Debt

It’s All About The Money

Robert1 Comment

Debt and money, two mainstays of human economies for many hundreds of years. Even without money people can still get in debt: with debt creating a two (or more) way relationship between a debtor and creditor, between the person owing something and the person who leant it. Without cash people might end up paying off their debt by giving hours of their labour, their property or their body. Money just facilitates this process, whether it’s cash in hand or digits on a screen. Because money and debt have been instrumental in human societies for so long it’s hardly surprising that their impacts have stretched far beyond the economic realm. They are also interwoven in our language and relationships.

Take the word ‘should’ for instance. “I really should go to the gym today,” “You really should be nicer to people,” etc. It’s used to indicate obligation, duty or correctness, often in moral situations which concern how we treat other people but also in more mundane situations like getting fit and eating less junk food. Etymologically speaking it relates to the Old English scyld which means ‘guilt’, the German schuld which means ‘guilt‘ and ‘debt’, and the Lithuanian skeleit ‘to be guilty’ and skilti ‘to get into debt’. Thus, a simple word such as should has origins in both finance and morality, in both debt and guilt. Similarly for the verb to owe which we use both financially (“you owe me £5”) and personally (“you owe me a favour”), its history can be found in the Sanskirt ise ‘he owns’ and isah ‘owner, lord, ruler’, and the Old English phrase agan to geldanne ‘to own to yield’ (or ‘to have to repay’). These are two instances of the fusion of the financial and personal. It seems money and relationships go hand in hand.

In a previous post I commented on the book Debt by David Graeber – he highlights the history of debt and also the violence that goes with it. In many instances debt is a threat because those who don’t pay their debts are threatened with so much, e.g. a jail sentence, physical violence, being shunned. Graeber also traces the history to some of the ultimate debtor/creditor relationships, namely masters and slaves, in which the latter owed everything to the former – namely, their lives. This is hardly a happy history and certainly not a peaceful one, and it continues today. Slavery might be abolished (yet still practiced widely) but we still have to give up our time to get money from people with much more of it than us so we can afford life’s necessities. Worse still, because wages can be so bad we often have to take out loans and get in debt to banks to actually be able to buy these things. And when the system stumbles (as it does at every economic crash) the bailiffs come knocking and the reckoning is upon us – we have to pay off our debts one way or another or face the consequences. Jessie J knows all about this as is evidenced in her song Price Tag

“Seems like everyone’s got a price” she sings, in a world where “the sale comes first and the truth comes second.” And isn’t that a shame, that even in non-economic spheres of life, such as friendships, relationships, socialising etc, the ‘logic’ and discourse of money are still so powerful, even though one hopes that these spheres shouldn’t be predicated on the implied threat of violence. Jessie J hopes for something different, a world that’s “not all about the money.” She thinks it’s high time money and economics were put back in their place – an ambitious stance given we have a lot of reconceputalising to do, what with the money discourse being everywhere. But she knows we can do it and she knows that our relationships will be better off for it. “Forget about the price tags,” she sings: “We’ll pay ’em with love tonight.” And I wonder what an economy of love would look like…tbc.

Money Makes The World Go Round

Robert3 Comments

In my previous blog You Don’t Own Me I cited the work of anthropologist David Graeber and his very big book Debt: The First 5000 Years. It’s not quite 5000 pages long but in his tome he explores the origins of money in debt, war and slavery. He suggests that debt existed before money and human societies have been divided between debtors and creditors for a long time. Debt peonage is when someone has to pay off their debts by working for someone else (i.e. if they can’t afford to pay off their debt with cash). It’s also known as debt slavery and people have been doing it throughout history – the priests of Sumerian temples would make peasants work the land and pay with produce in return for being able to live on the land and the Romans would often enslave those they captured and make them work in their houses. Slavery is the ultimate form of ‘ownership’ whereby someone has complete power over someone else’s life (the slave ‘owes’ their life to the their master). However, slavery wasn’t the only way to increase one’s power, money was also a good mechanism.

Let’s say the Roman Empire is expanding and they’ve just conquered Britain, the Roman Emperor won’t want to kill all the Britons because not only will many of them make good house slaves but they can also be used to ensure the British economy keeps going. Of course, that’s a British economy that now serves Rome. What the Emperor does is issue all his soldiers with Roman coins which he can let them spend in Britain. The soldiers will be expected to pay tax and they have to do that with Roman coins, so coinage in this regards is a good way of ensuring the soldier’s money goes back into the Roman Empire’s economy. Meanwhile, the Britons that haven’t been enslaved will want to attract the custom of the soldiers so they’ll get busy making and selling stuff for the soldiers, which will be paid for with Roman coins. Furthermore, the Emperor might also wish to impose a debt on Britain – the war machine costs a lot of money and invading Britain proved quite expensive, so he’ll make them pay it back. Yup, the conqueror is enforcing a debt on the people he just conquered. He can do this because he’s the winner and he’s got all the power in terms of brute military strength (the soldiers) and economically (in terms of all the Roman coins). So this is how you grow an Empire – conquer people, expand your currency and force your conquests into debt. It adds a twist to the famous phrase “man is born free but everywhere he is in chains”…or in debt perhaps.

And so on and so on for thousands of years argues Graeber. Even now we still live in a time of debt – whether it’s the banks offering giant loans to help people buy houses or it’s the World Bank loaning money to developing nations to help them get on their feet whilst ensuring they’ll be in debt for years. However, things are different now because the value of a currency is no longer defined in terms of some underlying precious material (i.e. gold) for which it could be exchanged. It’s not as if for every £5 we have there’s a £5 amount of gold hidden in a vault somewhere. We don’t have real money anymore, instead we have virtual money that exists as numbers on a screen. Sure, we still use coins and notes but those things themselves are worthless, it’s what they stand for that counts. However, as money is virtual it theoretically means there is no limit to how much money we can have – numbers on a screen are limitless after all. So we can keep spending more and more and getting in bigger and bigger amounts of debt for longer and longer, hurrah!

But why this brief history of money? Because money has been and continues to be a big deal – it makes the world go round, or so Liza Minelli sings in Cabaret. Currently, the US dollar is the most powerful currency in the world and the States put a lot of effort into ensuring it remains so (read that as military force, foreign policy and diplomatic effort). Money is one of the most important numbers we’ve got – it’s how we value almost everything, from the price of a lemon through to the price of an hour of someone’s labour. And because money has been such a big part of our societies for so long its effects have reached far beyond the economic realm into the political and personal realms as well. To be continued…