Debt: What It Is and Why We Fight It

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Because it’s also true that the overwhelming majority of rebellions and insurrections, jacqueries, throughout world history, have been about debt—much more often than they are about more structural forms of inequality like slavery or serfdom or caste systems. People rebel about debt all the time. And part of the reason is because on the one hand it’s accusatory, and on the other hand, you’re saying, “Well, you should be my equal, you know, it’s an equal contract, except you fucked up.” And somehow saying that to someone is much more offensive than saying, “You’re just inferior.” Because the only response you can really make to that, if it’s destroying your life, at a certain point, is: “Wait a minute, who owes what to who, here?” This makes it a very explosive thing, so you get debt revolts, but it also means that the people rebelling end up using the master’s language, right? It’s the same if you look at Jubilee 2000 and efforts to forgive Third World debt, they said, “Well, you owe us.” Which is true, but, again, you’re framing things in terms of debt, morality is debt. So that’s why you have all these moral thinkers having to start by saying morality is debt, because that’s the language of politics that everybody on all sides is using at the time, and then trying to get rid of it again. And we’ve been in this moral dilemma in one form or another ever since. 

I think it’s useful to bear in mind that these long-term historical problematics—they haven’t gone away. 

Another thing I’ve discovered in research of the book is the idea of the generalized debt crisis—that we are experiencing today, I would say—is not new either. In fact, you might say that through most of world history, when moral thinkers and social thinkers thought about the sort of ultimate nightmare scenario, society completely breaking down, what they imagined was pretty much what we are experiencing right now. This is true of Confucian thinkers, or thinkers in the Middle Ages, or Aristotle. The tiny percentage of the population enslaves everybody else; they’re trapped in these terrible death traps that they can’t get out of; they’re forced to sell members of their family into slavery or themselves into slavery. I always say if Aristotle were magically transported to contemporary America, he would probably find the distinction between an indebted householder selling himself into slavery and renting himself to work for someone else as kind of a legal technicality. He would conclude that most Americans are, in fact, debt slaves. And would he be wrong? 

There were methods that were put in place to get rid of this, to head this off, because it was assumed it would lead to generalized social breakdown. One of them was the jubilee—clean slates in Mesopotamia. For thousands of years it was considered standard practice if a new king came in, he would say, “All right, everything canceled.”They’d leave commercial loans, sometimes, alone, but all the consumer loans would just be wiped out, and they’d say, OK, start again. In Biblical texts, as some of us no doubt know, there was a tradition of cancellation every seven to forty-nine years. In the Middle Ages, they said, “Okay, we’ll get rid of interest-taking, we’ll get rid of debt peonage.” All of this was under pressure from popular movements. So there’s always some overarching institution to protect debtors so that you don’t have everybody becoming enslaved and the system breaking down. 

This time around, ever since 1971, since Nixon went off the gold standard, what happened instead was they created the IMF and institutions like that not to protect debtors but to protect creditors, and to come up with this insane idea that no one should ever default, which flies in the face of even normal economic logic. The only way they can do it is by appealing to this very old idea of morality, that paying one’s debts and morality are the same thing.