Debt: The First 5,000 Years

by David Graeber

In many periods—from imperial Rome to medieval China—probably the most important relationships, at least in towns and cities, were those of patronage. Anyone rich and important would find himself surrounded by flunkies, sycophants, perpetual dinner guests, and other sorts of willing dependents. Drama and poetry of the time are full of such characters.55 Similarly, for much of human history, being respectable and middle-class meant spending one’s mornings going from door to door, paying one’s respects to important local patrons.

seems to me that this agreement between equals to no longer be equal (at least for a time) is critically important. It is the very essence of what we call “debt.”

What, then, is debt? Debt is a very specific thing, and it arises from very specific situations. It first requires a relationship between two people who do not consider each other fundamentally different sorts of being, who are at least potential equals, who are equals in those ways that are really important, and who are not currently in a state of equality—but for whom there is some way to set matters straight.

This means that there is no such thing as a genuinely unpayable debt. If there was no conceivable way to salvage the situation, we wouldn’t be calling it a “debt.”

During the time that the debt remains unpaid, the logic of hierarchy takes hold. There is no reciprocity. As anyone who has ever been in jail knows, the first thing the jailors communicate is that nothing that happens in jail has anything to do with justice. Similarly, debtor and creditor confront each other like a peasant before a feudal lord. The law of precedent takes hold.

This is what makes situations of effectively unpayable debt so difficult and so painful. Since creditor and debtor are ultimately equals, if the debtor cannot do what it takes to restore herself to equality, there is obviously something wrong with her; it must be her fault.

True, if we were really determined, we could argue (as some do) that communism is a condition of permanent mutual indebtedness, or that hierarchy is constructed out of unpayable debts. But isn’t this just the same old story, starting from the assumption that all human interactions must be, by definition, forms of exchange, and then performing whatever mental somersaults are required to prove it? No. All human interactions are not forms of exchange. Only some are. Exchange encourages a particular way of conceiving human relations.

Debt is what happens in between: when the two parties cannot yet walk away from each other, because they are not yet equal. But it is carried out in the shadow of eventual equality. Because achieving that equality, however, destroys the very reason for having a relationship, just about everything interesting happens in between.61 In fact, just about everything human happens in between—even if this means that all such human relations bear with them at least a tiny element of criminality, guilt, or shame.

In English, “thank you” derives from “think.” It originally meant, “I will remember what you did for me”—which is usually not true either—but in other languages (the Portuguese obrigado is a good example) the standard term follows the form of the English “much obliged”—it actually does mean, “I am in your debt.” The French merci is even more graphic: it derives from “mercy,” as in begging for mercy; by saying it you are symbolically placing yourself in your benefactor’s power—since a debtor is, after all, a criminal.

How did a man’s wife and children come to be considered no different than his sheep and crockery—as property to be liquidated on occasion of default? Was it normal for a man in first-century Palestine to be able to sell his wife? (It wasn’t.)5 If he didn’t own her, why was someone else allowed to sell her if he couldn’t pay his debts?

this very reason, since it suggests that we are dealing with a crude version of the kind of currencies we use today. But this is precisely what we don’t find. Often, such currencies are never used to buy and sell anything at all.9 Instead, they are used to create, maintain, and otherwise reorganize relations between people: to arrange marriages, establish the paternity of children, head off feuds, console mourners at funerals, seek forgiveness in the case of crimes, negotiate treaties, acquire followers—almost anything but trade in yams, shovels, pigs, or jewelry.

I’ve decided therefore to refer to them as “social currencies,” and the economies that employ them as “human economies.”

Historically, commercial economies—market economies, as we now like to call them—are a relative newcomer. For most of human history, human economies predominated.

Rospabé’s argument is that “primitive money” was not originally a way to pay debts of any sort. It’s a way of recognizing the existence of debts that cannot possibly be paid. His argument is worth considering in detail. In most human economies, money is used first and foremost to arrange marriages.

When a Fijian suitor’s family presents a whale tooth to ask for a woman’s hand in marriage, is this an advance payment for the services the woman will provide in cultivating her future husband’s gardens? Or is he purchasing the future fertility of her womb? Or is this a pure formality, the equivalent of the dollar that has to change hands in order to seal a contract? According to Rospabé, it’s none of these. The whale tooth, however valuable, is not a form of payment. It is really an acknowledgment that one is asking for something so uniquely valuable that payment of any sort would be impossible. The only appropriate payment for the gift of a woman is the gift of another woman; in the meantime, all one can do is to acknowledge the outstanding debt.

Money, then, begins, as Rospabé himself puts it, “as a substitute for life.”14 One might call it the recognition of a life-debt. This, in turn, explains why it’s invariably the exact same kind of money that’s used to arrange marriages that is also used to pay wergeld (or “bloodwealth,” as it’s sometimes also called): money presented to the family of a murder victim so as to prevent or resolve a blood-feud.

So here again, money is first and foremost an acknowledgment that one owes something much more valuable than money.

Money almost always arises first from objects that are used primarily as adornment of the person. Beads, shells, feathers, dog or whale teeth, gold, and silver are all well-known cases in point. All are useless for any purpose other than making people look more interesting, and hence, more beautiful.

the peculiar progression of ideas that so often mark human economies. On the one hand, human life is the absolute value. There is no possible equivalent. Whether a life is given or taken, the debt is absolute.

Once the game exists, once the principle of substitution comes in, there was always the possibility of extending it. When that begins to happen, systems of debt that were premised on creating people can—even here—suddenly become the means of destroying them.

The Atlantic Slave Trade as a whole was a gigantic network of credit arrangements. Ship-owners based in Liverpool or Bristol would acquire goods on easy credit terms from local wholesalers, expecting to make good by selling slaves (also on credit) to planters in the Antilles and America, with commission agents in the city of London ultimately financing the affair through the profits of the sugar and tobacco trade.

Even in relatively simple societies little penetrated by money, there were ritual needs for substantial expenditures—the payment of bride-price for marriage and the slaughter of a buffalo at the death of a family member. It is widely reported that such ritual needs are the most common reason why the poor become indebted to the rich …80

by making a distinction between commercial economies and what I call “human economies”—that is, those where money acts primarily as a social currency, to create, maintain, or sever relations between people rather than to purchase things. As Rospabé so cogently demonstrated, it is the peculiar quality of such social currencies that they are never quite equivalent to people. If anything, they are a constant reminder that human beings can never be equivalent to anything—even, ultimately, to one another.

in such economies, money can never substitute for a person: money is a way of acknowledging that very fact, that the debt cannot be paid.

to make a human being an object of exchange, one woman equivalent to another, for example, requires first of all ripping her from her context; that is, tearing her away from that web of relations that makes her the unique conflux of relations that she is, and thus, into a generic value capable of being added and subtracted and used as a means to measure debt. This requires a certain violence. To make her equivalent to a bar of camwood takes even more violence, and it takes an enormous amount of sustained and systematic violence to rip her so completely from her context that she becomes a slave.

why slavery is often elsewhere. colonies in africa had servants not slaves while the US still had slavery.

process that dislodges people from the webs of mutual commitment, shared history, and collective responsibility that make them what they are, so as to make them exchangeable—that is, to make it possible to make them subject to the logic of debt. Slavery is just the logical end-point, the most extreme form of such disentanglement.

On the one hand, violence: men who live by violence, whether soldiers or gangsters, are almost invariably obsessed with honor, and assaults on honor are considered the most obvious justification for acts of violence. On the other, debt. We speak both of debts of honor, and honoring one’s debts; in fact, the transition from one to the other provides the best clue to how debts emerge from obligations;

when slaves did rebel against their masters, they rarely rebelled against slavery itself.

First-year Roman law students, for instance, were made to memorize the following definition: slavery is an institution according to the law of nations whereby one person falls under the property rights of another, contrary to nature.2 At the very least, there was always seen to be something disreputable and ugly about slavery. Anyone too close to it was tainted. Slave-traders particularly were scorned as inhuman brutes. Throughout history, moral justifications for slavery are rarely taken particularly seriously even by those who espouse them. Instead, most people saw slavery much as we see war: a tawdry business, to be sure, but one would have to be naïve indeed to imagine it could simply be eliminated.

(violent men, as we all know, are almost invariably obsessed with honor).

Some of the most genuinely archaic forms of money we know about appear to have been used precisely as measures of honor and degradation: that is, the value of money was, ultimately, the value of the power to turn others into money.

What was so unusual about Celtic systems—and the Irish one went further with this than any other—was that honor could be precisely quantified. Every free person had his or her “honor price”: the price that one had to pay for an insult to the person’s dignity. Here too there was a graded scale. The honor price of a king, for instance, was seven cumals, or seven slave girls—

All this, in turn, makes it possible to understand both something of the nature of honor, and why slave girls were kept as units for reckoning debts of honor even at a time when—owing no doubt to church influence—they no longer actually changed hands. At first sight it might seem strange that the honor of a nobleman or king should be measured in slaves, since slaves were human beings whose honor was zero. But if one’s honor is ultimately founded on one’s ability to extract the honor of others, it makes perfect sense. The value of a slave is that of the honor that has been extracted from them.

What makes Medieval Irish laws seem so peculiar from our perspective is that their exponents had not the slightest discomfort with putting an exact monetary price on human dignity. For us, the notion that the sanctity of a priest or the majesty of a king could be held equivalent to a million fried eggs or a hundred thousand haircuts is simply bizarre. These are precisely the things that ought to be considered beyond all possibility of quantification. If Medieval Irish jurists felt otherwise, it was because people at that time did not use money to acquire eggs or haircuts.28 It was the fact that it was still a human economy, in which money was used for social purposes, that made it possible to create such an intricate system whereby it was possible not just to measure but to add and subtract specific quantities of human dignity—and in doing so, provide us with a unique window into the true nature of honor itself. The obvious question is: What happens to such an economy when people do begin to use the same money used to measure dignity to acquire eggs and haircuts? As the history of ancient Mesopotamia and the Mediterranean world reveals, the result was a profound—and enduring—moral crisis.

this section is a good summary of how human economies used “debts” for honor

Mesopotamian husband couldn’t sell his wife either. Or, normally he couldn’t. Still, everything changed the moment he took out a loan. Since if he did, it was perfectly legal—as we’ve seen—to use his wife and children as surety, and if he was unable to pay, they could then be taken away as debt pawns in exactly the same way that he could lose his slaves, sheep, and goats. What this also meant was that honor and credit became, effectively, the same thing: at least for a poor man, one’s creditworthiness was precisely one’s command over one’s household, and (the flip side, as it were) relations of domestic authority, relations that in principle involved a responsibility for care and protection, became property rights that could indeed be bought and sold.

Another source for commercial prostitution was the pauperization of farmers and their increasing dependence on loans in order to survive periods of famine, which led to debt slavery. Children of both sexes were given up for debt pledges or sold for “adoption.” Out of such practices, the prostitution of female family members for the benefit of the head of the family could readily develop. Women might end up as prostitutes because their parents had to sell them into slavery or because their impoverished husbands might so use them. Or they might become self-employed as a last alternative to enslavement. With luck, they might in this profession be upwardly mobile through becoming concubines.

Thus, commercial prostitution came to be seen as a social necessity for meeting the sexual needs of men. What remained problematic was how to distinguish clearly and permanently between respectable and non-respectable women. This last point is crucial. The most dramatic known attempt to solve the problem, Lerner observes, can be found in a Middle Assyrian law code dating from somewhere between 1400 and 1100 BC, which is also the first known reference to veiling in the history of the Middle East—

Prostitutes and slaves (and prostitutes are now considered to include unmarried temple servants as well as simple harlots) are not allowed to wear veils. The remarkable thing about the laws is that the punishments specified in the code are not directed at respectable women who do not wear veils, but against prostitutes and slaves who do.

in common use in everyday transactions. By the fifth century, in Greek cities, the agora, the place of public debate and communal assembly, also doubled as a marketplace. One of the first effects of the arrival of a commercial economy was a series of debt crises, of the sort long familiar from Mesopotamia and Israel. “The poor,” as the author of Constitution of the Athenians succinctly put it, “together with their wives and children, were enslaved to the rich.”58

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. Before long, the entire coast from Crimea to Marseille was dotted with Greek cities, which served, in turn, as conduits for a lively trade in slaves.

For the aristocrats, who wrote most of the surviving texts, money was the embodiment of corruption. Aristocrats disdained the market. Ideally, a man of honor should be able to raise everything he needed on his own estates and never have to handle cash at all.60 In practice, they knew this was impossible. Yet at every point they tried to set themselves apart from the values of the ordinary denizens of the marketplace: to contrast the beautiful gold and silver beakers and tripods they gave one another at funerals and weddings with the vulgar hawking of sausages or charcoal;

The Assyrian habit of veiling was not widely adopted in the Middle East, but it was adopted in Greece. 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.64

Money, then, had passed from a measure of honor to a measure of everything that honor was not. To suggest that a man’s honor could be bought with money became a terrible insult—

One question that isn’t clear from all this is, Why? Why had money, in particular, become such a symbol of degradation? Was it all because of slavery? One might be tempted to conclude that it was: perhaps the newfound presence of thousands of utterly degraded human beings in ancient Greek cities made any suggestion that a free man (let alone a free woman) might in any sense be bought or sold particularly insulting. But this is clearly not the case. Our discussion of the slave money of Ireland showed that the possibility of the utter degradation of a human being was in no sense a threat to heroic honor—in a way, it was its very essence.

thing that really seemed to bother them about money was simply that they wanted it so much. Since money could be used to buy just about anything, everyone desired it. That is: it was desirable because it was non-discriminating.

We might say, then, that money introduced a democratization of desire. Insofar as everyone wanted money, everyone, high and low, was pursuing the same promiscuous substance. But even more: increasingly, they did not just want money. They needed it. This was a profound change. In the Homeric world, as in most human economies, we hear almost no discussion of those things considered necessary to human life (food, shelter, clothing) because it is simply assumed that everybody has them.

The only thing “absolute” about my rights to a chainsaw is my right to prevent anyone else from using it.92

What made Roman slavery so unusual, in historical terms, was a conjuncture of two factors. One was its very arbitrariness. In dramatic contrast with, say, plantation slavery in the Americas, there was no sense that certain people were naturally inferior and therefore destined to be slaves. Instead, slavery was seen as a misfortune that could happen to anyone.

When Medieval political theorists spoke of “liberty,” they were normally referring to a lord’s right to do whatever he wanted within his own domains. This was, again, usually assumed to be not something originally established by agreement, but a mere fact of conquest: one famous English legend holds that when, around 1290, King Edward I asked his lords to produce documents to demonstrate by what right they held their franchises (or “liberties”), the Earl Warenne presented the king only with his rusty sword.

In fact (as Medieval jurists were well aware), one man’s right is simply another’s obligation. My right to free speech is others’ obligation not to punish me for speaking; my right to a trial by a jury of my peers is the responsibility of others to maintain a system of jury duty. The problem is just the same as it was with property rights: when we are talking about obligations owed by everyone in the entire world, it’s difficult to think about it that way. It’s much easier to speak of “having” rights and freedoms.