back to gold and silver currency,
slavery comes back in a big way, standing
armies and giant empires come back in a big
way.
And that's the period that's ending now;
[pause]
1971 is the date that most people set for
when we go off the gold standard and Nixon
sort of takes the dollar off the gold standard
as this sort of key point of transition.
And very rapidly after that you see a whole
series of changes.
Of course, we get credit cards which hardly
anybody's using in '71, very quickly taking
over so that you had cashless transactions
become the rule within a generation or two.
You have financialization of capital, most
profits for American companies no longer come
from making or selling anything, but largely
from financial speculation.
You have credit's gonna save the world, microcredit
will save the Third World, 401k's and mortgages,
all that stuff that blows up in 2008.
And the question is why?
Why it seems to have gone so horribly wrong?
Because we have a series of terrible debt
crises, first the Third World debt crisis,
now the debt crisis that's hitting everybody
other than the Third World right now --
[pause]
have happened ever since.
And the reason, I would say, is because in
a way we're doing things backwards.
If we do look at this in broad historical
perspective what we learn is that whenever
you have a system of virtual money where people
don't assume that money is a thing but assume
it's a promise, it's an IOU, it's a social
arrangement such as in ancient Mesopotamia,
such as in the Middle Ages, well, you have
to set up some sort of mechanism to make sure
the thing doesn't go crazy.
Usually that means, invariably that means,
setting up some mechanism to protect debtors.
So you could have periodic debt cancellation,
you can have anti-usury laws where interest
taking is banned entirely and instead you
have profit sharing, there's a number of things
you can do.
Usually it's some giant overarching, cosmological
system beyond the purview of any state, whether
it's sacred kings or biblical prophets, or
the world religions, canon law, Sharia.
Be it as it may it has to be something big.
Now we do set up giant, overarching institutions
like that nowadays but what do we do?
We set up the IMF to protect creditors against
debtors.
Basically, we did it backwards.
S&P all these other institutions like that
they come up with this idea that nobody should
ever default which is absurd.
And sure enough we have endless series of
debt crises.
In fact, I like to say I mean when I'm being
provocative, which is often, I like to say
that that sort of idea that people had in
most of world history of the worse case scenarios
everybody falls so deeply into debt that they
start having to sell themselves into slavery.
It's like nightmare scenario, this is what
we always wanna prevent and that's why we
have all these laws.
Well, you know if Aristotle were here today
he would probably think that the distinction
between being so indebted that you are selling
yourself to work for others all day long,
12 hours a day, or being so indebted that
you are renting yourself to work for others
all day long, 12 hours a day, as something
of a legalistic distinction.
He would think this is it, this is the nightmare
debt trap and most people in the world are
falling into it.
But if you look at this in broad historical
terms, you'll also see that 30 years or 40
years is nothing; we're talking about 500
year cycles here, and people are beginning
to wake up to this.
We still have time to get it right.
And I think the social movements that are
coming out since 2008 around issues of debt
are precisely recognizing that.
If we're moving into a period of virtual money,
money is just a promise that we make to each
other, it's just a set of IOU's and social
arraignments, arrangements; those can always
be rearranged.
Make a promise to someone, circumstances change,
you negotiate and the big players always do
that with each other as we've discovered in
2008 when trillions of dollars of debt was
made to disappear by the waving of various
types of magical wands.
[chuckles]
[laughter]
So what people are saying is if democracy
is to mean anything now it means that everybody
gets to weigh in on what sort of promises
are made, what sort of promises are kept,
and when circumstances change what sort are
renegotiated and I think that's the political
moment that we're in right now.
[pause]
[applause]
[pause]
Ah, a question, yes.
>>Male #1: So when this, I have to say it's
fascinating and along the same lines, in this
era if you have currency with runaway debt
explosions what, if I can ask you to speculate,
what do you think would be a good way to look
at, what would be a good rate of risk, what
would be a good pre-rate of return on investment
as an adjustment to?
>>David Graeber: Risk free rate of return,
go on.
>>Male #1: If we had a fair society --
>>David Graeber: Um-hum.
>>Male #1: if you could define a fair society
by edict --
>>David Graeber: Okay, I'm now the dictator.
>>Male #1: how, we used to have, you say we
used to have jubilees and cancel debts --
>>David Graeber: Um-hum.
>>Male #1: so short of having a jubilee, debt
is a strange thing, somebody mentioned exactly
if you have idle grain and it gets eaten by
rodents and slowly diminished and rots --
>>David Graeber: Um-hum.
>>Male #1: but debt is funny because it accumulates
over time rather than --
>>David Graeber: Yeah, um-hum.
>>Male #1: diminishing over time.
Would you argue for us having a negative free
rate of return on investment?
>>David Graeber: I would argue actually --
>>Male #2: David, could you please repeat
the question?
>>David Graeber: The question, what's that?
>>Male #3: [unintelligible]
>>David Graeber: Oh I understand, yes.
So the question is if I could dictate my own
economic policy what sort of rate of return
would I dictate?
A negative one such as occurred through natural
spoilage equivalent rather than imposing an
idea that money necessarily has to grow.
That's an interesting question.
I mean it's interesting that our entire sort
of perspective on what money should do and
has to do goes back to arguments about this
in the Middle Ages.
Since usury was illegal the way they got around
it was to come up with the notion of interest
which was originally a late fee.
So the idea is you're not paying interest,
you're not renting money which is wrong, you're
just charging people for failure to return
it on the basis of the idea that money would
grow because this is all between merchants
at first, if you were investing it.
So you can ask for five percent rate of return
because money would normally, you'd get about
a five percent investment rate.
And that five percent number has kind of stuck
with us, in a way, because it's about the
number that like any economy is expected it
really ought to grow, if it doesn't there's
a problem.
And it's interesting it is exactly the amount
of the originally stipulated rate of return.
And there were usury laws until quite recent,
I guess 1980 they actually got rid of them,
which held it down to a fairly reasonable
rate or what was considered so at the time.
I mean, myself, I actually do think a Jubilee
would be reasonable [chuckles] so in a way
I would jump forward from this.
I end the book by throwing that out and I'm
a radical so I'm not gonna be like stipulating
rates of return.
I'm gonna say like we just need to wipe the
slate clean conceptually altogether and come
up with a new way of thinking about the system.
So I think a Jubilee is useful as an idea
because it, not only would it be nice because
a lot of people could really us debt forgiveness
right now, a lot of the big players got it
and everybody else didn't.
But because it would allow us to reconceptualize
what we're doing here and realize that money
isn't what we thought it was.
So what kind of system we'd come up with in
the wake of that, I've got a lot of ideas
but I wanna leave that as open as possible
so I just sort of ended the book by saying
rather than come up with a plan like that,
we just sort of create this sort of cataclysmic
event which will sort of allow us to start
asking those questions.
I've heard recently, I didn't know this, somebody
told me that the Boston Consulting Group which
is guess if Jeffrey Sachs' people, ran a model
to see what would happen if they actually
did a Jubilee.
And they said that it would cause severe economic
disruption but rather less than you would
get if you don't have a Jubilee.
[chuckles]
[laughter]
So either way we're screwed but you'd be a
little less screwed if we did it that way.
So it turns out that it might not be a bad
idea.
I mean I think that we should start thinking
about completely radically different forms
of money entirely.
Interest free systems would be possible.
The reason why things like Islamic banking
don't work is because not everybody's doing
it.
If you force people to do profit sharing rather
than interest taking, if everybody did it,
it would work.
[pause]
>>Male #3: One, two, three.
Is money [unintelligible] amount to the debt
we're seeing today, governmentally and personally
in America and how it's all over the globe
at sometime [unintelligible]?
>>David Graeber: Yeah it's really odd because
--
>>Male #4: Could you repeat the question?
>>David Graeber: Yeah, okay me repeat the
question: is there any precedent for the sheer
amount of debt?
I would say probably not but I mean unless
you wanna count the South Sea bubble or something
like that.
You do have these speculative crises that
crop up periodically, but the mystery is just
how many people owe things to each other and
you have to start asking yourself, "Well,
who's it all owed to?
Everybody seems to be in debt, this is sort
of puzzling in a way."
And I would say, no, and one reason why is
because there seems to be this feeling since
the 70's that basically all social problems
can be solved through debt.
One theory I saw, which is kind of interesting,
it's the autonomist reading, Midnight Notes
Collective, it's a group of Italian autonomist
Marxists.
But they had this very interesting reading
of the two phases of post-war capitalism.
What they basically said is that after World
War II they kinda gave a deal to the North
Atlantic white working class and they said,
"Okay, if you guys don't become commies we'll
give you free education, free health care
in most places anyway, we'll give you social
benefits of various kinds."
And social struggles between 1945 and 1975
where more and more people asking in on the
deal.
And there is a tie between productivity and
wages.
So whenever, and the lines go up together,
increases of productivity are met with increases
of wages.
Since the 70's the deal is clearly off and
one reason is because they reached kind of
crisis of inclusion that you can't actually
give that deal to everybody without fundamentally
changing the nature of the system.
So first minorities, so you have the Civil
Rights Movement, other people who've been
left out of the deal want in, people in the
Global South want in, women want in, feminist
movement.
It reaches a point where it just sort of snaps
and you have this fiscal crisis, oil crunch,
ecological crisis and they say, "Alright,
deal off, we'll give you another deal.
No longer will wages be connected with productivity,
you can all have political rights because
political rights don't necessarily give you
any economic benefits, but you can have credit."
So the credit solves everything, everybody's
being, that's why you have microcredit saves
the Third World, why you have 401k's and mortgages
and there's this huge extension of credit.
And you could say the same thing happened,
right?
More and more people want in on the deal and
more and more people are getting credit to
the point where people they're just doing
these crazy sub-prime scams and things like
that are beginning to run the system.
And when it cracks it looks almost exactly
the same, you get the oil shock, you get the
financial crisis, you get the visions of ecological
catastrophe.
It's the same thing all over again except
at this point it's not clear what they're
[chuckles] gonna come up with next.
So, in that sense, yeah, you have this unprecedented
series of bubbles, built on bubbles, built
on bubbles.
And I'm speaking as someone who's working
the Global Justice Movement and we were like
doing our studies for the G20 as part of like
several intellectual collectives where they
kind of, the activists kind of told us, "Alright,
well, they're all meeting to come up with
their evil plan and tell us what their evil
plan is likely to do so we can oppose it."
And so we figure it and I guess they're gonna
have to do green capitalism, declare an emergency,
we had various ideas for what would be a viable
solution.
And they kept not doing it; they just fight
each other.
In fact one of the reasons why the Global
Justice Movement fell into such a problem
is, like, at least in 2000 we knew what their
evil plan was [laughs] and we could oppose
it.
And now they don't seem to be able to come
up with one, we had better ideas for their
evil plan than they did.
[chuckles]
So we were sitting around and saying, "Well,
come on guys come up with your formula and
we can fight you."
And they wouldn't so they were sort of stuck
on this credit like bubble system that fell
apart and they haven't quite come up with
what they're gonna do next.
So I'm waitin'.
[laughter]
[pause]
>>Male #4: So taking the other side of the
coin [unintelligible] extra help why should
anybody pay their debt at all?
>>David Graeber: Why should anybody pay debt
at all?
Well, I mean you could say the same question
of all those guys who were bailed out, the
bankers, I mean, moral hazard works on both
sides.
[pause]
>>Male #4: Well, I mean, it's the same case.
>>David Graeber: Yeah, I mean --
>>Male #4: I don't think that they should
have been helped either.
>>David Graeber: Hum.
Yeah I know a lot of people think that but
it's interesting that they got helped because
as a lot of people point out all this mortgage
debt if they just paid off the mortgages that
would have bailed out the banks in itself,
but they chose to give it to the banks and
not to the mortgage holders.
And this is a pattern that you do see throughout
world history is that debt means something
totally different; depends on who it's between.
When you have debt between two poor people
like somebody wants to make a loan to their
brother, it's usually because they wanna give
them a gift but they don't wanna say that,
save face, say it's a loan.
If he can pay you back, he will.
Between equals, between people who know and
like and trust each other, debt is just a
broad moral feeling that you should come through
for somebody.
And between the big players it's the same,
too.
I mean you see this all throughout history.
Like, even the earliest Sumerian documents
you have people saying, "Oh well of course
you're not gonna charge me interest because
we're both gentlemen," this sort of thing.
And when the big players are in trouble, debt
can always be renegotiated, too.
What seems to be sacred or treated as if it
were sacred is not debts between equals but
debts between the people on top and the people
on the bottom because all of a sudden it takes
on a completely different color.
So, yeah, I suppose you could come up with
a morality saying like, "Even equals should
treat debt as exact [ inaudible ] quantifiable
and unforgivable."
But it seems that you're not going to convince
people who actually like each other to not
forgive each other when they're in trouble.
Instead it seems more reasonable to expect
everybody to do it, apply that uniformly rather
because that philosophy of debt as something
that can never be forgiven, as something that
is sacred, really only crops up in situations
of sort of structural coercion of extreme
inequality.
[pause]
>>Male #5: How much of our sense of debt is
biological, how much of it is from society
and how much of it is regulatory?
>>David Graeber: Okay, so the question is
how much of our sense of debt is biological
and how much of it is from society and how
much is regulatory.
By regulatory you mean just sort of imposed
by --
>>Male #5: In order to make everything work
right.
>>David Graeber: Right, I see.
Well I mean in terms of biological, my argument
in terms of biological instincts is it's not
like they don't exist, clearly they do.
I think it's pretty naive when people say,
"Oh we're just Tabula Rasa," written on by
society.
No, we're not, we have all sorts of urges,
but that I would emphasize the all sorts.
Generally speaking in any situation we have
biological drives like making us do a thousand
different contradictory things.
So freedom is deciding which one to act on.
In the book, I sort of map out three different
sort of ways of thinking about the morality
of giving and taking of things, one of which
I call communism from each according to their
ability to each according to their needs;
one of which I call exchange; and one of which
I call hierarchy.
Exchange is based on principles of reciprocity,
but hierarchy is based not, on the opposite.
It's like if you do something you're expected
to do it again.
And all of these things are operative at any
moment and you could, like, call, and usually
what you're doing is kind of a mix of these
different types of principles.
So biologically and even that kind of fundamental
sociality, yeah, there is a degree to which
you're always gonna be able to think of things
in terms of debt, but it's never the only
way.
So you're always playing around with all these
sort of different ways you could frame it.
And in terms of regulation –
[pause]
well, what's interesting is when you try to
justify things in the big picture very often
that's when you fall back on language of debt
and reciprocity.
You see this all the time dealing with feudal
lords in the Middles Ages.
If you give somebody a gift you're expected
to do the same thing again next year.
In fact you need a special document, like,
if I give a gift to a king I have to make
him sign a paper saying I don't have to do
that next year because anything you do between
unequals the precedent, you have to do it
again.
However, then when they wanna talk about what
is justice, why is our society just, they'll
say, "Well it's all reciprocity, lords fight
for everyone and priests pray for everyone
and peasants make food for everyone and it's
all this sort of equal swap."
It's a completely, it has nothing to do with
the way things actually operate on the ground.
Somebody might call this a sort of like overall
social regulatory or justification level where
people are saying, nobody actually says, "Well,
you haven't really been fighting for me very
much this year so I'm gonna give you less
food" [chuckles] or "You're prayer level is
down or you've been praying more so we're
gonna give you more."
It's nothing to do with the way people actually
interact but they like to think of this idea
of debt and reciprocity as a language to justify
social relations that often operate on completely
different principles.
[pause]
Uh, yes.
>>Male #6: I live in San Francisco and there's
14,000 people since 2008 who have either had
their houses foreclosed or are in the process
--
>>David Graeber: Um-hum.
>>Male #6: as a [unintelligible] houses [unintelligible]
mortgages paid.
>>David Graeber: Um-hum.
>>Male #6: and in Northern California.
Are there historical precedents or what would
it look like to build a movement for a Jubilee
to relieve our debt instead of bankers?
>>David Graeber: Well there's a huge history
of that.
Peter Linebaugh has --
>>Male #7: Could you repeat the question?
>>David Graeber: Oh I'm sorry, the question
is, there's massive foreclosures going on
here in California including San Francisco,
people are being kicked out of their homes
by banks that have themselves been bailed
out by the public including those people who've
been kicked out from their homes and what
would it take to create a mass movement?
Are there historical precedents for that?
The answer is yeah.
As I say the vast majority of social movements
that have existed in history have been about
debt.
There have been debt strikes, there have been
seizing and destroying the records which of
course electronically is now harder to do.
In the Depression there was a systematic policy
of disrupting sales when they'd foreclose
on farms all the farmers in the neighborhood
would show up at the auction with guns and
somebody would bid one dollar [chuckles] and
no dared to say anything else and they'd give
it back to the farmer again.
So there is a [chuckles] huge amount of precedent
for that sort thing, but you can never do
it the same way twice.
The problem with organizing debtors politically
is that debt is very alienating; it's must
easier to organize people when you have a
bunch of farmers in a neighborhood they know
each other.
But what we have now is most people who have
student loan debt, mortgage debt, don't actually
know people in the same situation or people
are even ashamed to admit it.
There's really no forum in which people can
compare notes and come up with common strategies.
So one strategy that people have been using
has been some sort of pledge, some people
are doing a student loan project where they're
saying, "Alright, if we get a million signatures
we'll all stop paying simultaneously."
But it has to be something like that because
it's very, very difficult to build, you're
taking such a risk when you default or when
you threaten to.
You're taking such a risk that it's very difficult
to do that based on trust of other people
you don't know.
[pause]
So that's the question how you organize people
to be and what to do.
Um --
>>Male presenter: commentator: Let's take
one more question and then we have stuff to
do.
>>David Graeber: Okay you can decide who then.
[laughter]
>>Female #1: Is there [unintelligible] how
debt is handled for those who are [unintelligible]
and those who are not such parents and children,
such as very traditionally men and women?
>>David Graeber: Okay, the question is in
traditional societies or other societies are
their differences between how debt is handled
in the paid labor force and unpaid relations
like --
>>Female #1: Like the debt between those two
groups.
>>David Graeber: Debts, oh, oh, how debt between.
So you're talking, give me an example.
>>Female #1: What children owe their parents
--
>>David Graeber: Which I thought you meant
that.
>>Female #1: or before you could only work
inside the home you couldn't really [unintelligible]
go outside of that [unintelligible].
>>David Graeber: Right so how do you deal
with the relationship between, right, debts
between people within a household or where
there's a community of property between you
and outsiders?
It's an interesting question because, in fact,
it's a perfect example of what I was talking
about how we try to frame everything in terms
of exchange or some need to do so, even things
that don't work that way at all.
And the other point that I was making about
how we try to frame things morally in terms
of debt.
'Cause you'll often find people saying, "Well,
this is how we repay our parents for the pains
of childbirth and what they do."
But in almost every case it's a metaphor,
it has nothing to do with how people actually
related to each other.
So often when you see how people are actually
interacting it's on a principle that has nothing
to do with debt, you're not calculating equivalents
at all.
But then when you want to think about it in
a bigger picture, suddenly you're trying to
figure out some way to say it's all about
debt.
So I actually use this story about this famous
Canadian naturalist whose father presented
him with a bill for everything he owed him
up to the age of 21.
He said, "Okay, here's how much it cost to
pay the doctor to deliver you, here's your
primary education."
He had it all worked out and he gave him the
bill and the guy paid it and said, "Fine,
the hell with you, I'm never going to speak
to you again," and walked off.
But that's what it basically means because
when you're paying a debt it implies we need
have no further relations.
So the idea of actually paying a debt between
people that you love is utterly insulting;
you'd only do it if you really wanna have
nothing further to do with each other.
But nonetheless people like to frame it in
those terms.
One of the most fascinating concepts I discovered
when researching this was the notion of the
milk debt.
This is a medieval Chinese Buddhist concept.
What they did was they calculated what they
thought was the exact number of pecks of milk
you absorb from your mother [chuckles] in
the first years of your life and that's a
fundamental debt you owe to your mother and
said, "Okay, you owe exactly 37 pecks of milk."
But then they would say, "Alright, to pay
back even like one day's worth of milk would
in fact take 400,000 years of feeding her
off your own personal flesh.
[laughs] I mean so it was a way of saying,
"You could not conceivably pay this debt."
So why are they calculating as a debt at all?
It's again that same tension if you wanna
frame debt as morality and they say they're
the same thing, but as soon as you do you
say, "Except not really, it's completely ridiculous
isn't it?"
So that tension like the need to pretend that
it's a debt but then once you say it, like,
it's actually not a debt at all.
It's absurd to even think of a debt, why are
we saying this, recurs over and over and over
again.
And it's because commerce gives us this idea
that we wanna frame everything in commercial
terms, that we really ought to, that we start
doing that and then we say, "No, actually,
we can't."
[pause]
>>Male Presenter: Let's thank David.
[applause]
