Topic: What is Debt? - page 7. (Read 6618 times)

a charge against a bank deposit account.

debt. an amount of money owed by a person, firm or government (the borrower) to a lender. Debts arise when individuals, etc., spend more than their current income or when they deliberately plan to borrow money to purchase specific goods, services or ASSETS (houses, financial securities, etc.).

The debt is the borrowing money for someone or company that you also need to pay when it comes to duedates.

There's approaches for free market without capitalism. Silvio Gesell saw the interest as the source of capitalism, identifying money as the only true capital. According to him, the fact that real capitals have a sustained profit (that doesn't drop to zero by competition) is a byproduct of money-capital (basic interest on money, excluding the risk premium).
Kevin Carson has a different view, but he claims to be a free market anti-capitalist.


Oh, that looks exponential. Let's see 224 * (1.11 ^ 4 ) = 340.047772. It seems that Greece has made efforts to reduce debt, but that vertical line is what they got. Interest makes debts grow exponentially.

For me, the more interesting fact of the article is that LETS-like temples existed in Mesopotamia long time ago, maybe even before gold cash. The fact that precious metals can be cash (not a relation between two parties but between an individual and the rest of the cash acceptors as a whole) represents an advantage over credit money and explains its success. In this sense, the current fiat moneys are not pure cash, because their are kind of a liability from the central bank to the holder, but being widely accepted checks, they become effectively cash. And when cash is everlasting, interest is unavoidable.
I bet those temples didn't charge interest, after all charging interest on a check you issue is kind of weird if you think about it. The fed lending money to existence at interest is like a joke.

It's an interesting anthropological and historical view, but it all goes down hill towards the end when talking about how the way towards "democracy" is sovereign default.

The national debt is not slavery, it's the crack on which nations get high; nobody goes to the streets when the foreign capital flows into the country at abysmal interest rates, when socialist governments rack up the bill under the pretense of economic growth. It's only when the bill must be paid that people start to cry for sovereignty and democracy. Furthermore, the money states owe is not some made up fiat of the international elite, it's usually the savings of some foreign or domestic pensioners, or someone else's college fund. Defaulting on the debt will not hurt the fiat issuer of the currency, but the savers of the world.

I can very much agree that many 3rd world countries were ruled by dictators that borrow billions for weapons and personal luxury. In those cases, sure, it's your choice to finance those leaders, and your risk to lose everything when the next revolution happens. But for countries like Greece and Italy ? Functional democracies that chose socialism en-masse, increased their national debt by 50% in the last 5 years alone, and somehow forgot they need to pay it back eventually ? Bitch, please.

I read it last night when I had a fever but the first half I read was very interesting especially the part about barter coming before money being a fairytale. I can remember we were taught this in school and
Barter trade associations use it to promote themselves.

Better said debt was used as money before coin was used as money, according to him.

I find it stunning that debt came before money but it makes sense.

Excellent read, and some thought provoking ideas.

Thanks for posting!

Yes, it was interesting to read. You had to filter his obvious marxist views, but its worth the read.


I think the titles capitalism and socialism are worthless. There are too many ideologies under those tents, even opposing ones inside the same tent, that it does not tell you anything that someones call himself socialist or capitalist.

Excellent article, thanks for posting it. It highlights the cyclical nature of economies and financial structures very nicely. The analysis appears to be based on societies with written language, so I'd be curious to know what the Graeber's perspective is on those cultures that were spoken-language only. There also seems to be an assumption of exchange only in goods for goods.

It would seem to me that barter would dominate at seasonal tribal gatherings, during which surpluses would be offered in exchange for other surpluses. The exchange wouldn't have to be for physical goods: surpluses have been offered as a communal good, indicating a particular tribe's success and garnering respect or support. The intangible reputation in that case being the return. Records for these transactions simply don't exist and inferring as such would be virtually impossible.

There's a small archipelago nation in the South Pacific that holds such seasonal meetings, although exposure to modern society is eroding the practice. During these events, each tribe would contribute to a communal 'pile' of goods that formed the cumulative surplus of their respective production after providing sufficiently for themselves. The greater the pile, the prouder the society. The greater the share of the pile offered by a particular tribe, the greater the respect for that tribe. Out of the surplus, all tribes would then partake of the excess during festivities.

No one blanket explanation seems to cover everything, so I find it's still a chicken & egg situation, but it's good to have different persepectives.

A major point outlined is something that I agree with entirely - debt slavery is occurring and taking root now more than at any other point in history, especially with the mechanism and timing by which it is being expanded. Graeber's explanation helps to pull back the veneer of absurdity that is todays' status quo. I am left wondering whether this is the final stage of our species as we know it.

The issue of capitalism is one that I think isn't as clear, though. I find capitalism to be more of an observation of natural behavioral interaction. Whereas communism, socialism or other forms of centralized governance describe a structure to be maintained, capitalism is an observation of an order that arises naturally. This is actually very well examined by Eric S. Raymond in The Cathedral and the Bazaar.

I found this an interesting interview about the history of money and debt.
 Check it out.

What is Debt? – An Interview with Economic Anthropologist David Graeber