Debt has been weaponized “pretty much continually” for the last four or five millennia by “people who have access to the ability to make credit,” anthropologist, Occupy activist and anarchist David Graeber said on the “Keiser Report” TV show in late April.
“This is the great social crisis of antiquity,” he continued. “If you go back to people like Aristotle, Hammurabi, Confucius—when they imagined the great social crisis, weaponized debt was what they had in mind. That this tiny percentage of the population would essentially enslave everybody else. They would start losing their flocks, their fields, eventually they would have to start selling members of their family or even themselves into slavery. And the way I always put it—if Aristotle were alive today, he would probably see the distinction between being so deeply in debt that you have to sell yourself to work for others and being so deeply in debt that you have to rent yourself to work for others as something of a legalistic distinction.”Truthdig
David Graeber: They’re Enslaving You With Debt
Max Keiser interview
23 comments:
Make mine a free Corvette!
And throw in a free 2500 sq ft center hall colonial with attached two car garage to put it in while you are at it!
If you were compensated with new fiat, Matt, for all the counterfeiting cartel has subtly stolen from you (plus interest? ;) ) you might well afford a new car and a nice house.
And before you think "Price inflation!", a temporary ban on new credit creation would create a huge amount of deflation for that new fiat to neatly fill with no net change in the money supply.
You aren't allowed to say it's all about power. If you do you're a communist.
The ability to subordinate people via debt is a consequence of inequalities in bargaining power which is itself a consequence of fundamental economic inequality. With economic equality, debt becomes just a useful method of making contracts that defer performance into the future.
The fundamental problem is not the "money system" - onerous debt and economic dependency will occur under any monetary system, so long as some have much more than others.
The fundamental problem is not "crony capitalism". Capitalism itself, with or without cronies, generates inequality and the opportunity for predatory lending and desperate borrowing.
And not just capitalism, although this is the inevitable outcome of modern capitalism, as Graeber explains in Two notions of liberty revisited - or how to disentangle Liberty and Slavery
Capitalism is the modern extension of feudalism, which was an extension of prior social forms.
Notice how in neoliberal capitalism, the chief focus of the ownership class is eliminating the bargaining power of labor, which threatens the commodity status of labor and raises it to an independent factor of production on the level of capital. The ownership class decries this as creeping "socialism" or "inflationary," and resorts to all sorts of tactics, fair and foul, to divide workers and prevent them from exercising bargaining power.
HOW did some come to have much more than others? If history is a guide usury and more recently usury + credit creation is the answer.
F,
Here are the richest people in the world:
http://www.forbes.com/billionaires/list/
I dont see many "money lenders".
What are you looking at?
All these people do is own firms that sell goods and services for bit more than it costs them to produce or provide them... rinse and repeat...
rsp,
The key is word is land. If people would own their houses, there would not be slavery nor financial crisis.
Kaj,
imo housing is up right now due to petroleum prices being so high that feeds in to all the costs of construction... then the govt just 'ratifies' these high prices via granting loans for the homes at this price level... this applies the govt "seal of approval" in current prices...
The oil cartel just has too much power to set prices right now... we should be working to reduce use of petroleum as much as possible and to that end it was good to see Musk & Tesla out there over the last few weeks..
rsp,
The issue has always been land and the anarchists of various flavours of the XIX knew it and pointed it out to Marxists repeatedly, even above ownership of industrial capital.
When there is class segregation caused by land ownership we are going to have problems always regardless of the credit system. All our modern society is hierarchical in this and people is pushed into the dynamic (wage labour is a form of modern slavery) because they don't own resources to labour with in the first place. More sadly is the industrial-model of our education with teaches people since they are kids to behave along this lines perpetuating the cycle.
Maybe a mixture of ownership of land (land means resources in general) by the people with modern technologies productivity would make our society more well-functioning. But doubt we can enforce it (a complete redistribution of wealth!) so we are in a conundrum regarding this.
@ Matt
Right and the price of petroleum needs to be a lot higher and/or rationing must be implemented ASAP. We cannot wait for the market to decide when sustainable energy sources become "cost-effective." Taking externalities into account, we passed that point long ago, probably in the 70's when pollution became a health issue and the solution to pollution was no longer dilution in the environment, especially atmosphere and oceans.
For the sake of argument, let's disregard global climate change and just consider the cost of pollution wrt to health and reduced performance. That alone is huge in an era of urbanization where over two-thirds of the population lives in cities and their environs. It was obvious a few decades ago with the smog, but now that the smog issue has been resolved to a degree, most people are unaware of the nano-particle pollution, which is in many ways worse.
The true cost of petroleum use considering both nominal cost and human cost is staggering.
If global climate change is figured in, the threat becomes existential.
Tom I dont know if you have seen the Tesla info coming out the last several weeks:
http://www.teslamotors.com/
If anybody is going to take down this oil cartel it is going to be these people like Musk and the IT-type geeks who have either been eliminating or at least radically changing every other industry so far save personal transportation here...
now it looks like they have their sights set on that industry and if their track record is any guide, the oil people and their nations that depend on these exports better be on it and trying to figure out how to economically respond to this pronto...
I think a lot of these IT geek-type folks are heavy libertarians and they do not like being "under the authority of OPEC" probably as much as I hate it... although I am not libertarian...
This is perhaps a common ground for libertarians and authoritarians... like you say from both an evnironmental and overall productivity standpoint...
rsp,
When there is class segregation caused by land ownership we are going to have problems always regardless of the credit system Ignacio
I agree we are long overdue for a 50 year Jubilee (Leviticus 25). But I point out that it was the credit system that dispossessed many small farmers. Farmers have traditionally hated banks and for good reason.
Along with land redistribution we might as well redistribute the common stock of large corporations too. That might make the use of common stock as private money more widespread too.
Usury alone is bad but combined with credit it is a disaster since negative real interest rates drive people into debt who might have otherwise saved.
I dont see many "money lenders". Matt Franko
Credit creation also benefits the so-called "creditworthy."
An interesting discussion on Graeber, including Graeber himself, is to be found here: http://nakedkeynesianism.blogspot.com/2013/06/more-on-david-graebers-debt.html
Thanks, David. Promoted to a post.
F. Beard said...
"... for all the counterfeiting cartel has subtly stolen from you "
You seem to believe that any increase in the money supply inevitably causes a corresponding increase in the price level.
This doesn't hold universally true in a static economy much less in one that is dynamic.
Just to let you know, an increasing money supply is not the only or the even most common cause of inflation.
F. Beard said...
"And before you think "Price inflation!", a temporary ban on new credit creation would create a huge amount of deflation"
Your irrational fear of inflation seems to have blinded you to the devastation deflation wreaks on an economy. Deflation is by far more damaging of two.
In fact, a little inflation is a good thing.
Kaj Risberg said...
"The key is word is land. If people would own their houses, there would not be slavery nor financial crisis."
I don't see how this would change anything even if sufficient land existed for everyone.
People would still need work, debts would still grow at compound rates, etc, etc, etc.
Blogger F. Beard said...
"HOW did some come to have much more than others? If history is a guide usury and more recently usury + credit creation is the answer."
The problem isn't credit creation or debt per se. The problem lies in the miracle of compound interest which causes debts to mount up faster than the ability of the real economy to service them.
Debt grows exponentially while the real economy grows instead in an S-curve.
June 1, 2013 at 2:01 PM
The problem isn't credit creation or debt per se. Vilhelmo
Yes, it is. Credit creation drives people into debt else they are priced out of the market by those who do borrow.
But common stock is an ethical form of endogenous money creation that requires no borrowing, much less at interest. So there's really no excuse for the present system.
Your irrational fear of inflation seems to have blinded you to the devastation deflation wreaks on an economy.
Oh, deflation is far worse, I agree. But we can balance a universal bailout with new fiat with at a least temporary ban on new credit creation for no net change in the money supply if desired or for a money supply that grows at a desired rate.
Moreover, the banking cartel is a holdover from a commodity money mentality since it assumes a limited money supply that must be borrowed and lent. But any amount of common stock can be created without borrowing or lending.
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