Debt: The First 5,000 Years

“For almost two years, I had lived in the highlands of Madagascar. Shortly before I arrived, there had been an outbreak of malaria. It was a particularly virulent outbreak because malaria had been wiped out of Madagascar many years before, so that, after a couple of generations, most people had lost their immunity. The problem was, it took money to maintain the mosquito eradication program, since there had to be periodic tests to make sure mosquitoes weren’t starting to breed again and spraying campaigns if it was discovered they were. Not a lot of money. But owing to IMF-imposed austerity programs, the government had to cut the monitoring program. Ten thousand people died. I met young mothers grieving for lost children.”

Graeber uses his experience living in Madagascar to illustrate the insidious nature of the assumption that debt must be repaid. Paying one’s debt is supposed to be about giving people what is due to them. By repaying debt, a person is fulfilling their obligation to another person, just as they would expect that person to fulfil their obligations to them. This kind of thinking could make terrible things appear unremarkable, as is the case with the Madagascar example. The global community believed so strongly that Madagascar should repay its debt. This viewpoint led the government of Madagascar to have to decide what community programs they could pay for. They chose to cut the mosquito monitoring program, which had the unintended consequence of starting a malaria epidemic. To the global community, repaying debt was more important than the preventable loss of thousands of human lives.

“I was walking down the street with a friend the other day and a guy with a gun jumps out of an alley and says “Stick ’em up.’ As I pull out my wallet, I figure ‘Shouldn’t be a total loss.’ So I pull out some money, turn to my friend and say, ‘Hey, Fred, here’s that fifty bucks I owe you.’ The robber was so offended he took out a thousand dollars of his own money, forced Fred to lend it to me at gunpoint, and then took it back again.”

This old joke illustrates one of the key rules of economic relationships: whoever holds the gun or has the strongest military will always hold the power even if they owe other entities money. Violence turns human relationships into mathematics. The creditor has the means to specify how much the debtor owes them through this threat of violence.