Debt: The First 5,000 Years

by David Graeber

The Guanzi, a collection that in early imperial China became the standard primer on political economy, notes, “There were people who lacked even gruel to eat, and who were forced to sell their children. To rescue these people, Tang coined money.”31 The story is clearly fanciful (the real origins of coined money were at least a thousand years later), and it is very hard to know what to make of it. Could this reflect a memory of children being taken away as debt sureties? On the face of it, it seems more like starving people selling their children outright—a practice that was to become commonplace in later periods of Chinese history.32 But the juxtaposition of loans and the sale of children is suggestive, especially considering what was happening on the other side of Asia at exactly the same time. The Guanzi later goes on to explain that these same rulers instituted the custom of retaining 30 percent of the harvest in public granaries for redistribution in emergencies, so as to ensure that no one would ever be reduced to such desperate straits again. In other words, they began to set up just the kind of bureaucratic storage facilities that, in places like Egypt and Mesopotamia, had been responsible for creating money as a unit of account to begin with.