We are a public forum committed to collective reasoning and imagination, but we can’t do it without you. Join today to help us keep the discussion of ideas free and open to everyone, and enjoy member benefits like our quarterly books.
To read part 2 of the interview, click here.
David Johnson: What inspired you to write your latest book, Debt: The First 5,000 Years?
David Graeber: It came out of the strange moral power that debt has over people. So many times you’re talking to people about the depredations of the International Monetary Fund in the third world, telling these horrible stories about the thousands of babies dying of preventable diseases because people aren’t allowed to maintain malaria-eradication campaigns or basic health services due to austerity measures and debt servicing, and people respond, “Well, yeah, but you can’t say they don’t owe the money. People have got to pay their debts, come on!” That common-sensical notion not only that it’s moral to pay one’s debt, but also that morality essentially is a matter of paying one’s debts can bring people to justify things that they would never think to justify in any other circumstance. For the most part, decent people tend not to think killing lots of babies is justifiable under any circumstances. But debt somehow changes all that. Why is that?
DJ: You launch the book with an anecdote about debating an attorney who was an otherwise decent person but who insisted that countries indebted to the IMF must pay back their loans. The book is a sort of rejoinder to her and to people like her, but it’s a very long-winded answer, in that you appeal to 5,000 years of history and anthropology. Why doesn’t your immediate answer—“Look, the consequences of forcing these countries to pay their debt are babies dying of malaria and starvation”—suffice?
DG: Obviously my immediate answer wasn’t enough or she wouldn’t have said what she did. That’s why I felt I had to write the book: because you’d think it would be self-evident that killing thousands of babies—so that Citibank avoids losing one percent of its interest on a loan which is the tiniest percentage of its portfolio and will not actually affect the lives of their shareholders in any way—is wrong. You would think that would be morally self-evident, but it’s not.
DJ: In some ways the argument of the book reminded me of the philosopher Bernard Williams.
DG: How so?
DJ: He thought that morality was a “peculiar institution” in that it places so much weight on the notion of obligation over all our other values, and things we care about and find important—the thought that we ought morally to do something is supposed to trump everything else we value. In a similar way the book examines how debt—the notion that you ought to pay your debt, you ought to pay what you owe—has this peculiar grip on us that trumps or silences other concerns.
DG: And has a tendency to do so, yeah!
DJ: In thinking about the relationship between the moral “ought”—“You ought to fulfill your promise,” for example—and this notion of debt—“You ought to pay your debt”—I’m wondering whether they speak in the same voice.
DG: However you want to take that, it comes out the same way, except supercharged. In the same way that the “ought” trumps all other values, debt trumps all other “oughts.” And I argue in the book that one reason why medieval theologians, whether Christian or Muslim, seemed so inherently suspicious about usury is because it creates a moral imperative that tends to trump all others. They recognized a potentially dangerous rival when they saw one, a moral system that would completely overwhelm their own if it was allowed full rein.
One reason I thought all the history helpful is because there are these simplistic moral arguments and the second line of defense for the people who are defending the existing system is to say, “All right, fine, it’s not just. We’re not saying the existing financialized version of capitalism is a good system. But it foments technological change in such a way that, even though it creates vast inequalities, the poor are still better off than they would be under another system.”
DJ: Steven Pinker just came out with his book, with a similarly optimistic picture of liberal capitalism.
DG: And that’s very unusual, actually, that Pinker is still trying to come up with these lines, because most defenders of capitalism are not doing the Pinker approach—“Yes, it’s actually better.” They realize that they can’t. They’re just saying “All right, it’s not the best system in the world, but no other system is possible anyway.”
The instinct of the people now in power is to figure out how to change things as little as possible.
What we’ve seen over the last 30 years is a war on the human imagination. That’s the other starting point for this book—that in 2008 we had this crash, and all these assumptions we’ve been told we’ve had to accept for 30 years came crashing to the ground along with the market. One of them is the assumption that markets are actually self-sustaining. Obviously not true. Another one was that the people running them are competent. For years we were told that they aren’t very nice people—they’re greedy bastards, actually—but they know what they’re doing. All other systems just don’t work. These guys are incredibly bright, they’re incredibly competent. No, it turns out actually that they don’t even understand the working of their own financial instruments, or as far as they do, they’re engaged in scams. They trashed the entire system.
Assumption number three is that all debts ought to be repaid. Actually, no, debts don’t really need to be repaid, because AIG, who owes money, can wave a variety of different magic wands and debts can be made to disappear. Once you understand that the narrative we’ve been handed has been false, you’d think this would be the moment when you start thinking about larger questions: Why do we have an economy? What is debt? What is money? How could these things be organized differently? What do we need to keep and what do we change? You would think this would be the moment for international discussion about the basic assumptions that we’ve been making, and it seemed for about two weeks that it was going to happen.
DJ: You’re talking about 2008?
DG: Yes. The Economist put out this headline saying: “Capitalism—Was it a Good Idea?” And obviously their conclusion was yes, because they’re The Economist, but nonetheless the question had to be asked.
DJ: The Financial Times recently ran a series of articles similar to The Economist’s. Has the conversation you thought we should have had really ended?
DG: It was cut off. That was one reason I wrote this book: we were supposed to have this conversation, people started to, and then there was this general panic among people running things saying “No, no, no, stop that. Just carry on. Just clap your hands over your ears. Nothing to see here, keep moving along.”
“A gift to the World Bank and IMF from Istanbul“ / Joe Athialy (cc)
DJ: “Keep calm and carry on.”
DG: “Keep calm and carry on.” That only worked for so long, and we finally reached the point where that’s obviously not viable anymore. Enough people have said, “No, we have to start talking about this.” Perhaps that’s one reason why the book has been received as well as it has: people are finally exasperated at ignoring the problem.
And in a larger sense, there’s been this attack on the human imagination. There’s been this sense that you can’t talk about the big questions, it’s all settled. And when we found out it wasn’t, there’s this sort of paralysis that strikes.
I keep thinking about the extraordinary conservatism of the people running the world economy, running the governments of the largest nations of the world. Let’s compare it to ages past: let’s think about the people who fought World War II, let’s think about the ’50s, the giant structures like the United Nations, Bretton Woods, the space program— those people were capable of thinking big. We don’t do that anymore. The instinct of the people now in power is to figure out how to change things as little as possible. The world political culture has turned into this knee-jerk defensive conservatism of trying desperately to maintain things exactly as they are, for as long a period as possible.
DJ: It seems to me that it’s even worse than that, in the sense that the current postwar order is violating its own hard-won principles. You get liberal economists like Paul Krugman asking “How is it possible that we can be implementing austerity in a time like this?”
DG: Yeah. They all knew austerity was a bad idea economically, but they tried to do something that might be good economically and discovered that they weren’t even allowed to do it; so they thought, “Well, we have to do something. We’ll do this other plan even though it’s bad.” It’s very odd.
The current political regime in Washington is a great example of the fundamental conservatism of global leaders. I think that’s one of the explanations for why you have young people finally showing up in the streets. We had this guy who ran as a candidate of change. He didn’t run as a radical, but he had all the social-movement rhetoric that made you think that actually he was going to do things differently. His candidacy mobilized grass roots supporters as if this were a social movement. It was all very self-conscious, and all these young people became politicized and thought this was going to actually mean some kind of profound change.
And what do we get? We get this guy who is basically a classic conservative. The word conservative has changed in contemporary American English; now it means “extreme radical reactionary” or “right-winger.” But in the old-fashioned sense of wishing to conserve existing institutions in as much a viable long-term form, that’s what Obama turned out to be. Pretty much everything he’s done is along the lines of “How can we save the auto industry? How can we preserve the banking system without nationalizing it, without changing it in any fundamental way?” He did not map out a great new vision of a health system. He said the system we have is not viable, but here’s a plan where we can preserve the same principles of profit-driven private health in a form that will be sustainable. So basically this is a guy who is willing to make heroic efforts not to change.
And yet it’s at a moment when you have Democrats seizing both houses of Congress, a charismatic President taking leadership over the financial crisis where it’s almost impossible not to change anything, and a popular rage against existing financial elites willing to accept emergency measures . . . If at a moment like that you can’t get any sort of progressive change through electoral means, it’s not going to happen.
DJ: Regarding your mention of the “war on the imagination,” the book offers numerous anthropological cases of different societies and how they used money, and you use many more examples than you need to make your argument. What the book does as a reading exercise is enliven one’s imagination to the multitude of possibilities there are in how we can think about debt.
DG: That’s precisely what I was trying to do. One reason to spread the canvas so broadly—the same thing that drew me to anthropology—is that you fight the idea that all these questions are settled, that there’s really only one way to run the economy, the political system, society. What you see when you look at history, if you look anthropologically across the world, even at any one time, is a dazzling infinite variety of social possibilities. Which you would never have dreamed possible until you see them. It makes it much more difficult to make the argument that nothing except what we’ve got is possible.
Capitalism is just a bad way of organizing communism.
DJ: How do we get beyond our ways of thinking about debt, given how entrenched they are? We don’t live in an African tribal society or in the Roman Empire.
DG: There are two levels of that. One of the things that I was trying really hard to do was to demonstrate that, for all that variety, you’re not talking about fundamentally different principles. It’s not like other peoples live in an entirely untranslatable, unintelligible universe. The fact that we can do anthropology means they’re building the things out of the same materials that we are; they’re just putting the pieces together in different ways. And once you understand that and look back at your own society, you just see it with new eyes. And that’s again what I was trying to do, to start by talking about radically different sorts of economic systems and ways that people interact with one another.
So I think one of the questions I’m asking in the book is not just about the power of debt but also why we come to see debt—exchange whereby complete transactions are debts—as being the essence of all social relations, because the very logic of exchange is just one of many ways that we ourselves think of the morality of distribution and transfer of material goods. There are always different registers and different moralities that we bring to bear, but the basic principles really are the same everywhere you go. So the moment you realize that everything we’re doing is not an exchange, suddenly you realize that forms of feudal hierarchy actually exist right here, but forms of communism also exist right here. Almost any social possibility already exists and is part of the daily fabric of our existence. We’re just taught not to notice it or think it’s particularly important.
DJ: That argument reminded me of philosopher Jerry [G.A.] Cohen, who uses the notion of a camping trip to examine the sort of norms we take for granted in everyday relations. They’re communist norms.
DG: Yeah! Most interactions with people that you trust, people that you love, or people that you just need to cooperate with on an immediate basis, take the form of “From each according to their abilities, to each according to their needs.” It doesn’t matter if you’re working for the government, working for a corporation, or working in your family; if you need to fix the toilet because it’s leaking and you say “Hand me the wrench,” the other guy doesn’t say “What do I get for that?” It’s not an exchange; people act according to their abilities to chip in. Ironically communism is applied because it’s the only thing that works; it’s the most efficient way to allocate resources. Thus I like to say that you could argue that capitalism is just a bad way of organizing communism. [laughter]
DJ: At the end of the book, you suggest one policy proposal of a sort, namely a jubilee, or a cancellation of all debts.
DG: Well, it’s not really a policy proposal—I don’t believe in policy. I’m an anarchist, right? Policy means other people making decisions for you.
DJ: Right. Have you thought about how a jubilee would work right now, in terms of all the underwater mortgages in this country or on the sovereign debt crisis in Europe?
DG: I haven’t worked it out; I’m not an economist. But there are people who have. Boston Consulting Group, I believe, ran a model recently and came to the conclusion that, while having a debt jubilee would cause great economic disruption, not having one would create even more. The situation we have basically isn’t viable. Some kind of radical solution is going to be required at some point; the question is what form it’s going to take.
This time around, they might consider doing it in a form that actually helps ordinary people. It would have been perfectly feasible to take the trillions of dollars that they essentially printed to bail out the banks and give it to mortgage holders, because what the banks had were mortgage-based securities that were no good anymore. If they just paid the mortgages using the same money, that in effect would have bailed out the banks.
DJ: That wouldn’t have been a debt cancellation.
DG: Well, I’m just giving an example. It would have had the same effect as a debt cancellation, because they would have printed money to pay the debts. The irony is that they chose instead to give the money directly to the banks and not bail out the mortgage-holders. Which is a pattern that you see over and over again in world history—one of the more dramatic consistencies I’ve noticed in the history of debt: debts between equals are not the same as debts between people who are not equals.
Debts between either poor people or rich people, that they have with each other, can be renegotiated or forgiven. People can be extraordinarily generous, understanding, forgiving when dealing with others like themselves. But debts between social classes, between the rich and the poor, suddenly become a matter of absolute morality. And that’s what we saw; it’s a very, very old pattern.
To read part 2 of the interview, click here.
Vital reading on politics, literature, and more in your inbox. Sign up for our Weekly Newsletter, Monthly Roundup, and event notifications.
Harsher Measures Against Iran Won't Work.
Julian Barnes asks: How much of what we think makes us special is only a trick of memory?
Elisabether Badinter blames "naturalism" for all-consuming motherhood, but she leaves the real culprits off the hook.