Debt (60 page)

The reason that this upends our assumptions is that we’re used to blaming the rise of capitalism on something vaguely called “the market”—the breakup of older systems of mutual aid and solidarity, and the creation of a world of cold calculation, where everything had its price. Really, English villagers appear to have seen no contradiction between the two. On the one hand, they believed strongly in the collective stewardship of fields, streams, and forests, and the need to help neighbors in difficulty. On the other hand, markets were seen as a kind of attenuated version of the same principle, since they were entirely
founded on trust. Much like the Tiv women with their gifts of yams and okra, neighbors assumed they ought to be constantly slightly in debt to one another. At the same time, most seem to have been quite comfortable with the idea of buying and selling, or even with market fluctuations, provided it didn’t get to the point of threatening honest families’ livelihoods.
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Even when loans at interest began to be legalized in 1545, that did not ruffle too many feathers, as long as it took place within that same larger moral framework: lending was considered an appropriate vocation, for example, for widows with no other source of income, or as a way for neighbors to share in the profits from some minor commercial venture. William Stout, a Quaker merchant from Lancashire, spoke glowingly of Henry Coward, the tradesman in whose shop he first apprenticed:

In this world, trust was everything. Most money literally was trust, since most credit arrangements were handshake deals. When people used the word “credit,” they referred above all to a reputation for honesty and integrity; and a man or woman’s honor, virtue, and respectability, but also, reputation for generosity, decency, and good-natured sociability, were at least as important considerations when deciding whether to make a loan as were assessments of net income.
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As a result, financial terms became indistinguishable from moral ones. One could speak of others as “worthies,” as “a woman of high estimation” or “a man of no account,” and equally of “giving credit” to someone’s words when one believes what they say (“credit” is from the same root as “creed” or “credibility”), or of “extending credit” to them, when one takes them at their word that they will pay one back.

One should not idealize the situation. This was a highly patriarchal world: a man’s wife or daughter’s reputation for chastity was as much a part of his “credit” as his own reputation for kindness or piety. What’s more, almost all people below the age of 30, male or female, were employed as servants in someone else’s household—as farmhands, milkmaids, apprentices—and as such, were of “no account” at all.
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Finally, those who lost credibility in the eyes of the community became, effectively, pariahs, and descended into the criminal or semi-criminal
classes of rootless laborers, beggars, harlots, cutpurses, hawkers, pedlars, fortune-tellers, minstrels, and other such “masterless men” or “women of ill repute.”
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Cold cash was employed largely between strangers, or when paying rents, tithes, and taxes to landlords, bailiffs, priests, and other superiors. The landed gentry and wealthy merchants, who eschewed handshake deals, would often use cash with one another, especially to pay off bills of exchange drawn on London markets.
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Above all, gold and silver were used by the government to purchase arms and pay soldiers, and amongst the criminal classes themselves. This meant that coins were most likely to be used both by the sort of people who ran the legal system—the magistrates, constables, and justices of the peace—and by those violent elements of society they saw it as their business to control.

Over time, this led to an increasing disjuncture of moral universes. For most, who tried to avoid entanglement in the legal system just as much as they tried to avoid the affairs of soldiers and criminals, debt remained the very fabric of sociability. But those who spent their working lives within the halls of government and great commercial houses gradually began to develop a very different perspective, whereby cash exchange was normal and it was debt that came to be seen as tinged with criminality.

Each perspective turned on a certain tacit theory of the nature of society. For most English villagers, the real font and focus of social and moral life was not so much the church as the local ale-house—and community was embodied above all in the conviviality of popular festivals like Christmas or May Day, with everything that such celebrations entailed: the sharing of pleasures, the communion of the senses, all the physical embodiment of what was called “good neighborhood.” Society was rooted above in the “love and amity” of friends and kin, and it found expression in all those forms of everyday communism (helping neighbors with chores, providing milk or cheese for old widows) that were seen to flow from it. Markets were not seen as contradicting this ethos of mutual aid. It was, much as it was for Tusi, an extension of mutual aid—and for much the same reason: because it operated entirely through trust and credit.
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England might not have produced a great theorist like Tusi, but one can find the same assumptions echoed in most of the Scholastic writers, as for instance in Jean Bodin’s
De Republica
, widely circulated
in English translation after 1605. “Amity and friendship,” Bodin wrote, “are the foundation of all human and civil society”—they constitute that “true, natural justice” on which the whole legal structure of contracts, courts, and even government must necessarily be built.
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Similarly, when economic thinkers reflected on the origins of the money, they spoke of “trusting, exchanging, and trading.”
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It was simply assumed that human relations came first.

As a result, all moral relations came to be conceived as debts. “Forgive us our debts”—this was the period, the very end of the Middle Ages, that this translation of the Lord’s Prayer gained such universal popularity. Sins are debts to God: unavoidable, but perhaps manageable, since at the end of time our moral debts and credits will be all canceled out against each other in God’s final Reckoning. The notion of debt inserted itself into even the most intimate of human relations. Like the Tiv, Medieval villagers would sometimes refer to “flesh debts,” but the notion was completely different: it referred to the right of either partner in a marriage to demand sex from the other, which in principle either could do whenever he or she desired. The phrase “paying one’s debts” thus developed connotations, much as the Roman phrase “doing one’s duty” had, centuries before. Geoffrey Chaucer even makes a pun out of “tally” (French:
taille
) and “tail” in the Shipman’s Tale, a story about a woman who pays her husband’s debts with sexual favors: “and if so I be faille, I am youre wyf, score it upon my taille.”
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Even London merchants would occasionally appeal to the language of sociability, insisting that in the final analysis, all trade is built on credit, and credit is really just an extension of mutual aid. In 1696, for instance, Charles Davenant wrote that even if there were a general collapse of confidence in the credit system, it could not last long, because eventually, when people reflected on the matter and realized that credit is simply an extension of human society,

Davenant was an unusual merchant (his father was a poet). More typical of his class were men like Thomas Hobbes, whose
Leviathan
, published in 1651, was in many ways an extended attack on the very idea that society is built on any sort of prior ties of communal solidarity.

Hobbes might be considered the opening salvo of the new moral perspective, and it was a devastating one. When
Leviathan
came out, it’s not clear what scandalized its readers more: its relentless materialism (Hobbes insisted that humans were basically machines whose actions could be understood by one single principle: that they tended to move toward the prospect of pleasure and away from the prospect of pain), or its resultant cynicism (if love, amity, and trust are such powerful forces, Hobbes asked, why is it that even within our families, we lock our most valuable possessions in strongboxes?) Still, Hobbes’ ultimate argument—that humans, being driven by self-interest, cannot be trusted to treat each other justly of their own accord, and therefore that society only emerges when they come to realize that it is to their long-term advantage to give up a portion of their liberties and accept the absolute power of the King—differed little from arguments that theologians like Martin Luther had been making a century earlier. Hobbes simply substituted scientific language for biblical references.
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I want to draw particular attention to the underlying notion of “self-interest.”
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It is in a real sense the key to the new philosophy. The term first appears in English right around Hobbes’ time, and it is, indeed, directly borrowed from
interesse
, the Roman law term for interest payments. When it was first introduced, most English authors seemed to view the idea that all human life can be explained as the pursuit of self-interest as a cynical, foreign, Machiavellian idea, one that sat uncomfortably with traditional English mores. By the eighteenth century, most in educated society accepted it as simple common sense.

But why “interest”? Why make a general theory of human motivation out of a word that originally meant “penalty for late payment on a loan”?

Part of the term’s appeal was that it derived from bookkeeping. It was mathematical. This made it seem objective, even scientific. Saying we are all really pursuing our own self-interest provides a way to cut past the welter of passions and emotions that seem to govern our daily existence, and to motivate most of what we actually observe people to do (not only out of love and amity, but also envy, spite, devotion, pity, lust, embarrassment, torpor, indignation, and pride) and discover that, despite all this, most really important decisions are based on the rational calculation of material advantage—which means that they are
fairly predictable as well. “Just as the physical world is ruled by the laws of movement,” wrote Helvétius, in a passage reminiscent of Lord Shang, “no less is the moral universe ruled by laws of interest.”
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And of course it was on this assumption that all the quadratic equations of economic theory could ultimately be built.
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The problem is that the origin of the concept is not rational at all. Its roots are theological, and the theological assumptions underpinning it never really went away. “Self-interest” is first attested to in the writings of the Italian historian Francesco Guicciadini (who was, in fact, a friend of Machiavelli), around 1510, as a euphemism for St. Augustine’s concept of “self-love.” For Augustine, the “love of God” leads us to benevolence toward our fellows; self-love, in contrast, refers to the fact that, since the Fall of Man, we are cursed by endless, insatiable desires for self-gratification—so much so that, if left to our own devices, we will necessarily fall into universal competition, even war. Substituting “interest” for “love” must have seemed an obvious move, since the assumption that love is the primary emotion was precisely what authors like Guicciadini were trying to get away from. But it kept that same assumption of insatiable desires under the guise of impersonal math, since what is “interest” but the demand that money
never cease
to grow? The same was true when it became the term for investments—“I have a twelve-percent interest in that venture”—it is money placed in the continual pursuit of profit.
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The very idea that human beings are motivated primarily by “self-interest,” then, was rooted in the profoundly Christian assumption that we are all incorrigible sinners; left to our own devices, we will not simply pursue a certain level of comfort and happiness and then stop to enjoy it; we will never cash in the chips, like Sindbad, let alone question why we need to buy chips to begin with. And as Augustine already anticipated, infinite desires in a finite world means endless competition, which in turn is why, as Hobbes insisted, our only hope of social peace lies in contractual arrangements and strict enforcement by the apparatus of the state.