“Surely one has to pay one’s debts.” This simple statement is powerfully misleading. It seems so self-evident. If people weren’t obliged to pay their debts… then what? It’s not really an economic statement it is a moral one. A person who shirks debts isn’t just economically deficient they’re morally deficient.
In fact, the language of debt and morality are so interwoven they’re almost interchangeable. What is justice but paying people their due? Paying debts is about accepting responsibilities and fulfilling obligations to other people. The central question of Debt is: “What, precisely, does it mean to say that our sense of morality and justice is reduced to the language of a business deal?”
An important question because the easy way we conflate the economic and the moral sphere leads to some tragic consequences. Graeber describes one example from his time in Madagascar:
Shortly before I arrived, there had been an outbreak of malaria. It was a particularly virulent outbreak because malaria had been wiped out in highland 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 auterity programs, the government had to cut the monitoring program. Ten-thousand people died. I met young mothers grieving for lost children. One might think it would be hard to make a case that the loss of ten-thousand human lives is really justified in order to ensure that Citibank wouldn’t have to cut its losses on on irresponsible loan that wasn’t particularly important to its balance sheet anyway…
…but that is exactly the kind of thing that saying “surely one has to pay one’s debts” results in. It is a deranged world that elevates corporate balance sheets over human suffering but that is the world we actually live in.
The moral confusion which surrounds debt is exacerbated by the fact that not all debts are treated equally. In the 1700’s the British public was outraged that debtors prisons were regularly divided into two sections. “Aristocratic inmates, who often thought of a brief stay in Fleet or Marshalsea as something of a fashion statement, were wined and dined by liveried servants and allowed to receive regular visits from prostitutes. On the “common side,” impoverished debtors were shackled together in tiny cells, “covered with filth and vermin,” as one report put it, “and suffered to die, without pity, of hunger and jail fever.'”
You can see international economic arrangements today as a larger version of the same idea. The US operates a massive deficit budget, but we are the Cadillac debtor while “Madagascar is the pauper starving in the next cell – while the Cadillac debtor’s servants lecture him on how his problems are due to his own irresponsibility.”
The same gap in treatment exists between corporate debts and personal debts. If you get into credit card debt, medical debt, or even student loan debt there is increasingly little you can do to escape it. Bankruptcy laws get more restrictive every year, but for corporations who are “too big to fail” a federal bailout awaits.
Appropriately, the two different methods for handling debts makes people mad. Graeber points out “that most everywhere, one finds that the majority of human beings hold simultaneously that (1) paying back money one has borrowed is a simple matter of morality, and (2) anyone in the habit of lending money is evil.” Certainly in Christian history usury was nearly always regarded as one of the very worst sins. Worse than murder in some cases.
And maybe those Christians had a point because of “money’s capacity to turn morality into a matter of impersonal arithmetic – and by so doing to justify things that would otherwise seem outrageous or obscene.” If you owe me a favor, or respect, or gratitude then the humanity of both parties remains in view. If your obligation is phrased as a debt that can be quantified then it becomes cold and impersonal. “One does not need to calculate the human effects; one need only calculate principal, balances, penalties and rates of interest. If you end up having to abandon your home and wander in other provinces, if your daughter ends up in a mining camp working as a prostitute, well, that’s unfortunate, but incidental to the creditor. Money is money, and a deal’s a deal.”
This perfectly describes the situation we are in as far as I’m concerned. In a debt-driven economy people have become almost entirely incidental. You can’t get any more morally confused than that.