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This episode features anthropologist and activist David Graeber taking questions about his book Debt: The First 5,000 Years. He spoke at MonkeyWrench Books here in Austin, Texas, on November 9, 2011. It is the second in a two-part episode.

Madagascar, instead of being an anarchy, was an interesting example of direct democracy in operation – not voting things up and down, endorsing one line and rejecting another, but creating a synthesis. The style of argument was the exact opposite of the sectarian type of argument where different opinions are seen as a moral problem. Madagascar faced the problem of debt related to the IMF “aid” programme. 

 The consumer economy runs on debt, the modern nation state is based on deficit financing. International relations seem to be all about debt, but bizarrely no history book was ever written on debt. It is a puzzling contradiction that repaying debts is perceived as an ultimate moral value, higher than human lives, while at the same time money lenders are seen as evil. In many old languages debt and sin are the same words. It is a sin not to repay debt, but it is also a sin to lend money. It appears that the language of debt is the most effective means to address the arbitrary violent inequality and blame the victim. The language of politics becomes the language of debt. Money gets entangled with violence.

Neolithic villagers dealt with each other based on favours and these would be cashed in later based on approximate estimates of values. Gift economies rank things without the need for accurate calculations. Most transactions throughout history have used virtual credit money, not coinage. It was customary to cancel debts periodically. Michael Hudson made the argument that interest bearing debts must go along with periodic debt cancellations. The first known reference to the concept of freedom is the Sumerian word Ama-gi, which actually means relief from debt and obligations. Taxing the conquered nations was based on putting coins into circulation for the army who “paid” the locals for food and the locals paid tax. Military-coinage-slavery complex. Markets crop up around armies. When empires break up, coins go away and credit money returns again. Cheque is an Arabic word, financial globalisation is not a new thing. Free market originates in Sharia. Debt cancellation and anti-usury laws were widely used. As opposed to protection of debtors, nowadays there are mechanisms to protect creditors. However, if the cycle lasts circa 500 years, we are only 30 years in. There are social movements searching for new solutions. Debt is nothing but a promise. Just look at the AIG case.