Thursday, June 14, 2012

Debt: The First 5,000 Years by David Graeber

  • "Arguments about who really owes what to whom have played a central role in shaping our basic vocabulary of right and wrong." - 8
  • "it begins to be clear why there are no societies based on barter. Such a society could only be one in which everybody was an inch away from everybody else's throat; but nonetheless hovering there, poised to strike but never actually striking, forever." - 33
  • "there is good reason to believe that barter is not a particularly ancient phenomenon at all, but has only really become widespread in modern times. Certainly in most of the cases we know about, it takes place between people who are familiar with the use of money, but for one reason or another, don't have a lot of it around." - 37
  • "We did not begin with barter, discover money, and then eventually develop credit systems. It happened precisely the other way around. What we now call virtual money came first. Coins came much later, and their use spread only unevenly, never completely replacing credit systems. Barter, in turn, appears to be largely a kind of accidental byproduct of the use of coinage or paper money" - 40
  • Adam "Smith was trying to make a similar, Newtonian argument. God -- or Divine Providence, as he put it -- had arranged matters in such a way that our pursuit of self-interest would nonetheless, given an unfettered market, be guided 'as if by an invisible hand' to promote the general welfare. Smith's famous invisible hand was, as he says in his Theory of Moral Sentiments, the agent of Divine Providence. It was literally the hand of God." - 44
  • "whatever the state was willing to accept, for that reason, became currency." - 49
  • "Keynesian orthodoxy started from the assumption that capitalist markets would not really work unless capitalist governments were willing effectively to play nanny: most famously, by engaging in massive deficit 'pump-priming' during downturns." - 53
  • "Governments use taxes to create money, and they are able to do so because they have become the guardians of the debt that all citizens have to one another. This debt is the essence of society itself. It exists long before money and markets, and money and markets themselves are simply ways of chopping pieces of it up." - 56
  • "If taxes represent our absolute debt to the society that created us, then the first step toward creating real money comes when we start calculating much more specific debts to society, systems of fines, fees, and penalties, or even debts we owe to specific individuals who we have wronged in some way" - 59-60
  • "States created markets. Markets require states. Neither could continue without the other, at least, in anything like the forms we would recognize today." - 71
  • "Redemption was a release from one's burden of sin and guilt, and the end of history would be that moment when all slates are wiped clean and all debts finally lifted....If so, 'redemption' is no longer about buying something back. It's really more a matter of destroying the entire system of accounting." - 82
  • "One might even say that it's one of the scandals of capitalism that most capitalist firms, internally, operate communistically." - 96
  • "Exchange allows us to cancel out our debts. It gives us a way to call it even: hence, to end the relationship." - 104
  • "middle-class society has to be endlessly recreated, as a kind of constant flickering game of shadows, the criss-crossing of an infinity of momentary debt relations, each one almost instantly cancelled out." - 124
  • "historically, war, states, and markets all tend to feed off one another. Conquest leads to taxes. Taxes tend to be ways to create markets, which are convenient for soldiers and administrators." - 179
  • "Rather than institutionalize periodic amnesties, Greek cities tended to adopt legislation limiting or abolishing debt peonage altogether, and then, to forestall future crises, they would turn to a policy of expansion, shipping off the children of the poor to found military colonies overseas." - 187
  • "As much as it flies in the face of our stereotypes about the origins of 'Western' freedoms, women in democratic Athens, unlike those of Persia or Syria, were expected to wear veils when they ventured out in public." - 188
  • "Those who have argued that we are the natural owners of our rights and liberties have been mainly interested in asserting that we should be free to give them away, or even sell them." - 206
  • "Bullion predominates, above all, in periods of generalized violence...Gold and silver coins are distinguished from credit arrangements by one spectacular feature: they can be stolen." - 213
  • "By Medieval standards, India was unusual for resisting the appeal of the great Axial Age religions, but we observe the basic pattern: the decline of empire, armies, and cash economy, the rise of religious authorities, independent of the state, who win much of their popular legitimacy through their ability to regulate emerging credit systems. China might be said to represent the opposite extreme. This was the one place where a late Axial Age attempt to yoke empire and religion together was a complete success." - 258
  • "Over the course of the Middle Ages, the Indian Ocean effectively became a Muslim lake. Muslim traders appear to have played a key role in establishing the principle that kings and their armies should keep their quarrels on dry land; the seas were to be a zone of peaceful commerce." - 277
  • "Italian bankers ultimately managed to free themselves from the threat of expropriation by themselves taking over governments, and by doing so, acquiring their own court systems (capable of enforcing contracts) and even more critically, their own armies." - 291
  • "Aristotle had argued that gold and silver had no intrinsic value in themselves, and that money therefore was just a social convention, invented by human communities to facilitate exchange. Since it had 'come about by agreement, therefore it is within our power to change it or render it useless' if we all decide that that's what we want to do." - 298
  • "The legal idea of a corporation as a 'fictive person' (persona ficta)...was first established in canon law by Pope Innocent IV in 1250 AD, and one of the first kinds of entities it applied to were monasteries -- as also to universities, churches, municipalities, and guilds." - 304
  • "The moment when Vasco de Gama entered the Indian Ocean in 1498, the principle that the seas should be a zone of peaceful trade came to an immediate end. Portuguese flotillas began bombarding and sacking every port city they came across, then seizing control of strategic points and extorting protection money from unarmed Indian Ocean merchants for the right to carry on their business unmolested." - 311
  • "The story of the origins of capitalism, then, is not the story of the gradual destruction of traditional communities by the impersonal power of the market. It is, rather, the story of how an economy of credit was converted into an economy of interest" - 332
  • "Some appealed to alchemy to argue that the monetary status of gold and silver had a natural basis: gold (which partook of the sun) and silver (which partook of the moon) were the perfected, eternal forms of metal toward which all baser metals tend to evolve." - 336-7
  • "It soon became apparent that financial speculation, unmoored from any legal or community restraints, was capable of producing results that seemed to verge on insanity. The Dutch Republic, which pioneered the development of stock markets, had already experienced this in the tulip mania of 1637 -- the first of a series of speculative 'bubbles'" - 341
  • "Almost all the bubbles of the eighteenth century involved some fantastic scheme to use the proceeds of colonial ventures to pay for European wars. Paper money was debt money, and debt money was war money, and this has always remained the case." - 346
  • "there may be a deeper, more profound relation between gambling and apocalypse. Capitalism is a system that enshrines the gambler as the essential part of its operation, in a way that no other ever has; yet at the same time, capitalism seems to be uniquely incapable of conceiving of its own eternity." - 357

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