Global Policy Forum

What We Owe to Each Other

In Greece, Portugal, Italy and Spain  - to name but a few of the European countries in which harsh austerity measures are currently being implemented - public spending is being radically cut in order to repay debt. However, as public upheavals in Greece suggest, the sacrifices that need to be made to service debts are exorbitantly high. In this Boston Review interview, acclaimed author David Graeber challenges this fundamental tenant of our current socio economic system stating that the notion that debt ought to be repaid at all cost brings people to accept things they would never tolerate under other circumstances. It becomes acceptable, for instance, for thousands of babies to die of preventable diseases because their governments need to cut in their basic health services to pay back IMF loans. Graeber disputes repaying debt as a moral imperative that trumps all other concerns and asks to “put babies’ lives ahead of Citibank’s shareholders.”

David Graeber and David V. Johnson

February 15, 2012

David Graeber leads a busy double life. By day, he is an anthropologist at Goldsmiths, University of London. By night, he is an anarchist and activist, best known for being the “Anti-Leader of Occupy Wall Street,” as Bloomberg Businessweek dubbed him. In his latest book, Debt: The First 5,000 Years, Graeber marries his academic and activist selves by dissecting our moral confusion about debt, showing both how contingent our intuitions are in the light of anthropology and how our obtuseness has led to the mass suffering of austerity programs and financial crashes. In part one of his two-part interview, Web Editor David Johnson talks to Graeber about why we don’t put babies’ lives ahead of Citibank’s shareholders, what it means to be a conservative nowadays, and whether we should renew the tradition of debt jubilees.

David Johnson: What inspired you to write the book?

David Graeber: It came out of the strange moral power that debt has over people. So many times you’re talking to people about the depredations of the International Monetary Fund in the third world, telling these horrible stories about the thousands of babies dying of preventable diseases because people aren’t allowed to maintain malaria-eradication campaigns or basic health services due to austerity measures and debt servicing, and people respond, “Well, yeah, but you can’t say they don’t owe the money. People have got to pay their debts, come on!” That common-sensical notion not only that it’s moral to pay one’s debt, but also that morality essentially is a matter of paying one’s debts can bring people to justify things that they would never think to justify in any other circumstance. For the most part, decent people tend not to think killing lots of babies is justifiable under any circumstances. But debt somehow changes all that. Why is that?

DJ: You launch the book with an anecdote about debating an attorney who was an otherwise decent person but who insisted that countries indebted to the IMF must pay back their loans. The book is a sort of rejoinder to her and to people like her, but it’s a very long-winded answer, in that you appeal to 5,000 years of history and anthropology. Why doesn’t your immediate answer—“Look, the consequences of forcing these countries to pay their debt are babies dying of malaria and starvation”—suffice?

DG: Obviously my immediate answer wasn’t enough or she wouldn’t have said what she did. That’s why I felt I had to write the book: because you’d think it would be self-evident that killing thousands of babies—so that Citibank avoids losing one percent of its interest on a loan which is the tiniest percentage of its portfolio and will not actually affect the lives of their shareholders in any way—is wrong. You would think that would be morally self-evident, but it’s not.

DJ: In some ways the argument of the book reminded me of the philosopher Bernard Williams.

DG: How so?

DJ: He thought that morality was a “peculiar institution” in that it places so much weight on the notion of obligation over all our other values, and things we care about and find important—the thought that we ought morally to do something is supposed to trump everything else we value. In a similar way the book examines how debt—the notion that you ought to pay your debt, you ought to pay what you owe—has this peculiar grip on us that trumps or silences other concerns.

DG: And has a tendency to do so, yeah!

DJ: In thinking about the relationship between the moral “ought”—“You ought to fulfill your promise,” for example—and this notion of debt—“You ought to pay your debt”—I’m wondering whether they speak in the same voice.

DG: However you want to take that, it comes out the same way, except supercharged. In the same way that the “ought” trumps all other values, debt trumps all other “oughts.” And I argue in the book that one reason why medieval theologians, whether Christian or Muslim, seemed so inherently suspicious about usury is because it creates a moral imperative that tends to trump all others. They recognized a potentially dangerous rival when they saw one, a moral system that would completely overwhelm their own if it was allowed full rein.

One reason I thought all the history helpful is because there are these simplistic moral arguments and the second line of defense for the people who are defending the existing system is to say, “All right, fine, it’s not just. We’re not saying the existing financialized version of capitalism is a good system. But it foments technological change in such a way that, even though it creates vast inequalities, the poor are still better off than they would be under another system.”

DJ: Steven Pinker just came out with his book, with a similarly optimistic picture of liberal capitalism.

DG: And that’s very unusual, actually, that Pinker is still trying to come up with these lines, because most defenders of capitalism are not doing the Pinker approach—“Yes, it’s actually better.” They realize that they can’t. They’re just saying “All right, it’s not the best system in the world, but no other system is possible anyway.”

The instinct of the people now in power is to figure out how to change things as little as possible.

What we’ve seen over the last 30 years is a war on the human imagination. That’s the other starting point for this book—that in 2008 we had this crash, and all these assumptions we’ve been told we’ve had to accept for 30 years came crashing to the ground along with the market. One of them is the assumption that markets are actually self-sustaining. Obviously not true. Another one was that the people running them are competent. For years we were told that they aren’t very nice people—they’re greedy bastards, actually—but they know what they’re doing. All other systems just don’t work. These guys are incredibly bright, they’re incredibly competent. No, it turns out actually that they don’t even understand the working of their own financial instruments, or as far as they do, they’re engaged in scams. They trashed the entire system.

Assumption number three is that all debts ought to be repaid. Actually, no, debts don’t really need to be repaid, because AIG, who owes money, can wave a variety of different magic wands and debts can be made to disappear. Once you understand that the narrative we’ve been handed has been false, you’d think this would be the moment when you start thinking about larger questions: Why do we have an economy? What is debt? What is money? How could these things be organized differently? What do we need to keep and what do we change? You would think this would be the moment for international discussion about the basic assumptions that we’ve been making, and it seemed for about two weeks that it was going to happen.

DJ: You’re talking about 2008?

DG: Yes. The Economist put out this headline saying: “Capitalism—Was it a Good Idea?” And obviously their conclusion was yes, because they’re The Economist, but nonetheless the question had to be asked.

DJ: The Financial Times recently ran a series of articles similar to The Economist’s. Has the conversation you thought we should have had really ended?

DG: It was cut off. That was one reason I wrote this book: we were supposed to have this conversation, people started to, and then there was this general panic among people running things saying “No, no, no, stop that. Just carry on. Just clap your hands over your ears. Nothing to see here, keep moving along.

DJ: “Keep calm and carry on.”

DG: “Keep calm and carry on.” That only worked for so long, and we finally reached the point where that’s obviously not viable anymore. Enough people have said, “No, we have to start talking about this.” Perhaps that’s one reason why the book has been received as well as it has: people are finally exasperated at ignoring the problem.

And in a larger sense, there’s been this attack on the human imagination. There’s been this sense that you can’t talk about the big questions, it’s all settled. And when we found out it wasn’t, there’s this sort of paralysis that strikes.

I keep thinking about the extraordinary conservatism of the people running the world economy, running the governments of the largest nations of the world. Let’s compare it to ages past: let’s think about the people who fought World War II, let’s think about the ’50s, the giant structures like the United Nations, Bretton Woods, the space program— those people were capable of thinking big. We don’t do that anymore. The instinct of the people now in power is to figure out how to change things as little as possible. The world political culture has turned into this knee-jerk defensive conservatism of trying desperately to maintain things exactly as they are, for as long a period as possible.

DJ: It seems to me that it’s even worse than that, in the sense that the current postwar order is violating its own hard-won principles. You get liberal economists like Paul Krugman asking “How is it possible that we can be implementing austerity in a time like this?”

DG: Yeah. They all knew austerity was a bad idea economically, but they tried to do something that might be good economically and discovered that they weren’t even allowed to do it; so they thought, “Well, we have to do something. We’ll do this other plan even though it’s bad.” It’s very odd.

The current political regime in Washington is a great example of the fundamental conservatism of global leaders. I think that’s one of the explanations for why you have young people finally showing up in the streets. We had this guy who ran as a candidate of change. He didn’t run as a radical, but he had all the social-movement rhetoric that made you think that actually he was going to do things differently. His candidacy mobilized grass roots supporters as if this were a social movement. It was all very self-conscious, and all these young people became politicized and thought this was going to actually mean some kind of profound change.

And what do we get? We get this guy who is basically a classic conservative. The word conservative has changed in contemporary American English; now it means “extreme radical reactionary” or “right-winger.” But in the old-fashioned sense of wishing to conserve existing institutions in as much a viable long-term form, that’s what Obama turned out to be. Pretty much everything he’s done is along the lines of “How can we save the auto industry? How can we preserve the banking system without nationalizing it, without changing it in any fundamental way?” He did not map out a great new vision of a health system. He said the system we have is not viable, but here’s a plan where we can preserve the same principles of profit-driven private health in a form that will be sustainable. So basically this is a guy who is willing to make heroic efforts not to change.

And yet it’s at a moment when you have Democrats seizing both houses of Congress, a charismatic President taking leadership over the financial crisis where it’s almost impossible not to change anything, and a popular rage against existing financial elites willing to accept emergency measures . . . If at a moment like that you can’t get any sort of progressive change through electoral means, it’s not going to happen.

DJ: Regarding your mention of the “war on the imagination,” the book offers numerous anthropological cases of different societies and how they used money, and you use many more examples than you need to make your argument. What the book does as a reading exercise is enliven one’s imagination to the multitude of possibilities there are in how we can think about debt.

DG: That’s precisely what I was trying to do. One reason to spread the canvas so broadly—the same thing that drew me to anthropology—is that you fight the idea that all these questions are settled, that there’s really only one way to run the economy, the political system, society. What you see when you look at history, if you look anthropologically across the world, even at any one time, is a dazzling infinite variety of social possibilities. Which you would never have dreamed possible until you see them. It makes it much more difficult to make the argument that nothing except what we’ve got is possible.

Capitalism is just a bad way of organizing communism.

DJ: How do we get beyond our ways of thinking about debt, given how entrenched they are? We don’t live in an African tribal society or in the Roman Empire.

DG: There are two levels of that. One of the things that I was trying really hard to do was to demonstrate that, for all that variety, you’re not talking about fundamentally different principles. It’s not like other peoples live in an entirely untranslatable, unintelligible universe. The fact that we can do anthropology means they’re building the things out of the same materials that we are; they’re just putting the pieces together in different ways. And once you understand that and look back at your own society, you just see it with new eyes. And that’s again what I was trying to do, to start by talking about radically different sorts of economic systems and ways that people interact with one another.

So I think one of the questions I’m asking in the book is not just about the power of debt but also why we come to see debt—exchange whereby complete transactions are debts—as being the essence of all social relations, because the very logic of exchange is just one of many ways that we ourselves think of the morality of distribution and transfer of material goods. There are always different registers and different moralities that we bring to bear, but the basic principles really are the same everywhere you go. So the moment you realize that everything we’re doing is not an exchange, suddenly you realize that forms of feudal hierarchy actually exist right here, but forms of communism also exist right here. Almost any social possibility already exists and is part of the daily fabric of our existence. We’re just taught not to notice it or think it’s particularly important.

DJ: That argument reminded me of philosopher Jerry [G.A.] Cohen, who uses the notion of a camping trip to examine the sort of norms we take for granted in everyday relations. They’re communist norms.

DG: Yeah! Most interactions with people that you trust, people that you love, or people that just need to cooperate with on an immediate basis, take the form of “From each according to their abilities, to each according to their needs.” It doesn’t matter if you’re working for the government, working for a corporation, or working in your family; if you need to fix the toilet because it’s leaking and you say “Hand me the wrench,” the other guy doesn’t say “What do I get for that?” It’s not an exchange; people act according to their abilities to chip in. Ironically communism is applied because it’s the only thing that works; it’s the most efficient way to allocate resources. Thus I like to say that you could argue that capitalism is just a bad way of organizing communism. [laughter]

DJ: At the end of the book, you suggest one policy proposal of a sort, namely a jubilee, or a cancellation of all debts.

DG: Well, it’s not really a policy proposal—I don’t believe in policy. I’m an anarchist, right? Policy means other people making decisions for you.

DJ: Right. Have you thought about how a jubilee would work right now, in terms of all the underwater mortgages in this country or on the sovereign debt crisis in Europe?

DG: I haven’t worked it out; I’m not an economist. But there are people who have. Boston Consulting Group, I believe, ran a model recently and came to the conclusion that, while having a debt jubilee would cause great economic disruption, not having one would create even more. The situation we have basically isn’t viable. Some kind of radical solution is going to be required at some point; the question is what form it’s going to take.

This time around, they might consider doing it in a form that actually helps ordinary people. It would have been perfectly feasible to take the trillions of dollars that they essentially printed to bail out the banks and give it to mortgage holders, because what the banks had were mortgage-based securities that were no good anymore. If they just paid the mortgages using the same money, that in effect would have bailed out the banks.

DJ: That wouldn’t have been a debt cancellation.

DG: Well, I’m just giving an example. It would have had the same effect as a debt cancellation, because they would have printed money to pay the debts. The irony is that they chose instead to give the money directly to the banks and not bail out the mortgage-holders. Which is a pattern that you see over and over again in world history—one of the more dramatic consistencies I’ve noticed in the history of debt: debts between equals are not the same as debts between people who are not equals.

Debts between either poor people or rich people, that they have with each other, can be renegotiated or forgiven. People can be extraordinarily generous, understanding, forgiving when dealing with others like themselves. But debts between social classes, between the rich and the poor, suddenly become a matter of absolute morality. And that’s what we saw; it’s a very, very old pattern.

In the second part of our interview with David Graeber about his latest book, Debt: The First 5,000 Years, he explains how student loan debt is perverting the value of education, how those who break windows aren’t necessarily the true barbarians, and how academics are a lot like hunchbacked dwarves.

David Johnson: How do you see this book in relationship to your activism?

David Graeber: The book really traces back to earlier activism, when I was involved in the global justice movement. I guess the global justice movement never ended; it just sputtered along for a while and then came back as Occupy Wall Street. For the last twelve years or so I’ve been engaged in a continual quest to reimagine what the relationship between an intellectual and a social movement would actually be.

Once there was a time when we thought we knew what that relationship was: come up with a sort of correct analysis of the world situation—a vanguardist model—to bring people to an appropriate level of consciousness. And we got so far as to figure out that that’s deeply flawed. Once we had these new social movements based on radical heterogeneity, you weren’t really trying to convert people to your point of view so much as coming together around projects and common action. What is the role of the intellectual in that? I’m playing around with different ideas of what that might be.

During the initial stages of organizing Occupy Wall Street over the summer, I actually tried really hard to keep my writing and activism apart. I was spending that summer doing book promotion. Now obviously you don’t want to use a social movement as an excuse to sell a book, nor do you want to impose your vision that you’ve written about on a social movement. It’s got to come from below. But it was hard because I found any time I was giving a talk about the book and there were any number of young people in the audience, at least one or two of them would come up to me at the end and ask: “Do you think there’s any possibility of starting a movement around student loan debt?” It was a theme that cropped up over and over again: indignation and outrage people had over their situation and the idea that there must be something we can politically do about this.

We didn’t really know who was going to show up for the occupation. It was all a great mystery. We had to throw it together very quickly; it was thrown into our laps the last seven weeks before the event itself. Overwhelmingly the people who showed up were young ones who felt, “We played by the rules, we went to school, we studied hard, we did everything we’re supposed to do, and now not only are we $50,000 in debt with no way out, there’s no jobs because the bankers crashed the economy—they didn’t play by the rules but they got bailed out. Now we’re stuck being told we’re deadbeats for the rest of our lives, owing money to the very people who destroyed everything.”

Here the level of debt young people are saddled with is unparalleled and it’s a debt that you can’t get out of, no matter what you do. Because of the peculiar nature of student loan debt, it makes it impossible to ignore the connection between the financial structure and the government, because the government essentially becomes the enforcer of these absurd incorrigible debts. And what do the banks do? They take the money that they extract from you and give it to politicians effectively as bribe money, and thus are allowed to write the legislation to use the power of the government to extract even more money from you.

DJ: At one point in time, the system seemed to work. Assuming a normal economy in which people are able to get decent jobs after college, the debt that they’ve taken on they would be able to pay back and at reasonable interest rates.

DG: It used to be they excused student loans.For example, if you went into education, even if you became a professor, let alone a teacher, they would just waive it. You could say that at one point the system was viable. But I don’t think that the idea of a privatized education system paid for by loans is in any way a reasonable way to run a public education system in a country. Education should be free. Most civilized countries have come to that conclusion.

DJ: You used to teach at Yale.

DG: Yes, that’s true.

DJ: And now you’re at Goldsmiths in London. Are there minimal fees at the University of London?

DG: They’re trying to bring the American system there. It was the cause of a widespread revolt across the system over the course of last year. In 2010–2011, there were more than 25 different university occupations in the United Kingdom. After the financial crash, one of the first things that the Tory government did was make a concerted attack on the entire higher education system that took the form of radically raised tuitions and an American-style student loans system. It all started with the Brown report, put out by the Labour government actually. Tuition in the U.K. had been free until quite recently, but the Labour government introduced a maximum £3,000 tuition ceiling some years ago.

‘They broke some glass, and they’re going to be represented as vandals, but who are the real barbarians here?’

What Labour did was analyze the educational system in an extraordinarily economistic fashion. They took as their starting premise that no one would ever seek higher education except to further their overall life income and wrote a series of suggested reforms in that light. Of course then the Tories come in and say “Okay, we’re going to triple tuition and institute a student loan system,” which of course is going to force students to actually think that way. Now you have no choice but to think about your education only in terms of how much money it’s going to net—that’s what basically the system of student loans actually does.

DJ: It’s all about value, really.

DG: It’s very interesting because much of the outrage on the part of students was directed toward that idea that education is essentially an economic good and should only be thought of that way. In fact, in just about every occupation that I know of, the very first statement they made—it wasn’t even a demand but a statement of principle—was that education is not an economic good and is a value unto itself and should be recognized as such. The interesting thing is that that logic is considered radical. That used to be the conservative position.

During the first big demonstrations against the tuition raise, students actually surrounded Tory headquarters, smashed in all the windows, and occupied it. There was a great outcry in the press, predictably. I was interviewed by a reporter for the Daily Telegraph, the Tory paper, and I said, “Yeah, they broke some glass, and they’re going to be represented as vandals, as barbarians, but if you really think about it, who are the barbarians here? These students might’ve broken something but they did it in the name of the principle that there are things that have a value beyond money.” When we think about the Goths and the Vandals and the Visigoths (the Romans broke a lot of stuff too), the reason why they were considered barbarians isn’t because they broke stuff; it’s because they had no appreciation for the art, culture, and philosophy of the civilization they were overrunning. They were only interested in money and power.

DJ: Another aspect of all this is that the only ones who have the chance to value education for its own sake are people who come from wealthy families.

DG: Exactly. So the conservative position really is: of course poetry and philosophy are values unto themselves, and they need to be kept for those people who can genuinely appreciate them. These people just happen to be those who already have all the money or know how to get it.

DJ: How has your book been received by anthropologists, your peers in the academic community?

DG: I wrote a book whereby I presented what I considered to be some quite sophisticated arguments in very accessible form. And it’s funny: I’ve never had people up and directly say to me, “But that’s written in plain English. What are you doing?” People feel that they have to admire that.

However, the way that people object to this is more in the sense, “You’re making these sweeping, trans-historical arguments. Who the hell do you think you are? We can’t write books like that anymore.” It’s not quite phrased that way, but there are these codes of who can do what in academia.

I’ve got this before. At one point I wrote something for New Left Review, a theory piece that they actually commissioned from me. It’s very ironic because they then rejected it before allowing me to respond to the criticisms, but the major criticism was—they couldn’t quite say it, they came very close—“You’re Anglophone. You’re writing in English. People who write in French, German, and Italian can propose theories; people who write in English can comment on those theories. You can’t just make up a theory of alienation. That’s absurd.” So there are these codes like that.

Another one is: “You can’t write a grand, sweeping, historical, theoretical work anymore. Especially not if you’re English, maybe you can do it if you’re French.” But even that aspect of it tends to be ignored.

So there’s a sense that in the late nineteenth century or late twentieth century we could do those “The Decline of the West” papers, histories of religions, and that kind of worked. But nowadays we don’t do that anymore.

So I think insofar as I violated intellectual taboos, it wasn’t so much in how I presented it in a way accessible to the public, but it’s that very idea that we can’t ask the big questions anymore.

DJ: Do you think that’s part of the market economy speaking, in the sense that you’re a professor who’s supposed to perform a certain function and only comment on well-circumscribed topics?

DG: I think that’s exactly right. I think what’s really going on when they attack the education system. Why is it that the first thing they do after the Great Crash is to go directly against higher education and try to create a system whereby education only exists to reproduce economic value? Traditionally universities are the one space where you’re supposed to think about other forms of value, where you’re supposed to experiment in other ways of existing; of thinking; of art, philosophy; pursue truth, understanding, and even other than money. It’s concentrated into one place. And also to think about other ways of organizing things and other possibilities. So once these guys have completely delegitimated themselves, what else is there to do but to go directly against this sort of institution which traditionally would provide alternative ways of thinking about value, alternative ways of thinking about history and society? So, in a way, I’m trying to do here what institutions like universities are traditionally there to do but have been increasingly discouraged to attempt.

DJ: I was once a professor. The reason I left academia for journalism is that I felt it was too constraining.

DG: Really?

DJ: In my most cynical days as an academic, I thought of a professorship as the carrot that the establishment offers to make sure that smart people don’t run amok. “Give them a nice little office and a job that’s very stable, and put them in the ivory tower, and they won’t cause any trouble.”

DG: Did you ever read C.B. Macpherson’s theory of the university? It’s similar to that, and it’s actually quite clever. He makes the argument that universities have traditionally fulfilled a kind of court jester role. What is the problem you have if you’re the guy in charge, if you’re a king? It’s that you’re surrounded by yes-men. So there’s nobody there who’s going to tell you if you have a really bad idea. They’ll agree with anything you say. So you need someone who will actually point out when you’re going off the tracks. You’ll also need to make sure that person isn’t taken seriously. So you get a hunchbacked dwarf to tell you a silly rhyme, telling you why your plan is idiotic. And you get to know that your plan is idiotic and think about it, and everybody else says, “OK, hunchbacked dwarf, you talk to the king, that’s fine.” Universities are pretty much the same thing. They’re there to come up with all the reasons why current policies are misguided, why, you know, the current economic systems might not be ideal. They come up with all the alternate perspectives, but they frame it in a way that nobody takes it particularly seriously or can even understand it.

DJ: It seems that there are a lot of academics who are politically active in this time. How would you assess academia’s role in the current social situation?

DG: I think that it’s hard not to become politically active, when your own institution is under all-out assault. What happened after the ’60s when campuses became this huge focus of social unrest is that it became almost accepted that if you’re in certain disciplines you are a radical. For a long time people found themselves in this position of taking on these radical modes of argument even as the social movements on campuses started to disappear. So before long being a radical intellectual meant creating these position papers for vast social movements that did not in fact exist. And I think we’ve come to a point where that’s become increasingly difficult to maintain. People either have to throw in their lot with this sort of overarching bureaucratic, administrative, financial system or they have to think about some concrete, practical way of opposing it. It’s really hard to break old habits, but I find people are starting to do so. 


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