Morality and Debt

I suppose being broke offers an apt opportunity to discuss an issue I’ve been wanting to write about for a while now.

My favorite book last year was David Graeber’s Debt: The First 5,000 Years. I’ve preach its virtues to anyone who will listen – including my therapist, who’s paid to listen but also likes to talk politics.

Before reading Debt, I didn’t realize that Jubilee means more than a mere party. It’s actually the absolution of debts – the freeing of indebted servants to their homes and property and the cancellation of debts (except commercial), among other amnesties. They were, of course, used to stem the tide of popular resistance when the debt burden became too crushing. (I also didn’t realize the Rosetta Stone’s illuminating text contained one such decree.) Recently, Croatia did the same for its poor citizens.

People find this absolutely insane and undoable now. They’ve mistaken debt as morality – if you don’t pay your debts, you’re automatically a bad person. Graeber discusses this as well. And it is an important discussion to have.

We can see the crushing debt today. I can see it; not only in my life, but everywhere – from friends to the evening news. And then we have the reports of millennials moving back in with their parents (let’s be honest, it’s Gen Xers, too) because they’re unable to find jobs covering their college debt payments. They’ve entered an economy where full-time, permanent positions are becoming more and more of a rarity. Employment itself seems more like a rarity has time goes on.

We’re falling back into multi-generational households and budgets. After the housing crisis and resulting depression, the Baby Boomers aren’t doing all that well either. So having their kids (like myself) move back home, and, inevitably, taking on debt payments while their children look for nonexistent work, poses an even more pressing problem: it’s going to be much more difficult to support our aging families if we can’t find work ourselves.

All of this is a problem – not only for those us of in debt, but for the country .

The lack of any discussion of a debt cancellation – and the only reaction to the Croatian example being it is unworkable in the U.S. – partially shows the transference of market debt into moral debt.

One thing I think we’ve overlooked, however, is that credit is based on a certain amount of trust when performed between people. Commercially, it’s much more of a gamble. VISA takes a risk on the people it offers credit. If those folks should default, they should take the hit for a bad bet; not use the court system and government as bill collectors. To argue that no one will pay their debts if a cancellation is proposed is to forget that the majority of people pay their debts – or would like to – if they could. Compassion for the overburdened is far more moral than demanding the same person to pay their debts out of no income. Graeber gives a good reason not to listen to economists here. See his discussion of Adam Smith’s assumption of bartering having actually existed in history (it hasn’t).

The majority of Americans are deeply in debt. A Jubilee is becoming necessary.

I wish Graeber weren’t so involved in the Occupy Movement. It would make his arguments stronger in the realm of ethos. But the book is necessary reading – for everyone. It’s big, but quite readable, interesting and, dare I say it, enlightening. In fact, I first read it in Kindle version but then ordered it in paperback so I could underline in actual marker upon second reading.

To understand debt, you should read Debt.

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