Debt (73 page)

4.
Samuelson 1948:49. See Heinsohn and Steiger 1989 for a critique of this position; also Ingham 2004.

5.
Pigou 1949. Boianovsky 1993 provides a history of the term.

6.
“We do not know of any economy in which systematic barter takes place without the presence of money” (Fayazmanesh 2006:87)—by which he means, in the sense of money of account.

7.
On the government role of fostering the “self-regulating market” in general, see Polanyi 1949. The standard economic orthodoxy, that if the government just gets out of the way, a market will naturally emerge, without any need to create appropriate legal, police, and political institutions first, was dramatically disproved when free-market ideologues tried to impose this model in the former Soviet Union in the 1990s.

8.
Innes as usual puts it nicely: “The eye has never seen, nor the hand touched a dollar. All that we can touch or see is a
promise to pay or satisfy a debt due for an amount called a dollar.” In the same way, he notes, “All our measures are the same. No one has ever seen on ounce or a foot or an hour. A foot is the distance between two fixed points, but neither the distance nor the points have a corporeal existence” (1914:155).

9.
Note that this does assume some means of calculating such values—that is, that money of account of some sort already exists. This might seem obvious, but remarkable numbers of anthropologists seem to have missed it.

10.
To give some sense of scale, even the relatively circumscribed commercial city-state of Hong Kong currently has roughly $23.3 billion in circulation. At roughly 7 million people, that’s more than three thousand Hong Kong dollars per inhabitant.

11.
“State theory may be traced to the early nineteenth century and to [Adam] Muller’s
New Theory of Money
, which attempted to explain money value as an expression of communal trust and national will, and culminated in [G.F.] Knapp’s
State Theory of Money
, first published in German in 1905. Knapp considered it absurd to attempt to understand money ‘without the idea of the state.’ Money is not a medium that emerges from exchange. It is rather a means for accounting for and settling debts, the most important of which are tax debts” (Ingham 2004:47.) Ingham’s book is an admirable statement of the Chartalist position, and much of my argument here can be found in much greater detail in it. However, as will later become apparent, I also part company with him in certain respects.

12.
In French: livres, sous, and deniers.

13.
Einaudi 1936. Cipolla (1967) calls it “ghost money.”

14.
On tallies: Jenkinson 1911, 1924; Innes 1913; Grandell 1977; Baxter 1989; Stone 2005.

15.
Snell (1919:240) notes that kings while touring their domains would sometimes seize cattle or other goods by right of “preemption” and then pay in tallies, but it was very difficult to get their representatives to later pay up: “Subjects were compelled to sell; and the worst of it was that the King’s purveyors were in the habit of paying not in cash down, but by means of an exchequer tally, or a beating … In practice it was found no easy matter to recover under this system, which lent itself to the worst exactions, and is the subject of numerous complaints in our early popular poetry.”

16.
It is also interesting to note, in this regard, that the Bank of England still kept their own internal accounts using tally sticks in Adam Smith’s time, and only abandoned the practice in 1826.

17.
See Engels (1978) for a classic study of this sort of problem.

18.
Appealing particularly to debtors, who were understandably drawn to the idea that debt is simply a social arrangement that was in no sense immutable but created by government policies that could just as easily be reshuffled—not to mention, who would benefit from inflationary policies.

19.
On the tax, Jacob 1987; for the Betsimisaraka village study, Althabe 1968; for analogous Malagasy case studies, Fremigacci 1976, Rainibe 1982, Schlemmer 1983, Feeley-Harnik 1991. For colonial tax policy in Africa more generally, Forstater 2005, 2006.

20.
So, for instance, Heinsohn & Steiger 1989:188–189.

21.
Silver was mined in the Midwest itself, and adopting bi-metallism, with both gold and silver as potential backing for currency, was seen as a move in the direction of free credit money, and to allow for the creation of money by local banks. The late nineteenth century saw the first creation of modern corporate capitalism in the United States and it was fervently resisted, with the centralization of the banking system being a major field of struggle, and mutualism—popular democratic (not profit oriented) banking and insurance arrangements—one of the
main forms of resistance. The bi-metallists were the more moderate successors of the Greenbackers, who called for a currency detached from money altogether, such as Lincoln briefly imposed in wartime (Dighe (2002) provides a good summary of the historical background.)

22.
They only became ruby slippers in the movie.

23.
Some have even suggested that Dorothy herself represents Teddy Roosevelt, since syllabically, “dor-o-thee” is the same as “thee-o-dor”, only backwards.

24.
See Littlefield 1963 and Rockoff 1990 for a detailed argument about
The Wizard of Oz
as “monetary allegory.” Baum never admitted that the book had a political subtext, but even those who doubt he put one in intentionally (e.g., Parker 1994; cf. Taylor 2005) admit that such a meaning was quickly attributed to it—there were already explicit political references in the stage version of 1902, only two years after the book’s original publication.

25.
Reagan could as easily be argued to be a practitioner of extreme military Keynesianism, using the Pentagon’s budget to create jobs and drive economic growth; anyway, monetary orthodoxy was abandoned very quickly even rhetorically among those actually managing the system.

26.
See Ingham 2000.

27.
Keynes 1930: 4–5

28.
The argument is referred to as the paradox of banking. To provide an extremely simplified version: say there was only one bank. Even if that bank were to make you a loan of a trillion dollars based on no assets of its own of any kind whatever, you would ultimately end up putting the money back into the bank again, which would mean that the bank would now have one trillion in debt, and one trillion in working assets, perfectly balancing each other out. If the bank was charging you more for the loan than it was giving you in interest (which banks always do), it would also make a profit. The same would be true if you spent the trillion—whoever ended up with the money would still have to put it into the bank again. Keynes pointed out the existence of multiple banks didn’t really change anything, provided bankers coordinated their efforts, which, in fact, they always do.

29.
I might note that this assumption echoes the logic of neoclassical economic theory, which assumes that all basic institutional arrangements that define the context of economic activity were agreed to by all parties at some imaginary point in the past, and that since then, everything has and will always continue to exist in equilibrium. Interestingly, Keynes explicitly rejected this assumption in his theory of money (Davidson 2006). Contemporary social contract theorists incidentally make a similar argument, that there’s no need to assume that this actually happened; it’s enough to say it could have and act as if it did.

30.
Aglietta is a Marxist, and one of the founders of the “Regulation School,” Orléans, an adherent of the “economics of convention” favored by Thevenot and Boltanski. Primordial debt theory has been mainly developed by a group of researchers surrounding economists Michel Aglietta and André Orléans, first in
La Violence de la Monnaie
(1992), which employed a psychoanalytic, Giradian framework, and then in a volume called
Sovereignty, Legitimacy and Money
(1995) and a collection called
Sovereign Money
(Aglietta, Andreau, etc. 1998), co-edited by eleven different scholars. The latter two volumes abandon the Girardian framework for a Dumontian one. In recent years the main exponent of this position has been another Regulationist, Bruno Théret (1992, 1995, 2007, 2008). Unfortunately almost none of this material has ever been translated into English, though a summary of many of Aglietta’s contributions can be found in Grahl (2000).

31.
For instance, Randall Wray (1990, 1998, 2000) and Stephanie Bell (1999, 2000) in the United States, or Geoffrey
Ingham (1996, 1999, 2004) in the United Kingdom. Michael Hudson and others in the ISCANEE group have taken up elements of the idea, but have never to my knowledge fully embraced it.

32.
*Rna. Malamoud (1983:22) notes that already in the earliest text it had both the meaning of “goods received in return for the promise to hand back either the goods themselves or something of at least equivalent value”, as well as “crime” or “fault.” So also Olivelle 1993:48, who notes *rna “can mean fault, crime, or guilt—often at the same time.” It is not however the same as the word for “duty.” For a typical example of early prayers for release from debt, see Atharva Veda Book 6 Hymns 117, 118, and 119.

33.
Satapatha Brahmana
3.6.2.16

34.
As Sylvain Lévi, Marcel Mauss’s mentor, remarked, if one takes the Brahmanic doctrine seriously, “the only authentic sacrifice would be suicide” (1898:133; so also A.B. Keith 1925:459). But of course no one actually took things that far.

35.
More precisely, it offered the sacrificer a way to break out of a world in which everything, including himself, was a creation of the gods, to fashion an immortal, divine body, ascend into heaven, and thus be “born into a world he made himself”
(Satapatha Brahmana
VI:2.2.27) where all debts could be repaid, buy back his abandoned mortal body from the gods (see, i.e., Lévi 1898:130–32, Malamoud 1983:31–32). This is certainly one of the most ambitious claims ever made for the efficacy of sacrifice, but some priests in China around that time were making similar claims (Puett 2002).

36.
Translated “saints” in the text with which I began the chapter, but since it refers to the authors of the sacred texts, the usage seems appropriate.

37.
I am fusing here two slightly different versions: one in
Tattiriya Sarphita
(6.3.10.5), which says that all Brahmans are born
with
a debt, but only lists gods, Fathers, and sages, leaving out the duty of hospitality, and the other in
Satapatha Brahmana
(1.7.2.1–6) that says all men are born
as
a debt, listing all four—but which seems really to be referring to males of twice-born castes. For a full discussion: see Malamoud 1983 and Olivelle 1993:46-55, also Malamoud 1998.

38.
Théret 1999:60–61

39.
“The ultimate discharge of this fundamental debt is sacrifice of the living to appease and express gratitude to the ancestors and deities of the cosmos” (Ingham 2004:90).

40.
op cit. He cites Hudson 2002:102–3, on the terms for “guilt” or “sin,” but as we’ll see the point goes back to Grierson (1977:22–23).

41.
Laum 1924. His argument about the origin of money in Greece in temple distributions is intriguing and has found contemporary exponents in Seaford (2004) and partly in Hudson (e.g., 2003) but is really a theory of the origin of coinage.

42.
More than I would ever dream of trying to cite. There are two standard survey works on “primitive money,” by Quiggin and by Einzig, both of which, curiously, came out in 1949. Both are outdated in their analysis but contain a great deal of useful material.

43.
English “pay” is from French
payer
, which in turn is derived from Latin
pacare
, “to pacify,” “to make peace with.”
Pacare
in turn is related to
pacere
, “to come to terms with an injured party” (Grierson 1977:21).

44.
Grierson 1977:20.

45.
In fact, as Grierson notes, the authors often seemed to be intentionally making fun of themselves, as in the Irish text that specifies that one can demand compensation for a bee-sting, but only if one first deducts the cost of the dead bee (Grierson 1977:26).

46.
We have plenty of myths and hymns from ancient Mesopotamia, too, for instance—but most were discovered in the ruins of ancient libraries that were also full of records of court trials, business contracts, and personal correspondence.
In the case of the oldest Sanskrit texts, religious literature is all we have. What’s more, since these were texts passed on verbatim from teacher to student for thousands of years, we can’t even say with any precision when and where they were written.

47.
Interest-bearing loans certainly existed in Mesopotamia, but they only appear in Egypt in Hellenistic times, and in the Germanic world even later. The text speaks of “the tribute that I owe to Yama,” which
could
refer to “interest,” but the comprehensive review of early Indian legal sources in Kane’s
History of Dharmasastra
(1973 III:411–461) comes to no clear conclusion on when interest first appeared; Kosambi (1994:148) estimates that it might have appeared in 500 bc but admits this is a guess.

48.
Mesopotamia, Egypt, and China come most immediately to mind. The notion that life is a loan from the gods does occur elsewhere: it seems to crop up spontaneously in ancient Greece, around the same time as money and interest-bearing loans do. “We are all owed as a debt to death,” wrote the poet Simonides, around 500 bc. “The sentiment that life was a loan to be repaid by death [became] an almost proverbial saying” (Millet 1991a:6). No Greek author to my knowledge connects this explicitly to sacrifice, though one could conceivably argue that Plato’s character Cephalus does so implicitly in one passage of the
Republic
(331d).

49.
Hubert and Mauss (1964) provide a good survey of the ancient literature in this regard.