The following article was first published in ‘Sofia’ magazine. Sofia is the magazine of the Sea of Faith Network (UK) and is published quarterly. You can find out more about the magazine, and see some articles and excerpts from it, on the Sea of Faith Network website.
The article is written in memory of David Graeber who sadly died in September 2020. David Graeber was, in my view, a modern day prophet.
Photo credit: ANDREJ GRUBAČIĆ
Revisiting ‘Debt: The first 5,000 years’ by David Graeber.
I first read ‘Debt’ when I was starting university in 2011. The timing of the book’s publication couldn’t have been more apposite. The Coalition government was swinging the axe on benefits and public services, the Occupy movement were camped in the City, and the impact of austerity in Greece was in the news. The pandemic prompted me to revisit this book for three reasons.
Firstly, government spending on the pandemic response has reopened the public debate about national debt. Back in 2010 the media reported on this using a household analogy: the UK had overspent and run up a vast debt, which needed to be urgently repaid. In my first economics class, the Professor pointed out that this household analogy was ‘bunkum’, as was the supposed UK debt crisis, saying, ‘most households can’t issue their own currency.’ I worry that in the aftermath of the pandemic, the government will ignore the painful lessons of the past decade.
My second reason for revisiting was a rekindled interest in Graeber’s essay on ‘Bullshit Jobs’ which examines why rising automation of work hasn’t led to more leisure time. The answer, argues Graeber, is that people are spending more time doing ‘pointless jobs’: box ticking, monitoring, keeping up appearances. In lockdown, many office workers are now working from home for the first time. I wonder without the distractions of the office environment and colleagues, how many will have realised their work is not sufficiently meaningful to them.
The final reason is that David Graeber died in September – a real loss both to the academic world and to the many campaigners he inspired. David had an exceptional talent of combining historical insights with a prophetic vision for our world. His writing and speaking was infused with intelligence, humanity and compassion.
Before I read ‘Debt’, my understanding was that humans had started by bartering goods, for example the butcher and baker trade bread for meat. The problem with barter was that it needed a double-coincidence of wants: if the butcher didn’t want bread today, then the baker couldn’t get meat. Money was created to deal with that problem, and systems of credit were developed later, to spare us from carrying around all the coins.
Except, Graeber explains, the archaeological and anthropological evidence suggests that our conventional story has it backwards. Humans developed systems of credit first, and then later created money as a way to exchange those credits.
These early moneyless credit systems included ‘gift economies’, you gave your resources to others for no immediate return, but expecting to receiving something roughly commensurate in the future. A delayed, vague exchange, made possible by trust. Where an exchange isn’t completed simultaneously, someone is left with an ‘obligation’. And that obligation is what we call debt.
Money developed as a way to quantify those debts. Not initially for small everyday transactions, but things like trade, marriages, settling disputes and compensating harms. The exchanges which led to arguments, and lawyers, were the first to be quantified and recorded – our word ‘to pay’ is derived from the words for pacify and appease.
In Sofia 136, ‘Act of God?’ Dominic Kirkham wrote about the mysterious pre-Sumerian clay tokens found in the Middle East, dating from as early as 9,000BCE. These were found to be records of trading transactions. More recently in the UK, we had tally sticks as IOUs instead of clay tokens. The value of the debt was recorded by notches carved along the stick. The tally stick was then split in half, the ‘stock’ half was kept by the creditor and the ‘stub’ kept by the debtor. The Exchequer accounted for taxes in this way, but rather than wait for the tax to be paid, it would sell on the stocks immediately. The people who bought them in turn used them as payment for things, and tally sticks came to be traded many times over, far beyond their original transactions.
This is the basis on which our banking system operates. The Bank of England was established in 1694, to loan £1,200,000 to the government to fund its wars. In exchange for the loan, the government gave the Bank of England a monopoly to advance IOUs based on this unpaid debt. The money we use today originates in an IOU from the Bank to us, which the Bank would (in theory) pay us using the money the government owed them.
Cash makes up just 3% of the money in our economy today. Commercial banks create new money by making a loan and creating a deposit in the borrower’s bank account. Money created by loans, for example a mortgage, is new but it doesn’t quite come from ‘thin air’. It is the product of the bank and borrower’s expectation that future wages will pay it off. People are in effect borrowing against their own future value.
When revisiting this book, I noticed parallels between religion and money. In debates about the nature of money, some people are disturbed by the idea that money is based on the ‘thin air’ of shared belief and trust. They want the solidity of cold hard gold, something to make it ‘real’. I see a similar reaction sometimes when people hear that I’m a Christian who doesn’t believe in the existence of a supernatural god. People think this can’t be enough, that belief needs ‘solidity’ to make it real.
Public debate has moved on from whether money needs to be backed by silver or gold, but I wonder if it continues in talk about crypto-currencies like bitcoin. Bitcoin sounds like a gold replacement, the clue being in the term ‘bit-mining’, but it has turned out to be even more volatile to the animal spirits of man, and to have even less intrinsic value. I’ve seen critics describe it as a cult: it’s only worth anything if other suckers will buy into it. But as Frank Zappa said, ‘the only difference between a religion and a cult is the amount of real estate they own’. I think crypto-currency is cultish, but I’ll accept that other currencies are religions. A pound sterling would be worth nothing if you and the shopkeeper don’t share a belief that someone else will want it tomorrow.
In modern economies, states control money. One explanation, offered by primordial debt theorists, is that all citizens are in a complex web of debts. Primordial debt theorists claim that since the earliest societies, we have identified these debts and paid interest on them, for example: debts to nature (paid through ritual) to the creators of knowledge (through learning) to our ancestors (by becoming parents) and to humanity as a whole (by providing hospitality).
In the past, humans understood these cosmic debts to be owed to the gods. Primordial debt theorists argue that in our modern age, the state has become the secular god and the guardian of that cosmic debt.
The logic of a debt is that it can be repaid. Once it is repaid, the exchange is complete. Both sides can simply walk away. With this logic, how could a cosmic debt, a debt to society or a debt to our parents ever be repaid. Even if it were possible, it wouldn’t be desirable. The logic of exchanges is insufficient to capture our relationships. Graeber writes about relations of hierarchy but also the ‘everyday communism’ seen in families, workplaces and communities, which forms an essential base for all human societies.
Graeber isn’t convinced by primordial debt theory, warning that our myths tell us more about ourselves than the ancients. In identifying cosmic debt, Graeber says we realise how, ‘the language of the marketplace has come to pervade every aspect of human life—even to provide the terminology for the moral and religious voices ostensibly raised against it.’
The Christianity I admire rejects the cruelty of markets and accumulation of wealth, I like the Jesus who said ‘blessed are the poor’ and meant it. But I’m also aware that Christian texts treat debt and sin as synonymous, including in the Lord’s prayer, which is translated as ‘forgive us our debts, as we forgive our debtors’ but prayed as trespasses or sins. Graeber argues that even the very core of the Christian message – salvation itself, the sacrifice of God’s own son to rescue humanity from eternal damnation, has now been framed in the language of a financial transaction. I often hear preachers say, ‘Jesus died to pay for your sins.’
Revisiting debt, I have been struck how easy it is to think of money and religion as ‘natural’ forces, existing separately from humankind. Religion has the hand of god, and money has the invisible hand of the market. But both are ultimately sustained and created by shared human beliefs and both can reflect us as their creators.
I’m put off primordial debt theory for different reasons to Graeber, it ‘stinks’ of original sin to me. But I think a sense of primordial gratitude, and the obligations it generates, is something I could live with.
David Graeber’s radio adaptation of Debt is available on BBC Sounds at https://www.bbc.co.uk/sounds/series/b054zdp6