An amazing and important book, offering genuine fresh perspectives on not only the history of debt but also human relations in a wider context. Very readable and thoroughly recommended.

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Dates 24 February 2012 – 20 July 2012
Time spent reading 15 hours, 50 minutes
Highlights 82
Comments 25
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I could have begun by explaining how these loans had originally been taken out by unelected dictators who placed most of it directly in their Swiss bank accounts, and ask her to contemplate the justice of insisting that the lenders be repaid, not by the dictator, or even by his cronies, but by literally taking food from the mouths of hungry children.

to this day, the Malagasy people are still held to owe France money, and the rest of the world accepts the justice of this arrangement.

insofar as all human relations involve debt, they are all morally compromised.

The United States was one of the last countries in the world to adopt a law of bankruptcy: despite the fact that in 1787, the Constitution specifically charged the new government with creating one, all attempts were rejected on “moral grounds” until 1898.

The difference between a debt and an obligation is that a debt can be precisely quantified. This requires money.

Begg, Fischer and Dornbuch

Andrew Doran Andrew Doran

Names I recognise from the textbook we used in our economics lessons at school!

Henrik Berggren Henrik Berggren

Back then they were used as good examples or what?

Henrik Berggren Henrik Berggren

Ah, I thought the names sounded like big bank bosses :)

Andrew Doran Andrew Doran

At school we always referred to textbooks by the authors' names. Probably because they were all called something like 'Economics' as in the case here!

“No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing.”

there is good reason to believe that barter is not a particularly ancient phenomenon at all, but has only really become widespread in modern times.

We did not begin with barter, discover money, and then eventually develop credit systems. It happened precisely the other way around.

If money is a just a yardstick, what then does it measure? The answer was simple: debt. A coin is, effectively, an IOU.

the value of a unit of currency is not the measure of the value of an object, but the measure of one’s trust in other human beings.

To this day, this loan has never been paid back. It cannot be. If it ever were, the entire monetary system of Great Britain would cease to exist.

it is very clear that markets did spring up around ancient armies

Money was no more ever “invented” than music or mathematics or jewelry.

few nowadays even remember what The Wonderful Wizard of Oz was originally supposed to be about.

Andrew Doran Andrew Doran

Fascinating! Wikipedia doesn't agree that this was the original intent of the author, although it is documented there:

A man, being born, is a debt; by his own self he is born to Death, and only when he sacrifices does he redeem himself from Death.

the “tribute” of sacrifice could be seen as a kind of interest payment, with the life of the animal substituting temporarily for what’s really owed, which is ourselves—a mere postponement of the inevitable.

there is a connection between money (German Geld), indemnity or sacrifice (Old English Geild), tax (Gothic Gild) and, of course, guilt.

Andrew Doran Andrew Doran

As well as British government bonds, which are known as gilts.

We don’t know precisely when and how interest-bearing loans originated, since they appear to predate writing.

it is significant that the Sumerian word amargi, the first recorded word for “freedom” in any known human language, literally means “return to mother”—since this is what freed debt-peons were finally allowed to do.

when Americans speak of paying their debt to society, they are not thinking of their responsibilities to people who live in Sweden.

money is almost always something hovering between a commodity and a debt-token.

the reigning conviction is that the tribe only exists at all only because of the sacrifices and achievements of its ancestors—and that people have to pay them back with sacrifices and achievements.

Andrew Doran Andrew Doran

Finding this idea fascinating, that people feel they have a debt to the people and deeds that have gone before and need to pay it back. I feel this for my parents, less so for my grandparents but I'm not so sure beyond that...

We are terrified of the ancestors, and the stronger and more powerful a community becomes, the more powerful they seem to be, until finally, “the ancestor is necessarily transfigured into a god.”

It all makes perfect sense if you start from Nietzsche’s initial premise. The problem is that the premise is insane.

It is rather striking to think that the very core of the Christian message, salvation itself, the sacrifice of God’s own son to rescue humanity from eternal damnation, should be framed in the language of a financial transaction.

Andrew Doran Andrew Doran


calculations of sin, penance, and absolution, the Devil and St. Peter with their rival ledger books, usually accompanied by the creeping feeling that it’s all a charade because the very fact that we are reduced to playing such a game of tabulating sins reveals us to be fundamentally unworthy of forgiveness.

Andrew Doran Andrew Doran

A charade indeed.

“One good turn deserves another” is a pleasant sentiment, but “I’ll scratch your back, you scratch mine” is shorthand for political corruption.

it’s one of the scandals of capitalism that most capitalist firms, internally, operate communistically.

communism is the foundation of all human sociability.

for most human beings, the most pleasurable activities almost always involve sharing something: music, food, liquor, drugs, gossip, drama, beds. There is a certain communism of the senses at the root of most things we consider fun.

It’s understandable that dealings with potentially hostile strangers should encourage an all-or-nothing logic, a tension preserved even in English in the etymology of the words “host,” “hostile,” “hostage,” and indeed “hospitality,” all of which are derived from the same Latin root.

Exchange, then, implies formal equality—or at least, the potential for it. This is precisely why kings have such trouble with it.

Andrew Doran Andrew Doran

Better to give gifts to kings.

because he does not actually exist.

Andrew Doran Andrew Doran

WHAT?! But.... *sob*.

The genealogy of the modern redistributive state—with its notorious tendency to foster identity politics—can be traced back not to any sort of “primitive communism” but ultimately to violence and war.

We are all communists with our closest friends, and feudal lords when dealing with small children.

money can be seen, in human economies, as first and foremost the acknowledgment of the existence of a debt that cannot be paid.

Andrew Doran Andrew Doran

Human economies in this context are pre-market economies.

It is a common understanding among many traditional African peoples that human beings do not simply die without a reason. If someone dies, someone must have killed them.

it was only when violence was brought into the equation that there was any question of buying and selling people.

He invites you to eat food in his house alone with him, and when you begin the meal he sets before you two dishes of sauce, one of which contains cooked human flesh …

Andrew Doran Andrew Doran

Om nom nom...

Now, if one is simply trying to imagine the worst thing that could possibly happen to someone, surely, being forced to dine on the mutilated corpses of one’s own children would, anywhere, be pretty high on the list.

Andrew Doran Andrew Doran


one of the effects of the slave trade is that people who don’t actually live in Africa are often left with an image of that continent as an irredeemably violent, savage place—an image that has had disastrous effects on those who do live there.

to make a human being an object of exchange, one woman equivalent to another for example, requires first of all ripping her from her context; that is, tearing her away from that web of relations that makes her the unique conflux of relations that she is, and thus, into a generic value capable of being added and subtracted and used as a means to measure debt.

Andrew Doran Andrew Doran

An eye for an eye is never fair, there will always be a difference between the two people involved.

honor is, by definition, something that exists in the eyes of others. To be able to recover it, then, a slave must necessarily adopt the rules and standards of the society that surrounds him, and this means that, in practice at least, he cannot absolutely reject the institutions that deprived him of his honor in the first place.

“if stung by another man’s bee, one must calculate the extent of the injury, but also, if one swatted it in the process, subtract the replacement value of the bee”

Andrew Doran Andrew Doran

Medieval Irish law code. How splendid!

What is it, then, about the rise of money and markets that cause so many men to become so uneasy about sex?

The Assyrian habit of veiling was not widely adopted in the Middle East, but it was adopted in Greece. As much as it flies in the face of our stereotypes about the origins of “Western” freedoms, women in democratic Athens, unlike those of Persia or Syria, were expected to wear veils when they ventured out in public.

property is not really a relation between a person and a thing. It’s an understanding or arrangement between people concerning things.

Andrew Doran Andrew Doran

Subtle but true. Owning my house isn't a relationship between me and the building, it's a relationship between me and any of you reading this comment that I own the house. It's mine, not yours!

We are so used to the idea of “having” rights—that rights are something one can possess—that we rarely think about what this might actually mean.

one man’s right is simply another’s obligation.

There is a shape to the past, and it is only by understanding it that we can begin to have a sense of the historical opportunities that exist in the present.

Coinage appears to have arisen independently in three different places, almost simultaneously

a heavily armed itinerant soldier is the very definition of a poor credit risk.

The origins of interest will forever remain obscure, since they preceded the invention of writing.

It’s well known that the Rosetta Stone, written both in Greek and Egyptian, proved to be the key that made it possible to translate Egyptian hieroglyphics. Few are aware of what it actually says. The stela was originally raised to announce an amnesty, both for debtors and for prisoners, declared by Ptolemy V in 196 bc.

Let us define the Axial Age, then, as running from 800 bc to 600 ad.

Andrew Doran Andrew Doran

When I was a child, any year BC seemed to be so unthinkably far in the past. It no longer seems so distant to me and I'm not sure why. Greater awareness of much vaster spans of time? The realisation that it isn't an unfeasible number of generations from now to back then?

the core period of Jasper’s Axial age—the lifetimes of Pythagoras, Confucius, and the Buddha—corresponds almost exactly to the period in which coinage was invented. What’s more, the three parts of the world where coins were first invented were also the very parts of the world where those sages lived

Andrew Doran Andrew Doran

Of coins and sages...

Taking pity on the hungry wolf, Wenshuang announced, “I do not covet this filthy bag of meat. I give it over to you that I may quickly acquire a body of more enduring strength. This donation will help benefit us both.”

China was unusual because philosophy there began with debates about ethics and only later turned to speculations about the nature of the cosmos. In both Greece and India, cosmological speculation came first.

during publc emergencies, Greek city-states would occasionally strike coins made entirely of bronze or tin, which everyone would agree, while the emergency lasted, to treat as if they were really made of silver.

There were decades in Chinese history when the rate of recorded peasant uprisings was roughly 1.8 per hour.

from the perspective of any other great tradition, the difference between Christianity and Islam is almost negligible.

it’s quite possible to turn honor into money, almost impossible to convert money into honor.

The great discovery in this case was the notion of interesse, which is where our word “interest” originally comes from: a compensation for loss suffered because of late payment.

“The shirt is five pesos. Right? Very well. And as you can’t pay for it, that’s five pesos. And as you remain in my debt for the five pesos, that’s five pesos. And as I shall never have the money from you, that’s five pesos. So that makes five and five and five and five. That’s twenty pesos. Agreed?”

Andrew Doran Andrew Doran

“Yes, patrón, agreed.”

During the first years after the conquest, the slave traffic flourished, and slaves often changed master. They produced so many marks on their faces, in addition to the royal brand, that they had their faces covered with letters, for they bore the marks of all who had bought and sold them.

Andrew Doran Andrew Doran


the United Nations, for example, will urge poor countries to make education free and available to everyone, and then the International Monetary Fund (which is, legally, actually a part of the United Nations) will insist that those same countries do exactly the opposite, imposing school fees as part of broader “economic reforms” as a condition of refinancing the country’s loans.

The executives who make decisions can argue—and regularly do—that, if it were their own money, of course they would not fire lifelong employees a week before retirement, or dump carcinogenic waste next to schools. Yet they are morally bound to ignore such considerations, because they are mere employees whose only responsibility is to provide the maximum return on investment for the company’s stockholders. (The stockholders, of course, are not given any say.)

Andrew Doran Andrew Doran

Fiduciary duty.

Under Elizabeth, for example, the punishment for vagrancy (unemployment) was, for first offense, to have one’s ears nailed to a pillory; for repeat offenders, death.

It was only with the creation of the Bank of England in 1694 that one can speak of genuine paper money

Locke insisted that one can no more make a small piece of silver worth more by relabeling it a “shilling” than one can make a short man taller by declaring there are now fifteen inches in a foot.

both politics and magic tend, just about everywhere, to be surrounded by a certain halo of fraud.

both the relation between master and slave, and between employer and employee, are in principle impersonal: whether you’ve been sold or you’re simply rented yourself out, the moment money changes hands, who you are is supposed to be unimportant; all that’s important is that you are capable of understanding orders and doing what you’re told.

Andrew Doran Andrew Doran

The affinity between wage labour and slavery.

Contrary to popular belief, the U.S. government can’t “just print money,” because American money is not issued by the government at all, but by private banks, under the aegis of the Federal Reserve System.

monetary policy is endlessly arcane, and it does sometimes seem, intentionally so.

The essence of U.S. military predominance in the world is, ultimately, the fact that it can, at will, drop bombs, with only a few hours’ notice, at absolutely any point on the surface of the planet.

When Saddam Hussein made the bold move of singlehandedly switching from the dollar to the euro in 2000, followed by Iran in 2001, this was quickly followed by American bombing and military occupation.

the great crash of 2008

Andrew Doran Andrew Doran

I wonder if this is how it will come to be colloquially known.

There is very good reason to believe that, in a generation or so, capitalism itself will no longer exist—most obviously, as ecologists keep reminding us, because it’s impossible to maintain an engine of perpetual growth forever on a finite planet, and the current form of capitalism doesn’t seem to be capable of generating the kind of vast technological breakthroughs and mobilizations that would be required for us to start finding and colonizing any other planets.

Andrew Doran Andrew Doran

This encapsulates exactly what I fear for most for my two children. (Well, alongside easy access to unsuitable stuff on the Internet.) During and since the recent financial crisis we have failed to come up with any better ideas.

In the days of Solon the Athenian, of ancient Rome’s agrarian laws, and of the Middle Ages, the creditors were by and large the rich and the debtors the poor. But in this age of bonds and debentures, mortgage banks, saving banks, life insurance policies, and social security benefits, the masses of people with more moderate income are rather themselves creditors.

the underlying assumption—that work is by definition virtuous, since the ultimate measure of humanity’s success as a species is its ability to increase the overall global output of goods and services by at least 5 percent per year. The problem is that it is becoming increasingly obvious that if we continue along these lines much longer, we’re likely to destroy everything.

The real question now is how to ratchet things down a bit, to move toward a society where people can live more by working less.