Debt (36 page)

With the appearance of money, it could also become unclear what was a gift, and what a loan. On the one hand, even with gifts, it was always considered best to return something slightly better than one had received.
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On the other hand, friends do not charge one another interest, and any suggestion that they might was sure to rankle. So what’s the difference between a generous return gift and an interest payment? This is the basis of one of the most famous Nasruddin stories, one that appears to have provided centuries of amusement for peasants across the Mediterranean basin and adjoining regions. (It is also, I might note, a play on the fact that in many Mediterranean languages, Greek included, the word for “interest” literally means “offspring.”)

In a heroic system, it is only debts of honor—the need to repay gifts, to exact revenge, to rescue or redeem friends or kinsmen fallen prisoner—that operate completely under a logic of tit-for-tat exchange. Honor is the same as credit; it’s one’s ability to keep one’s promises, but also, in the case of a wrong, to “get even.” As the last phrase implies, it was a monetary logic, but money, or anyway money-like relations, are confined to this. Gradually, subtly, without anyone completely understanding the full implications of what was happening, what had been the essence of moral relations turned into the means for every sort of dishonest stratagem.

We know a little about it from trial speeches, many of which have survived. Here is one from the fourth century, probably around 365 bc. Apollodorus was a prosperous but low-born Athenian citizen (his father, a banker, had begun life as a slave) who, like many such gentlemen, had acquired a country estate. There he made a point of making friends with his closest neighbor, Nicostratus, a man of aristocratic origins, though currently of somewhat straitened means. They acted as neighbors normally did, giving and borrowing small sums, lending each other animals or slaves, minding each other’s property when one was away. Then one day Nicostratus ran into a piece of terrible luck. While trying to track down some runaway slaves, he was himself captured by pirates and held for ransom at the slave market on the island of Aegina. His relatives could only assemble part of the price, so he was forced to borrow the rest from strangers in the market. These appear to have been professionals who specialized in such loans, and their terms were notoriously harsh: if not repaid in
thirty
days, the sum doubled; if not
repaid at all, the debtor became the slave of the man who had put up the money for his redemption.

Tearfully, Nicostratus appealed to his neighbor. All his possessions were already pledged now to one creditor or another; he knew Apollodorus wouldn’t have that much cash lying around, but could his dear friend possibly put up something of his own by way of security? Apollodorus was moved. He would be happy to forgive all debts Nicostratus already owed him, but the rest would be difficult. Still, he would do his best. In the end, he arranged to himself take a loan from an acquaintance of his, Arcesas, on the security of his town-house, at 16 percent annual interest, so as to be able to satisfy Nicostratus’s creditors while Nicostratus himself arranged a friendly, no-interest
eranos
loan from his own relatives. But before long, Apollodorus began to realize that he had been set up. The impoverished aristocrat had decided to take advantage of his nouveau-riche neighbor; he was actually working with Arcesas and some of Apollodorus’s enemies to have him falsely declared a “public debtor,” that is, someone who had defaulted on an obligation to the public treasury. This would have first of all meant that he would lose his right to take anyone to court (i.e., his deceivers, to recover the money), and second, would give them a pretext to raid his house to remove his furniture and other possessions. Presumably, Nicostratus had never felt especially comfortable being in debt to a man he considered his social inferior. Rather like Egil the Viking, who would rather kill his friend Einar than have to compose an elegy thanking him for an overly magnificent gift, Nicostratus appears to have concluded that it was more honorable, or anyway more bearable, to try to extract the money from his lowly friend through force and fraud than to spend the rest of his life feeling beholden. Before long, things had indeed descended to outright physical violence, and the whole matter ended up in court.
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The story has everything. We see mutual aid: the communism of the prosperous, the expectation that if the need is great enough, or the cost manageable enough, friends and neighbors will help one another.
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And most did, in fact, have circles of people who would pool money if a crisis did arise: whether a wedding, a famine, or a ransom. We also see the omnipresent danger of predatory violence that reduces human beings to commodities, and by doing so introduces the most cutthroat kinds of calculation into economic life—not just on the part of the pirates, but even more so, perhaps, on those moneylenders lurking by the market offering stiff credit terms to anyone who came to ransom their relatives but found themselves caught short, and who then could appeal to the state to allow them to hire men with weapons to
enforce the contract. We see heroic pride, which sees too great an act of generosity as itself a kind of belittling assault. We see the ambiguity among gifts, loans, and commercial credit arrangements. Neither does the way things played out in this case seem particularly unusual, except perhaps for Nicostratus’s extraordinarily ingratitude. Prominent Athenians were always borrowing money to pursue their political projects; less-prominent ones were constantly worrying about their debts, or how to collect from their own debtors.
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Finally, there is another, subtler element here. While everyday market transactions, at shops or stalls in the agora, were here as elsewhere typically conducted on credit, the mass production of coinage permitted a degree of anonymity for transactions that, in a pure credit regime, simply could not exist.
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Pirates and kidnappers do business in cash—yet the loan sharks at Aegina’s marketplace could not have operated without them. It is on this same combination of illegal cash business, usually involving violence, and extremely harsh credit terms, also enforced through violence, that innumerable criminal underworlds have been constructed ever since.

In Athens, the result was extreme moral confusion. The language of money, debt, and finance provided powerful—and ultimately irresistible—ways to think about moral problems. Much as in Vedic India, people started talking about life as a debt to the gods, of obligations as debts, about literal debts of honor, of debt as sin and of vengeance as debt collection.
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Yet if debt was morality—and certainly at the very least it was in the interest of creditors, who often had little legal recourse to compel debtors to pay up, to insist that it was—what was one to make of the fact that money, that very thing that seemed capable of turning morality into an exact and quantifiable science, also seemed to encourage the very worst sorts of behavior?

It is from such dilemmas that modern ethics and moral philosophy begin. I think this is true quite literally. Consider Plato’s
Republic
, another product of fourth-century Athens. The book begins when Socrates visits an old friend, a wealthy arms manufacturer, at the port of Piraeus. They get into a discussion of justice, which begins when the old man proposes that money cannot be a bad thing, since it allows those who have it to be just, and that justice consists in two things: telling the truth, and always paying one’s debts.
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The proposal is easily demolished. What, Socrates asks, if someone lent you his sword, went violently insane, and then asked for it back (presumably, so he could kill someone)? Clearly it can never be right to arm a lunatic whatever
the circumstances.
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The old man cheerfully shrugs the problem off and heads off to attend to some ritual, leaving his son to carry on the argument.

The son, Polemarchus, switches gears: clearly his father hadn’t meant “debt” in the literal sense of returning what one has borrowed. He meant it more in the sense of giving people what is owed to them; repaying good with good and evil with evil; helping one’s friends and hurting one’s enemies. Demolishing this one takes a little more work (are we saying justice plays no part in determining who one’s friends and enemies are? If so, wouldn’t someone who decided he had no friends, and therefore tried to hurt everyone, be a just man? And even if you did have some way to say for certain that one’s enemy really is an intrinsically bad person and deserves harm, by harming him, do you not thus make him worse? Can turning bad people into even worse people really be an example of justice?) but it is eventually accomplished. At this point a Sophist, Thrasymachos, enters and denounces all of the debaters as milky-eyed idealists. In reality, he says, all talk of “justice” is mere political pretext, designed to justify the interests of the powerful. And so it should be, because insofar as justice exists, it is simply that: the interest of the powerful. Rulers are like shepherds. We like to think of them as benevolently tending their flocks, but what do shepherds ultimately
do
with sheep? They kill and eat them, or sell the meat for money. Socrates responds by pointing out that Thrasymachos is confusing the art of tending sheep with the art of profiting from them. The art of medicine aims to improve health, whether or not doctors get paid for practicing it. The art of shepherding aims to ensure the well-being of sheep, whether or not the shepherd (or his employer) is also a businessman who knows how to extract a profit from them. Just so with the art of governance. If such an art exists, it must have its own intrinsic aim apart from any profit one might also get from it, and what can this be other than the establishment of social justice? It’s only the existence of money, Socrates suggests, that allows us to imagine that words like “power” and “interest” refer to universal realities that can be pursued in their own right, let alone that all pursuits are really ultimately the pursuit of power, advantage, or self-interest.
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The question, he said, is how to ensure that those who hold political office will do so not for gain, but rather for honor.

I will leave off here. As we all know, Socrates eventually gets around to offering some political proposals of his own, involving philosopher kings; the abolition of marriage, the family, and private property; selective human breeding boards. (Clearly, the book was meant to annoy its readers, and for more than two thousand years, it has
succeeded brilliantly.) What I want to emphasize, though, is the degree to which what we consider our core tradition of moral and political theory today springs from this question: What does it mean to pay our debts? Plato presents us first with the simple, literal businessman’s view. When this proves inadequate, he allows it to be reframed in heroic terms. Perhaps all debts are really debts of honor after all.
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But heroic honor no longer works in a world where (as Apollodorus sadly discovered) commerce, class, and profit have so confused everything that peoples’ true motives are never clear. How do we even know who our enemies are? Finally, Plato presents us with cynical realpolitik. Maybe nobody really owes anything to anybody. Maybe those who pursue profit for its own sake have it right after all. But even that does not hold up. We are left with a certainty that existing standards are incoherent and self-contradictory, and that
some
sort of radical break would be required in order to create a world that makes any logical sense. But most of those who seriously consider a radical break along the lines that Plato suggested have come to the conclusion that there might be far worse things than moral incoherence. And there we have stood, ever since, in the midst of an insoluble dilemma.