Dr. David Graeber - Debt Jubilee

Dr. David Graeber - Debt Jubilee

An interview with Dr. David Graeber on the subject of debt jubilee. Graeber is a respected anthropologist who teaches anthropology at Goldsmiths university of London, the author in many leading magazines and of a new book about the history of the last 5000 years of debt.

It's in two parts, and a rough transcript is below.

Part I
1) All through out the 20th century there's been a tension between states and markets - free markets or governments and people had to pick a side; all politics was about picking one or the other. This is actually a false proposition as you can't actually have one without the other. Historically, societies that don't have states don't generally have markets. Markets arose as a side effect of bureaucracies and in much of human history they're a side effect of military operations.

2 a) The US debt is a war debt. If you graph military spending and us debt, they correlate perfectly. It's been there since the revolutionary war.

2 b) We're taught in school where money comes from: barter came first, and that was inconvenient so we agreed on something everybody wanted, money. Then came credit. But this is exactly backwards, there are documents of very elaborate compounds interest scheme from ancient Mesopotamia - credit came first. It was only the threat of violence that made money important. When barter did exist it's been observed near universally that it's not the case where, say, an offer is made for 27 chickens for one cow, what tends to happen is one person likes the other's cow and he just gives it to him and asserts think nothing of it, don't even think of giving me anything, but of course that's just being polite, you know you're in their debt, as the ancient saying goes, so maybe one day he'll say do you he likes your pig, or you'll do something or give him something so you feel you're not in his debt any more. This was for every aspect of life and it could be inexact but it didn't really matter, but there's one exception, if you injured some body every culture has a set of very precise rules about how much you have to pay for the loss or injury of various body parts. So debt only becomes exact, in terms of money, under threat of violence.

3) Japan as an obligation society keeps very accurate records of all gifts so they can be repaid, something that can be found in many tribal societies. Even in medieval England money was a very rare thing and we find nearly everything was on credit and this debt to one another tented to be a societal bind that made a community, so debt was seen as a good thing for everybody to have. Obligation debt to a feudal ruler though, although accepted, was not really felt the same way. It wasn't really liked.

4) Potlatch societies of the indigenous Americans had it that the person that gave away the most was revered the most. This was in contrast to the European way of doing things and there were some tremendous disasters because of this. But anthropologists that study barter cultures note that it's seldom if ever exact, and in fact more often than not one person is always trying to outdo the other in being generous. The most extreme case is an ancient Greek record of a Celtic society where feudal leaders would give each other great gives trying to outdo each other, and this maybe out of kindness or it might be a way of intimidating somebody you don't actually like, because they now had to respond with an even larger gift and if somebody had given you a gift so great you could never repay it your only choice was to kill yourself.

5) In most stateless societies, when you do have money it's not usually used to buy things; sometimes it is, but it's not usually its major function, it's usually used to rearrange social arrangements: arrange marriages, to settle feuds, and as a general social lubricant between family and friends - you'd visit your uncle he'd give you something, you'd give him something back. Marriages tended to be big deals between families and lots of things were exchanged. There's a debate in anthropology, is this just buying brides to which the obvious answer is no, you can't resell them. In commercial societies where debt is exact, peoples children have been taken way from them and prostitution ends up being a viable way to reduce an exact debt.

Part II
1) The post WWII compact between society and the bankers was torn to shreds by Thatcher and Reagan. After WWII there was kind of a deal, sometimes called the Keynesian deal: you don't become communists and we'll give you free medical (except in the US), social security, the welfare state, education for your children. Just don't become communists. This compact was between males of the white working class, and the people that actually run the system; citizenship rights were tied to economic rights. Key to that was not only a recognition of labor unions, but that increase in productivity meant an increase in wages and this was true from about 1945 to about 1975. This fell apart in the 70s because of a crisis of inclusion. People besides while males now wanted this - minorities, women, people in the global south but the system didn't have enough resources and it all crashed and the system could no longer provide a reasonable living to all those people according to the deal they'd set up. So now you have a crisis, you have oil shock, then you have financial shock, you have certain visions of ecological catastrophe. The rise of (what is called everywhere but America) neoliberalism typified by Reagan and Thatcher says, ok new deal, no longer is a rise in productivity tied to a rise wages, no longer are economic rights tied to citizenship rights (which meant everybody in the world could have political rights now because it didn't matter) but... you get credit. There's a huge outpouring of various types of credit: 401K, mortgage - everybody should have a house - and the same thing happened in the global south: micro-credit was going to save the third world. And then again there reached a crisis of inclusion: that's what the sub-prime mortgage really is, giving cheap credit to people everybody knew could never pay it back, then they began gambling with that, an the whole thing turned into a giant bubble. Which throws us back into the same structural crisis we had in the seventies: oil shock, followed by financial shock, visions of ecological catastrophe, so the question is, what's next?

2) The nouveau riche kept wanting a successively larger slice of the pie, and since Reagan they've been getting it, which caused a complete lock on class mobility and now America is no longer the land of opportunity an rests with the UK at the bottom of the list, with countries like Sweden having far greater class mobility.

3) The only viable strategy is the biblical concept of jubilee, the re-balancing of everything. The Saudis just did it, that was their reaction to the Arab spring. They simply canceled all debts.

4) Throughout history we've switched back and forth between periods of credit, and periods of cash money. Periods dominated by credit, such as the one we've been living in since Nixon decoupled gold in 1972,

5) Societies in a credit based world tend to favor rules that protect the debtor - the risk is always there of 1-2% of the population going mad and making debt peons out of everybody else. This is the great social evil everybody was afraid of throughout history -- people would fall so deeply in debt they'd sell their waives, their children and themselves into slavery. The American situation isn't that different, we just rent ourselves out instead of selling ourselves into slavery - the ancient Greeks would not have noticed that much of a difference. So they set up some mechanism to make sure things didn't go cray and everything broke down and one of these mechanisms was jubilee. The Mesopotamians used to do this, they'd say "ok, all debts are canceled, all the debt peons go home.". In the Bible it was a fixed rule, every 7 years and every 49 years. And nothing bad happened, the economy kept right on growing.

6) In a credit society money isn't a thing, it's just a bunch of promises we make to each other and if democracy is to mean anything, we can renegotiate it. What we found out in 2008 is if you're AIG of Bank of America you can make trillions of dollars of debt just go away by renegotiating. Now that we know they can do it for the big players, lets do it for everybody and start over.

7) The amount of money paid out to the banks was 100% of GDP, it certainly would have paid off all the mortgages in America, and by doing that you bail out the banks as a side effect.

8) Saudi can do this - they have a king, but in America there's a long way to go because both political parties have been captured by the banks and the class of hedge fund managers and so on, so in a way almost all large corporations are financial corporations. It's a problem. It seems we need some sort of bottom up social movement. The one hopeful thing to point out is that in the past that is always what has happened in periods of virtual credit money, so it will happen eventually. And you can sees stirrings of it in Italy, Greece and Spain, people are going out into the plazas and saying we don't approve of any of the political parties and that we want to start over and that we need a conceptual break and a financial break. Iceland did it and they're doing great, the decided to not pay off their banksters, whereas Ireland did pay them off and they're in terrible shape. You must kick the IMF out. East Asia did it, Latin America did it. The US could do it too.

There's more Graeber to be found here:

There's also a one hour interview with Graeber here:

Article by David Graeber about Occupy Wall Street