Still More Graeber: Debt, Money, History

David Graeber:

As long as there has been money, there’s been debt… For one thing, what we now call “virtual money” is nothing new. In fact it’s the original form of money. Credit systems predate coinage by at least two thousand years. Human history has alternated back and forth between eras of virtual credit money, and eras dominated by gold and silver -- which have also, invariably, been times of great empire, standing armies (coins were invented to pay soldiers), and slavery. [A]rguments over credit, debt, virtual and physical money have [always] been at the very center of political life… [W]hen money is imagined as gold… simply one commodity among others, attitudes toward debt tend… to harden, often creating dramatic social unrest (pretty much every popular insurrection in the ancient world was over issues of debt). In periods dominated by credit money, such as the Middle Ages, money was seen essentially as an IOU, a social arrangement. The result was, almost invariably, the creation of some sort of great institution designed to protect debtors, so as to ensure the system didn’t fly completely out of hand: periodic clean slates in the ancient Near East, bans on the charging of interest and debt peonage in Medieval Christianity and Islam, and so on… We already learned in 2008 that debts -- even trillions in debts -- can be made to go away if the debtor is sufficiently rich and influential. It is only a matter of time before people draw the obvious conclusions: that if money is just a social arrangement, so many IOUs that can be renegotiated by mutual agreement, then if democracy is to mean anything, that has to be true for everyone, not just the few. And the implications of that, could be epochal.

Marvelous stuff, definitely I will have to read Graeber's book now. The identification of money with debt has, of course, an enormous pedigree, but Ellen Hodgson Brown has been attracting a lot of populist attention lately flogging the point, I know.

The deeper point about money as a social compact rather than as a commodity -- the point which yields the "epochal implications" concerning democracy of his conclusion -- reminds me of the great Karl Polanyi's insistence in The Great Transformation (the first, immediate, and still best repudiation of Hayekian neoliberalism) that money -- like labor and land -- cannot properly be regarded as commodities.

Polanyi's point about labor is actually at the root of my own insistence on the maintenance of a scene of legible informed nonduressed consent, his point about land -- where "land" has the same sort of resonance it does in Leopold's "land ethic" -- is also at the root of my insistence on the socialization of public and common goods -- both of which I elaborated in a companion post occasioned by Graeber's editorial today.