Debt (49 page)

Recall an idea from earlier in the book: exchange, unless it’s an instantaneous cash transaction, creates debts. Debts linger over time. If you imagine all human relations as exchange, then insofar as people do have ongoing relations with one another, those relations are laced with debt and sin. The only way out is to annihilate the debt, but then social relations vanish too. This is quite in accord with Buddhism, whose ultimate aim is indeed the attainment of “emptiness,” absolute liberation, the annihilation of all human and material attachments, since these are all ultimately causes of suffering. For Mahayana Buddhists, however, absolute liberation cannot be achieved by any one being independently; the liberation of each depends on all the others; therefore, until the end of time, such matters are in a certain sense always in suspension.

In the meantime, exchange dominates: “One purchases felicity, and sells one’s sins, just as in commercial operations.” Even acts of charity and self-sacrifice are not purely generous; one is purchasing “merit” from the bodhisattvas.
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The notion of infinite debt comes in when this logic slams up against the Absolute, or, one might perhaps better say, against something that utterly defies the logic of exchange. Because there are things that do. This would explain, for instance, the odd urge to first quantify the exact amount of milk one has absorbed at one’s mother’s breast, and then to say that there is no conceivable way to repay it. Exchange implies interaction between equivalent beings. Your mother, on the other hand, is not an equivalent being. She created you out of her own flesh. This is exactly the point that I suggested the Vedic authors were subtly trying to make when they talked about “debts” to the gods: of course you cannot really “pay your debt to the universe”—that would imply that (1) you and (2) everything that exists (including you) are in some sense equivalent entities. This is clearly absurd. The closest you can come to repayment is to simply recognize that fact. Such recognition is the true meaning of sacrifice. Like Rospabé’s original money, a sacrificial offering is not a way to pay a debt, but a way to acknowledge the impossibility of the idea that there could ever be repayment:

I’ve also argued that any system of exchange is always necessarily founded on something else, something that, in its social manifestation at least, is ultimately communism. With all those things that we treat as eternal, that we assume will always be there—our mother’s love, true friendship, sociality, humanity, belonging, the existence of the cosmos—no calculation is necessary, or even ultimately possible; insofar as there is give and take, they follow completely different principles. What, then, happens to such absolute and unlimited phenomena when one tries to imagine the world as a set of transactions—as exchange? Generally, one of two things. We either ignore or deify them.
(Mothers, and caregiving women in general, are a classic case in point.) Or we do both. What we treat as eternal in our actual relations with one another vanishes and reappears as an abstraction, an absolute.
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In the case of Buddhism, this was framed as the inexhaustible merit of bodhisatt-vas, who exist, in a certain sense, outside of time. They are at once the model for the Inexhaustible Treasuries, and also their practical foundation: one can only repay one’s endless karmic debt, or one’s infinite milk-debt, by drawing on this equally infinite pool of redemption, which, in turn, becomes the basis for the actual material funds of the monasteries, which are equally eternal—a pragmatic form of communism, in fact, since they were vast pools of wealth collectively owned and collectively managed: the center of vast projects of human cooperation, which were assumed to be similarly eternal. Yet at the same time—here I think Gernet is right—this communism became the basis, in turn, of something very much like capitalism. The reason was, above all, the need for constant expansion. Everything—even charity—was an opportunity to proselytize; the Dharma had to grow, ultimately, to encompass everyone and everything, in order to effect the salvation of all living beings.

The Middle Ages were marked by a general move toward abstraction: real gold and silver ended up largely in churches, monasteries, and temples, money became virtual again, and at the same time, the tendency everywhere was to set up overarching moral institutions meant to regulate the process and, in particular, to establish certain protections for debtors.

China was unusual in that it was one place where an Axial Age empire managed to survive—though at first, only barely. Chinese governments did manage to keep coins in circulation in most places most of the time. This was made easier by their reliance exclusively on small-denomination coins made of bronze. Even so, it clearly took enormous efforts.

As usual, we don’t know a lot about how everyday economic transactions took place, but what we do know suggests that in small-scale transactions, coins were probably most often used in dealing with strangers. As elsewhere, local shopkeepers and merchants extended credit. Most accounts seem to have been kept through the use of tally sticks, strikingly similar to those used in England, except that rather than hazelwood they were usually made of a split piece of notched bamboo. Here, too, the creditor took one half, and the debtor held the
other; they were joined at the moment of repayment, and often broken afterward to mark the cancellation of the debt.
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To what degree were they transferable? We don’t really know. Most of what we do know is from casual references in texts that are mainly about something else: anecdotes, jokes, and poetic allusions. The great collection of Taoist wisdom, the
Leizi
, probably written during the Han dynasty, contains one such:

Rather like someone who finds a key and figures “just as soon as I can figure out which lock …”
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Another story tells of how Liu Bang, a bibulous local constable and future founder of the Han dynasty, used to go on all-night drinking binges, running up enormous tabs. Once, while he lay collapsed in a drunken stupor in a wine-shop, the owner saw a dragon hovering over his head—a sure sign of future greatness—and immediately “broke the tally,” forgiving him his accumulated drinking debts.
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Tallies weren’t just used for loans, but for any sort of contract—which is why early paper contracts also had to be cut in half and one half kept by each party.
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With paper contracts, there was a definite tendency for the creditor’s half to function as an IOU and thus become transferable. By 806 ad, for instance, right around the apogee of Chinese Buddhism, merchants moving tea over long distances from the far south of the country and officials transporting tax payments to the capital, all of them concerned with the dangers of carrying bullion over long distances, began to deposit their money with bankers in the capital and devised a system of promissory notes. They were called “Flying Cash,” also divided in half, like tallies, and redeemable for cash in their branches in the provinces. They quickly started passing from hand to hand and operated something like currency. The government first tried to forbid their use, then a year or two later—and this became a familiar pattern in China—when it realized that it could not suppress them, switched gears and established a bureau empowered to issue such notes themselves.
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By the early Song dynasty (960–1279 ad), local banking operations all over China were running similar operations, accepting cash and bullion for safekeeping and allowing depositors to use their receipts as
promissory notes, as well as trading in government coupons for salt and tea. Many of these notes came to circulate as de facto money.
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The government, as usual, first tried to ban the practice, then control it (granting a monopoly to sixteen leading merchants), then, finally, set up a government monopoly—the Bureau of Exchange Medium, established in 1023—and before long, aided by the newly invented printing press, was operating factories in several cities employing thousands of workers and producing literally millions of notes.
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At first, this paper money was meant to circulate for a limited time (notes would expire after two, then three, then seven years), and was redeemable in bullion. Over time, especially as the Song came under increasing military pressure, the temptation to simply print money with little or no backup became overwhelming—and, moreover, Chinese governments were rarely completely willing to accept their own paper money for tax purposes. Combine this with the fact that the bills were worthless outside China, and it’s rather surprising that the system worked at all. Certainly, inflation was a constant problem and the money would have to be recalled and reissued. Occasionally the whole system would break down, but then people would resort to their own expedients: “privately issued tea checks, noodle checks, bamboo tallies, wine tallies, etc.”
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Still, the Mongols, who ruled China from 1271 to 1368 ad, chose to maintain the system, and it was only abandoned in the seventeenth century.

This is important to note because the conventional account tends to represent China’s experiment with paper money as a failure, even, for Metallists, proof that “fiat money,” backed only by state power, will always eventually collapse.
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This is especially odd, since the centuries when paper money was in use are usually considered the most economically dynamic in Chinese history. Surely, if the United States government was eventually forced to abandon the use of federal reserve notes in 2400 ad, no one would be arguing that this showed that the very idea was always intrinsically unworkable. Nonetheless, the main point I’d like to emphasize here is that terms like “fiat money,” however common, are deceptive. Almost all of the new forms of paper money that emerged were not originally created by governments at all; they were simply ways of recognizing and expanding the use of credit instruments that emerged from everyday economic transactions. If it was only China that developed paper money in the Middle Ages, this was largely because only in China was there a government large and powerful enough, but also, sufficiently suspicious of its mercantile classes, to feel it had to take charge of such operations.

For most of the Middle Ages, the economic nerve center of the world economy and the source of its most dramatic financial innovations was neither China nor India, but the West, which, from the perspective of the rest of the world, meant the world of Islam. During most of this period, Christendom, lodged in the declining empire of Byzantium and the obscure semi-barbarous principalities of Europe, was largely insignificant.

Since people who live in Western Europe have so long been in the habit of thinking of Islam as the very definition of “the East,” it’s easy to forget that, from the perspective of any other great tradition, the difference between Christianity and Islam is almost negligible. One need only pick up a book on, say, Medieval Islamic philosophy to discover disputes between the Baghdad Aristoteleans and the neo-Pythagoreans in Basra, or Persian Neo-Platonists—essentially, scholars doing the same work of trying to square the revealed religion tradition beginning with Abraham and Moses with the categories of Greek philosophy, and doing so in a larger context of mercantile capitalism, universalistic missionary religion, scientific rationalism, poetic celebrations of romantic love, and periodic waves of fascination with mystical wisdom from the East.

From a world-historical perspective, it seems much more sensible to see Judaism, Christianity, and Islam as three different manifestations of the same great Western intellectual tradition, which for most of human history has centered on Mesopotamia and the Levant, extending into Europe as far as Greece and into Africa as far as Egypt, and sometimes farther west across the Mediterranean or down the Nile. Economically, most of Europe was until perhaps the High Middle Ages
in exactly the same situation as most of Africa: plugged into the larger world economy, if at all, largely as an exporter of slaves, raw materials, and the occasional exotica (amber, elephant tusks …), and importer of manufactured goods (Chinese silks and porcelain, Indian calicoes, Arab steel). To get a sense of comparative economic development (even if the examples are somewhat scattered over time), consider the following table:
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