In 2008, most Americans thought the world order would collapse.
By the end of the financial crisis of 2007-2008, the banks had failed and the United States government had failed. A massive bailout was still weeks away with thousands of Americans having “occupied” the streets with tumultuous energy, and no one knew if the status quo that had perpetuated the system would survive the year. But, thanks to the efforts of a massive bailout, a massive crisis of (and need to critically rethink) the American empire was averted.
In 2000, with the anti-globalization movement in full swing, white-clad Tute Bianche members descended on Seattle and New York, the world was also at a precipice––and nothing seemed to happen. How did we end up in this situation?
While credit systems of finance have existed for nearly as long as human societies, debt as a concept is only about 5,000 years old. Where does debt come from?
To offer a potted view of monetary history: earlier human societies (e.g. Sumer, Egypt) relied on virtual systems of monetary exchange––often between close-knit communities. But, with the expansion of empire during the Middle Ages, it became expedient to have a uniform currency with which to pay foreign soldiers, creating the modern, impersonal notion of the market in what historian Geoffrey Ingham has called “the coinage-slavery industrial complex” or “metallism.”
Premodern credit systems were crushed less by their own internal contradictions than by the expensive weight of Alexander’s armies. With the expansion of colonial empires (involving global wars of destruction, conquest, and enslavement), precious metals became available and reinforced the ascendant power of a few global empires. Debt is a subtle operation of global political power, demonstrating the historical link between the emergence of capitalist structures of temporality, wage labor, and enslavement.
Unlike previous ages where financial institutions protected the interests of debtors, our modern institutions seek to protect the interests of creditors. Institutions like the International Monetary Fund and the World Bank exist in order to manage the exchange of debt between the global powers and the rest of the world. For example, when France unsuccessfully invaded Haiti in the nineteenth century, the victorious revolutionary Haitians were stuck with France’s bill of failed conquest, making that country synonymous with poverty ever since.
At the same time, this logic of creditors can also operate in the exact opposite way. The United States is perhaps one of the most heavily indebted countries in the world. Yet, its creditors seem to exert little influence over its activities; if anything, foreign lending powers live under the egress of American control, partially due to the global military bases financed by large sums of money.
To offer a tentative answer to our opening question––who owes what to whom?––modern humans seem to owe one another a financial obligation (as opposed to say Kant’s formula of humanity in which other humans are seen as ethical ends in themselves). However, the nature of your financial obligation seems to depend entirely on who you are, and more importantly, what country you are from. In anthropologist David Graeber’s words, “[t]here is no better way to justify unequal power relations than by reframing them in the language of debt … because it immediately makes it seem that it’s the victim which is doing something wrong.”
Debt, having existed for thousands of years, only becomes weaponized as a form of control with the ascendance of surplus wealth and a global capitalist economic system. One wonders what kind of debts one might owe in a society not controlled by finance, violence, and globalized power.
Works Cited
Graeber, David. Debt: The First 5,000 Years. Brooklyn, N.Y: Melville House, 2011.