Debt: The First 5,000 Years

by David Graeber

The Bronze Age civilization of the Indus Valley collapsed sometime around 1600 BC; it would be about a thousand years before India saw the emergence of another urban civilization.

Both kingdoms and republics produced their own silver and copper coinage, but in some ways the republics were more traditional, since the self-governing “populace in arms” consisted of the traditional Ksatriya or warrior caste, who typically held their lands in common and had them worked by serfs or slaves.

Whatever their origins, here too, coins and markets sprung up above all to feed the machinery of war.

The government drew its personnel first of all from a landed class, which provided trained administrators, but even more, full-time soldiers: the salaries of each rank of soldier and administrator were carefully stipulated. These armies could be huge. Greek sources report that Magadha could put to the field a force of 200,000 infantry, 20,000 horses, and about 4,000 elephants—and that Alexander’s men mutinied rather than have to face them.

By Kautilya’s time, a few hundred years later, the state was inserting itself into every aspect of the process: Kautilya suggests paying soldiers apparently generous wages, then secretly replacing hawkers with government agents who could charge them twice the normal rates for supplies.

Thus was the market economy, born of war, gradually taken over by government. Rather than stifle the spread of currency, the process seems to have doubled and even tripled it: the military logic was extended to the entire economy, the government systematically setting up its granaries, workshops, trading houses, warehouses, and jails, staffed by salaried officials, and all selling products on the market so as to collect the pieces of silver paid off to soldiers and officials and put them back into the royal treasuries again.

By Kautilya’s time, most war captives were not sold in marketplaces but relocated to government villages on newly reclaimed land. They were not allowed to leave. These government villages were, at least according to the regulations, remarkably dreary places: veritable work camps, with all forms of festive entertainment officially prohibited. Slave hirelings were mostly convicts, rented by the state during their terms.

By the time of emperor Aśoka (273–232 BC), the Mauryan dynasty controlled almost all of present-day India and Pakistan, but the Indian version of the military-coinage-slavery complex was showing definite signs of strain. Perhaps the clearest sign was the debasement of the coinage, which over the course of two centuries or so had gone from almost pure silver to about fifty percent copper.39

Aśoka’s reforms are useful to contemplate here because they help reveal just how mistaken some of our basic assumptions are: particularly, that money equals coins, and that more coins in circulation means more commerce and a greater role for private merchants.

Merchants had been among the earliest and most ardent supporters of the new religions (Jains, owing to their rigorous enforcement of rules against harm to any living creature, were obliged to become, effectively, a mercantile caste).

however suspicious of precious metals, Buddhism had always had a liberal attitude toward credit arrangements.

It makes perfect sense for a religious movement that rejected violence and militarism, but that was in no way opposed to commerce.44 As we shall see, while Aśoka’s own empire was not long to endure, soon to be replaced by a succession of ever weaker and mostly smaller states, Buddhism took root.

China never minted gold or silver coins. Merchants used precious metals in the form of bullion, but the coins in actual circulation were basically small change: cast bronze disks, usually with a hole in the middle so that they could be strung together.

There was also a notable difference in that the new religious and philosophical movements in China were from their very beginnings also social movements.

Some of these movements didn’t even have leaders, like the School of the Tillers, an anarchist movement of peasant intellectuals who set out to create egalitarian communities in the cracks and fissures between states.50 The Mohists, egalitarian rationalists whose social base seems to have been urban artisans, not only were philosophically opposed to war and militarism, but organized battalions of military engineers who would actively discourage conflicts by volunteering to fight in any war against the side of the aggressor.

Modern labels are iffy.

The Axial Age was the first time in human history when familiarity with the written word was no longer limited to priests, administrators, and merchants, but had become necessary to full participation in civic life. In Athens, it was taken for granted that only a country bumpkin would be entirely illiterate.

No doubt the growth of markets played a role too, not only helping to free people from the proverbial shackles of status or community, but encouraging a certain habit of rational calculation, of measuring inputs and outputs, means and ends, all of which must inevitably have found some echoes in the new spirit of rational inquiry that begins to appear in all the same times and places.

Within human economies, motives are assumed to be complex. When a lord gives a gift to a retainer, there is no reason to doubt that it is inspired by a genuine desire to benefit that retainer, even if it is also a strategic move designed to ensure loyalty, and an act of magnificence meant to remind everyone else that he is great and the retainer small.

So there's no motive except it is.

Cash transactions between strangers were different, and all the more so when trading is set against a background of war and emerges from disposing of loot and provisioning soldiers; when one often had best not ask where the objects traded came from, and where no one is much interested in forming ongoing personal relationships anyway.

The result, during the Axial Age, was a new way of thinking about human motivation, a radical simplification of motives that made it possible to begin speaking of concepts like “profit” and “advantage”—and imagining that this is what people are really pursuing, in every aspect of existence, as if the violence of war or the impersonality of the marketplace has simply allowed them to drop the pretense that they ever cared about anything else.

Maybe they felt it was the same thing?

Certainly, this picture of humanity does begin to appear, with startling consistency, across Eurasia, wherever we also see coinage and philosophy appear.

Just too many leaps.

In such a world, heroic considerations of honor and glory, vows to gods or desire for vengeance, were at best weaknesses to be manipulated.

Is that wrong though? These aren't great things either.

The predominant school of political thought under the Warring States was that of the Legalists, who insisted that in matters of statecraft, a ruler’s interests were the only consideration, even if rulers would be unwise to admit this.

oppositional intellectuals were faced with two choices: either adopt the reigning terms of debate, or try to come up with a diametrical inversion.

The Confucian ideal of ren, of humane benevolence, was basically just a more complete inversion of profit-seeking calculation than Mo Di’s universal love; the main difference was that the Confucians added a certain aversion to calculation itself, preferring what might almost be called an art of decency.

Axial Age spirituality, then, is built on a bedrock of materialism.

Ehhhhhh, I'll go with it but this is oversimplified.

In just about every case, some notion of God, Mind, Spirit, some active organizing principle that gave form to and was not itself substance, emerged as well. But this was the kind of spirit that, like Leenhardt’s God, only emerges in relation to inert matter.

Materialism is not this.

Miletus was also the commercial center of the region and, perhaps, the first city in the world where everyday market transactions came to be carried out primarily in coins instead of credit.

It was something that could turn into everything. As Seaford emphasizes, so was money.

Siiiiigh leap after leap

within a city, that city’s currency had a special status, since it was always acceptable at face value when used to pay taxes, public fees, or legal penalties. This is, incidentally, why ancient governments were so often able to introduce base metal into their coins without leading to immediate inflation; a debased coin might have lost value when traded overseas, but at home, it was still worth just as much when purchasing a license, or entering the public theater.

It was as if there was a tension there between the will of the community and the physical nature of the object itself.

Naw really?!

With coins this rises to an even more abstract level because that emblem can no longer be conceived as the model in one person’s head, but is rather the mark of a collective agreement.

Becauae they never heard of a contract.

It would be foolish to argue that all Axial Age philosophy was simply a meditation on the nature of coinage,

Just the important bits. Christ.

We only know the ideas of most truly materialist thinkers from the works of their intellectual enemies:

The ultimate effect was a kind of ideal division of spheres of human activity that endures to this day: on the one hand the market, on the other, religion.

Laughs in Catholic Church

Popular uprisings in the ancient world usually ended in the massacre of the rebels.

Perhaps death wasn't a bad option considering slavery and peonage.

Finally, the larger historical achievements of these movements are not, in fact, insignificant. As they took hold, things began to change. Wars became less brutal and less frequent. Slavery faded as an institution, to the point at which, by the Middle Ages, it had become insignificant or even nonexistent across most of Eurasia.

Eventually, new states formed, but in these new states, the nexus between war, bullion, and slavery was broken; conquest and acquisition for their own sake were no longer celebrated as the end of all political life.

Yeah because it sucked

For most of us, “medieval” remains a synonym for superstition, intolerance, and oppression. Yet for most of the earth’s inhabitants, it could only be seen as an extraordinary improvement over the terrors of the Axial Age.

since medieval agriculture was no less efficient than ancient agriculture (in fact, it rapidly became a great deal more so), the amount of work required to feed a handful of mounted warriors and clergymen could not possibly have been anything like that required to feed entire cities. However oppressed medieval serfs might have been, their plight was nothing compared with that of their Axial Age equivalents.

the Middle Ages proper are best seen as having begun not in Europe but in India and China, between 400 and 600 AD, and then sweeping across much of the western half of Eurasia with the advent of Islam. They only really reached Europe four hundred years later.

Stupas and monasteries sprang up everywhere, but the states that sponsored them grew weaker and weaker; centralized armies dissolved; soldiers, like officials, increasingly came to be paid by land grants rather than salaries. As a result, the number of coins in circulation steadily declined.

As a result, most historians have come to write, much as they do in Europe, of a collapse of the money economy, of commerce becoming a “reversion to barter.” Here too, this appears to be simply untrue. What vanished were the military means to extract resources from the peasants.

While the earliest monks were wandering mendicants, owning little more than their begging bowls, early medieval monasteries were often magnificent establishments with vast treasuries.

The key innovation was the creation of what were called the “perpetual endowments” or “inexhaustible treasuries.” Say a lay supporter wished to make a contribution to her local monastery. Rather than offering to provide candles for a specific ritual, or servants to attend to the upkeep of the monastic grounds, she would provide a certain sum of money—or something worth a great deal of money—that would then be loaned out in the name of the monastery, at the accepted 15-percent annual rate.