Debt: The First 5,000 Years

by David Graeber

The International Monetary Fund is only the most dramatic case in point here. It stands at the pinnacle of a great, emerging global bureaucracy—the first genuinely global administrative system in human history, consisting not only of the United Nations, the World Bank, and the World Trade Organization, but also the endless host of economic unions and trade organizations and non-governmental organizations that work in tandem with them—created largely under U.S. patronage. All of them operate on the principle that (unless one is the United States Treasury, or perhaps American Insurance Group), “one has to pay one’s debts”—since the specter of default by any country is assumed to imperil the entire world monetary system, threatening, in Addison’s colorful image, to turn all the world’s sacks of (virtual) gold into worthless sticks and paper. All true. But again, we are speaking of a mere forty years here, in what is likely to be a 400- or 500-year epoch. Nixon’s gambit, what Hudson calls “debt imperialism,” has already come under considerable strain. The first casualty was precisely the imperial bureaucracy dedicated to the protection of creditors (other than those that were owed money by the United States).