Debt, by David Graeber

Benjamin Franklin said that nothing is certain except death and taxes. Death is obvious, but taxes?

One common explanation for this is because we owe our lives to a greater community, embodied in the state. However, the state is a human construct. Perhaps, alternatively, we owe our lives to our parents. But that also doesn't make sense.

A debt is an agreement between two consenting parties. No one consents to their own conception, and we can't assume that life is a gift; some find it burdensome. In 2019, an Indian man sued his parents for giving birth to him. So, parents force their children to exist, in hopes that their children will be grateful. In that sense, it seems like the parent owes a debt to the child. If that's the case, the parent has an obligation to repay the debt by raising their child until the child is self-sufficient. Or, in a collectivist mindset, we might expand that arrangement to say that the whole community has a debt to the child, since reproduction is essential for the preservation of the community. The community rears young because it wants to, not because the children want to be born.

But, nonetheless — even if we our creation serves the will of someone else — we come into the world with a heavy sense that we owe something, that we are indebted.

David Graeber's Debt explores the idea of debt — emotional, philosophical, financial, political, and how this sense of indebted arises.

In the first chapters of the book, Graeber demonstrates that debt is a human experience. Cultures around the world have notions of debt — with varied legal and moral associations. In some contexts, a debt might be friendly, like the way an American might use the phrase "I owe you one" for a favor. In others, it is spiritual, like a karmic debt. Most often today, it is a political–economic idea — a mortgage, a payday loan, rental arrears, the national debt.

Graeber draws history in the shape of a long curve with two undulations. History knows periods of bullion money (which is backed by precious metals) and virtual money (which is backed by social promises). The periods of bullion money are periods of social flourishing and warfare. Bullion and war go together because rulers use war to plunder treasures, and then use those treasure to finance wars, pumping money into their own citizenry.

The first period of virtual money was the Axial Age from 800 BC to 600 AD, corresponding to the heights of ancient Chinese, Indian, and Greek civilization. The growing wealth and complex mechanisms of state drove a rise in abstract forms of thinking, fueling scholarship and philosophy. It was in the middle of the 500s BC that Pythagorus, the Buddha, and Confucius were all alive. The Axial Age also sees the rise of coinage — a money supply for citizens to exchange in markets and pay taxes.

The end of the Axial Age sees a decline in the money supply and a return to virtual money — systems of social credit and bartering. This is the Middle Ages, which lasts from 600 to 1450 AD.

The Middle Ages end with the Capitalist Age, which starts around 1450. Graeber puts the end of this age in 1971, with the end of the gold standard. I'm less certain about that, so I'll leave it aside for now.

In order to understand why we use money, we need to understand what money really is. Graeber uses the parable of a system of IOUs.

Imagine if Jack gave Jill his apple, and Jill gave him an IOU for one apple. Jack could redeem that IOU with Jill; but, if he's creative, he could also trade it with someone else. If Jill keeps issuing IOUs, they could turn into a system of currency. This will work for as long as Jill keeps a stockpile of apples, or else for as long as no one tries to trade in their IOUs.

This situation actually happened in my eighth-grade class. An unusually brilliant classmate named Edward invented a system that he called "The Economy." Edward was a great illustrator, so he drew banknotes with elaborate illustrations and details. Then he traded the banknotes or gave them away. He wanted to create a real economic system in the classroom. Why? I don't know. Maybe it was a social experiment. Maybe it was a power play. In any case, it worked. Students quickly started using the currency to trade with one another for food and favors and school supplies. Like in ancient Eurasia, the money supply eventually dwindled and the currency fell out of usage.

But this is remarkably similar to how a state creates currency. In 1694, a consortium of English bankers loaned £1,200,000 to the King of England. In exchange, the king gave them a contract to distribute royal banknotes, for which the bankers were allowed to charge interest. The king used the money to pay for war with France. Meanwhile, the bankers charged 8% interest to the king and another 8% to the subjects who borrowed the banknotes. In theory, the bankers could have collected all of the banknotes, returned them to the king, and asked for their money back — but they never did. It was that loan that constituted the Bank of England, which remains the backbone of the British economy to this day.

The same way my friend Edward created an economy in our classroom, the state creates a national economy by distributing currency. Then, the state imposes taxes on that economy to siphon off revenue. The taxes fund the royal coffers, but — more importantly — they also propel the economy. In order to pay taxes, citizens need royal currency, which means they must participate in the market economy. Now, if a king wants to raise an army, he can simply offer to pay soldiers in the currency that he has invented, distributed via merchants, and collected in the form of taxes. The soldiers will come to work to earn money to pay their own taxes. Writes Graeber:

If one simply hands out coins to the soldiers and then demands that every family in the kingdom was obliged to pay one of those coins back to you, one would, in one blow, turn one's entire national economy into a vast machine for the provisioning of soldiers, since now every family, in order to get their hands on the coins, must find some way to contribute to the general effort to provide soldiers with things they want. Markets are brought into existence as a side effect. This is a bit of a cartoon version, but it is very clear that markets did spring up around ancient armies... The cre­ation of markets of this sort was not just convenient for feeding sol­diers, but useful in all sorts of ways, since it meant officials no longer had to requisition everything they needed directly from the populace, or figure out a way to produce it on royal estates or royal workshops.

The great economist John Maynard Keynes said that money is a creature of state. While the state didn't invent money, only a state can turn money into the lifeblood of a society.

The King of England created his bank as the economy of England was proceeding through a dramatic transition — the transition from medieval feudalism to the modern capitalism we know and love today. What caused that transition?

The Middle Ages was not the period of squalor and dogma we picture today. It was a relatively peaceful time of contemplative philosophy. This began to change in the High Middle Ages, from 1000–1300, which corresponds with a period of climatic warming (see my writeup of The Little Ice Age). This was the heyday of feudalism, but also a period of economic growth. While feudal serfs couldn't borrow money, there was a growing free peasantry who could. (England was virtually all countryside at this point.) The time also saw a rise in commercial farming and craft guilds, "which finally brought Western Europe to a level of economic activity comparable to that long since considered normal in other parts of the world."

At this point, Western Europe is dominated by a culture of honor. The idea of "chivalry" — based on the image of King Arthur and his knights — the upper-class fashion of the time.

King Arthur is said to have lived at the end of the Axial Age, during the 500s AD, in the waning days of the Roman Empire. According to myth, he was a Roman–British king who fought off Anglo-Saxon invaders from continental Europe. Ultimately, the Anglo-Saxons would eventually succeed in their conquest. Whether or not Arthur was a real person, his myth survived in folk history for centuries, until it was revived more than five centuries later by writers in the High Middle Ages.

The legend of Arthur gained popularity at a time of incredible prosperity for the nobility of Western Europe. This created a large class of wealthy, idle nobles who were prone to creating trouble. While the eldest legitimate son of a noble would inherit his father's wealth, title, and obligations, any younger or bastard sons had to make their fortunes otherwise, and so they often became freelance warriors — knights.

Many became little more than roving bands of thugs, in an endless pursuit of plunder—precisely the sort of people who made merchants' lives so dangerous. Culminating in the twelfth century, there was a concerted effort to bring this dangerous population under the control of the civil authorities: not only the code of chivalry, but the tournament, the joust—all these were more than anything else ways of keeping them out of trouble, as it were, in part by setting knights against each other, in part by turning their entire existence into a kind of stylized ritual.

The gallant knight was actually a spoiled rich kid. So how did the knights earn their mythical status?

The knights relied heavily on merchants to furnish their lifestyles — from supplying their festivals to financing their quests. But, excluded from nobility, the merchants could never earn the prestige of knighthood for themselves. So, instead, they profited off of the knights, making good business out off the knighthood-industrial complex, occasionally seizing and liquidating the knight's assets when he defaults after their frequent failed schemes, spending sprees, and gambling losses.

While the knights performed an image of splendor at home, the merchants travelled abroad on trade missions. Eventually, the authors of the time combined the image of the knight and the merchant into the image of the adventuring knight, "wandering the forests of a mythic Albion, challenging rivals, confronting ogres, fairies, wizards, and mys­terious beasts."

Poets popularized the folk legends of Lancelot and Gawain. The story Yvain, the Knight of the Lion, written in 1180, is recognized as perhaps the first novel — or at least a major precursor to the novel. These stories popularized the idea of the adventurous knight undertaking dangerous quests in the spirit of honor — at a time when actual knights embodied a very different spirit. Graeber points out that even the myth of the Grail represented a new genre of fixation for medieval Europeans. It was not a concrete treasure. It was an abstract idea:

Richard Wagner, composer of the opera Parzifal, first suggested that the Grail was a sym­bol inspired by the new forms of finance. Where earlier epic heroes sought after, and fought over, piles of real, concrete gold and silver­... these new ones, born of the new commercial economy, pursued purely abstract forms of value. No one, after all, knew precisely what the Grail was. Even the epics disagree: sometimes it's a plate, sometimes a cup, sometimes a stone. (Wolfram von Eschen­bach imagined it to be a jewel knocked from Lucifer's helmet in a bat­tle at the dawn of time.) In a way it doesn't matter. The point is that it's invisible, intangible, but at the same time of infinite, inexhaustible value, containing everything, capable of making the wasteland flower, feeding the world, providing spiritual sustenance, and healing wounded bodies. Marc Shell even suggested that it would best be conceived as a blank check, the ultimate financial abstraction.

In 1250, at the height of this new commercial moment, the Pope legitimated the concept of a corporation as a legal fiction — a body comprised of many people. Monasteries, universities, municipalities, and guilds could be considered individual entities that could own property, make decisions, and be governed by the state — a new innovation in abstract thought that would create the mechanism for a commercial explosion in later centuries.

At the end of the 1200s, Western Europe has immense wealth, abstract financial and commercial concepts, and a spoiled nobility mythologized as a warrior class. No one anticipated the forthcoming disaster.

The 1300s was perhaps the worst century in human history. Environmental conditions drove recurring surges of famine, disaster, and disease. A famine starting in 1315 killed millions. A bovine pestilence killed up to 50% of cattle in some areas. The Hundred Years war, starting in 1337, killed millions more and inspired France to implement permanent taxation to fund the first standing army in Western Europe. Then the first outbreak of the Black Plague struck in 1346, killing perhaps half of the population of Europe. In the course of a few decades, one of the greatest periods of prosperity in European history turned into one of the most nightmarish periods in the history of the world.

For the preceding three centuries, the population of Europe had been growing quickly. Now, Europe fell into a period of demographic stagnation, which wouldn't start to recover for more than a century.

At the same time, the catastrophe reduced inequality. Wealth of the dominant class was washed away. Peasants inherited land from dead relatives and the labor shortage drove wages up.

The state reacted by freezing wages and tried to enforce serfdom, provoking peasant rebellions. While the uprisings failed, governments nonetheless made concessions, and wealth flowed into the working class, who used their newfound wealth to buy luxury goods and hold evermore feast days. "The fifteenth century is, in fact, considered the heydey of Medieval festive life, with its floats and dragons, maypoles and church ales, its Abbots of Unreason and Lords of Misrule."

At this point, peasants still operated in a virtual economy. For ordinary people, trust — not coins — served as the medium of exchange. Through the 1600s, communities would keep track of trades through systems of promises. Every six or twelve months, communities would come together for a public "reckoning," where they would weigh all of their debts to cancel everything out and then settle the remaining differences with coins or goods. In this system, "everyone was both creditor and debtor."

Villagers often managed their natural resources — farm fields, streams, and forests — collectively. And, when they engaged in market exchange, it was based on these communal systems of trust and cooperation. Even lending could be a respected vocation in a community, often left to widows with no other source of income or neighbors with surplus coin.

This might be the most important point in Graeber's book. In early England, finance was an organic system based on cooperation.

In this world, trust was everything. Most money literally was trust, since most credit arrangements were handshake deals. When people used the word "credit," they referred above all to a reputation for honesty and integrity; and a man or woman's honor, virtue, and respectability, but also, reputation for generosity, decency, and good-natured sociability, were at least as important considerations when deciding whether to make a loan as were assessments of net income. As a result, financial terms became indistinguishable from moral ones. One could speak of others as "worthies," as "a woman of high estimation" or "a man of no account," and equally of "giving credit" to someone's words when one believes what they say ("credit" is from the same root as "creed" or "credibility") , or of "extending credit" to them, when one takes them at their word that they will pay one back... For most English villagers, the real font and focus of social and moral life was not so much the church as the local ale-house—and community was embodied above all in the conviviality of popular festivals like Christmas or May Day, with everything that such celebrations entailed: the sharing of pleasures, the communion of the senses, all the physical embodiment of what was called "good neighborhood."

Cash was mostly reserved for strangers, rents, taxes, and tithes — interactions with no sense of trust.

The landed gentry and wealthy merchants, who eschewed handshake deals, would often use cash with one another, especially to pay off bills of exchange drawn on London markets.

The most important function of bullion currency was to allow the government to purchase arms and pay soldiers — or else by criminals to fund their enterprises. This created a sense that cash was a cold, antisocial technology.

Coins were most likely to be used both by the sort of people who ran the legal system... and by those violent elements of society they saw it as their business to control... Over time, this led to an increasing disjuncture of moral universes. For most, who tried to avoid entanglement in the legal system just as much as they tried to avoid the affairs of soldiers and criminals, debt remained the very fabric of sociability. But those who spent their work ing lives within the halls of government and great commercial houses gradually began to develop a very different perspective, whereby cash exchange was normal and it was debt that came to be seen as tinged with criminality.

For ordinary people, debts were normal agreements between neighbors: "all moral relations came to be conceived as debts," explains Graeber. But for bureaucrats and nobles, debts were seen in the modern sense — as risky liabilities. This was the tip of the wedge that would introduce the early logic of capitalism into daily life.

If this was a period of relative prosperity for the peasantry, then why do we remember the Middle Ages as a time of poverty and darkness. This is an idea that was advanced during the French Enlightenment, and it was largely based on a particular view of the time — the experience of the nobility. For the wealthy, this was a period of existential stress and profound anxiety. Artworks of the time depict mortality and death. Poetry discusses deep depression and sadness. According to the historian Johan Huizinga, it would have been rather gauche for a noble of the time to express optimism.

In this climate, we begin to see a new philosophy emerge: a philosophy that regards people as selfish and untrustworthy. In 1524, Martin Luther wrote "The world needs a strict, hard, temporal government that will compel and constrain the wicked not to rob and to return what they borrow." This flies in the face of ordinary village life, where such disputes would have been settled in the community. Luther is instead arguing that the state must settle such scores, "in order that the world not become a desert, peace may not perish, and trade and society not be utterly destroyed... Let no one think that the world can be ruled without blood; the sword of the ruler must be red and bloody; for the world will and must be evil, and the sword is God's rod and vengeance upon it."

Luther is describing a morality that isn't based on human interactions. Rather, it's based on business interactions, calling for a government that will use violence to compel people to return what they borrow so that trade will not be destroyed.

A century later, in 1624, Francis Bacon wrote his philosophical justifications for "public revenge" — violence by the state against mischievous persons, such as witches. And, a quarter-century later, in 1651, Bacon's mentee, Thomas Hobbes, published his masterwork on political science, Leviathan, in which he argued that people are fundamentally selfish and so the government must compel them to act responsibly. Hobbes took a radically pessimistic view, arguing that humans are basically self-interested machines who only cooperate if they believe it is in their long-term interest to do so, famously writing that human life in nature is "solitary, poor, nasty, brutish, and short."

The subject of money-lending was a contentious point in Western Europe. The de-facto stance of the church was that it was unethical. Philosophers debated the point in great depth. In this context, scholars rediscovered the ancient Roman idea of interesse: the compensation of loss for late payment. Extending that idea, philosophers surmised that it's reasonable to charge a fee for the profit lost on a loan that could have been invested elsewhere.

To make his case, Hobbes picked up the relatively new idea of interesse, using the mathematical term to lend a sense of scientific authority to his theory. But the roots of Hobbes theory — that humans are self-interested — actually comes from the bourgeois religious idea that we are all primordially sinners, and that without intervention we will all encumber ourselves evermore with the debt of sin. Hobbes imagined a world of endless desire and, therefore, endless competition, "which in turn is why, as Hobbes insisted, our only hope of social peace lies in contractual arrangements and strict enforcement by the apparatus of the state."

To Hobbes' contemporaries, these ideas may have seemed cynical and foreign. But over the coming centuries they would establish deep roots in the English psyche. A century and a quarter later, in 1776, Adam Smith would formalize the capitalist logic of self-interest in his magnum opus, The Wealth of Nations, enshrining cold self-interest as a moral ideal.

Graeber ties his case together:

The story of the origin of capitalism, then, is not the story of the gradual destruction of traditional communities by the impersonal power of the market. It is, rather, the story of how an economy of credit was converted into an economy of interest; of the gradual transformation of moral networks by the intrusion of the impersonal—and often vindictive—power of the state.

The integration of the new capitalist logic into working class English life was not remotely natural or peaceful. The English government invented draconian measures to safeguard the emerging capitalist economy by criminalizing poverty, unemployment, debt delinquency, breach of contract, and bankruptcy. "Under Elizabeth, for example, the punishment for vagrancy (unemployment) was, for first offense, to have one's ears nailed to a pillory; for repeat offenders, death." This was "the criminalization of the very basis of human society," writes Graeber.

It cannot be overemphasized that in a small community, everyone normally was both lender and borrower. One can only imagine the tensions and temptations that must have existed in a communities—and communities, much though they are based on love, in fact, because they are based on love, will always also be full of hatred, rivalry and passion—when it became clear that with sufficiently clever scheming, manipulation, and perhaps a bit of strategic bribery, they could arrange to have almost anyone they hated imprisoned or even hanged... The effects on communal solidarity must have been devastating. The sudden accessibility of violence really did threaten to transform what had been the essence of sociality into a war of all against all. It's not surprising then, that by the eighteenth century, the very notion of personal credit had acquired a bad name, with both lenders and borrowers considered equally suspect. The use of coins—at least among those who had access to them-had come to seem moral in itself.

Peasant life had fundamentally shifted, but it would take an era-defining turn of event to really propel capitalism.

In the crises at the end of the Middle Ages, Western rulers had lost their access to the Orient — an important source of luxury goods. Now they turned to their new class of knightly merchants for their enrichment:

The ground was only really prepared for capitalism in the familiar sense of the term when the merchants began to organize themselves into eternal bodies as a way to win monopolies, legal or de facto, and avoid the ordinary risks of trade. An excellent case in point was the Society of Merchant Adventurers, charted by King Henry IV in London in 1407, who, despite the romantic-sounding name, were mainly in the business of buying up British woolens and selling them in the Flanders fairs. They were not a modern joint-stock company, but a rather old-fashioned Medieval merchant guild, but they provided a structure whereby older, more substantial merchants could simply provide loans to younger ones, and they managed to secure enough of an exclusive control over the woolen trade that substantial profits were pretty much guaranteed. When such companies began to engage in armed ventures overseas, though, a new era of human history might be said to have begun.

The "merchant adventurer" was the businessman who undertook risky voyages abroad in search of commercial opportunity. In a way, this was the seminal capitalist: the pairing of a "gambler, willing to take any risk" with the "careful financier, whose entire operations are organized around producing steady, mathematical, inexorable growth of income, lies at the the very heart of what we now call 'capitalism.'"

In 1488, European explorers found their new route to Asia around the southern tip of Africa. And then, in 1492, they found their Holy Grail: the New World.

To be clear, Columbus did not discover the New World. Not only were their people already there; not only had Asian explorers likely already crossed the Pacific; but a good number of Europeans had already been there. The Vikings had famously established settlements, and the North American fisheries were an open secret among Basque fishermen. What was new then was not the discovery of a place (who really cares about new a place, anyway; at this point in history, Europe is seriously under-populated and new land isn't that important); it was the discovery of an economic opportunity. This was, after all, the nascent age of conquest.

The early expeditions to the Americas were largely projects seeking to find the precious metals to pay for themselves. But, quickly, they became profitable. The new supply of metals caused a glut of silver across Europe, driving inflation. Following the end of the Black Plague in the 1350, English villages had enjoyed an era of mild reprieve, with relative freedom and prosperity. That period had ended by the 1500s, starting with massive inflation. Between 1500 and 1650, real wages fell by more than half across Europe.

Despite the massive supply of metals, the average peasant remained cash poor. Merchants traded their gold and silver directly to the Far East for cash goods, maintaining a tight money supply back home. The lack of coins in Europe was a huge benefit to the ruling class. Despite inflation, they garnered a massive advantage in terms of purchasing power with their new wealth. When the rulers levied taxes in the inflated currency, the peasants could barely afford to pay them.

Despite the massive influx of metal from the Americas, most families were so low on cash that they were regularly reduced to melting down the family silver to pay their taxes. This was because taxes had to be paid in metal. Everyday business in contrast continued to be transacted much as it had in the Middle Ages, by means of various forms of virtual credit money: tallies, promissory notes, or, within smaller communities, simply by keeping track of who owed what to whom. What really caused the inflation is that those who ended up in control of the bullion—governments, bankers, large-scale merchants—were able to use that control to begin changing the rules, first by insisting that gold and silver were money, and second by introducing new forms of credit-money for their own use while slowly undermining and destroying the local systems of trust that had allowed small-scale communities across Europe to operate largely without the use of metal currency.

The balance of power shifted back to the nobles.

The ruling classes responded to the economic contraction with opportunism. They launched the era of enclosures — surrounding collectively-managed fields with stone walls to declare them as private property. The first major peasant rebellion took place in 1381, launching an endless era of endemic revolt. European governments responded with ruthless suppression. As mentioned earlier, France implemented its first permanent tax to fund Europe's first standing army, creating the economic circulation described by Graeber at the start of the book: taxes fund war, soldiers pay taxes.

This is the true end of the Middle Ages, at the moment when the governments of Europe found their fortune and enforced their newly-created ethic of self-interest.

Until this point, hoarding money had been seen as unethical. Money is a tool of exchange. Hoarding it is like "kidnapping a postman." What's the point?

This is the turning point (and differentiator) between ordinary market economics and capitalism:

While markets are ways of exchanging goods through the medium of money—historically, ways for those with a sur­plus of grain to acquire candles and vice versa—capitalism is first and foremost the art of using money to get more money. Normally, the easiest way to do this is by establishing some kind of formal or de facto monopoly. For this reason, capitalists, whether mer­chant princes, financiers, or industrialists, invariably try to ally them­ selves with political authorities to limit the freedom of the market, so as to make it easier for them to do so.

This is the switch between using money as a medium between commodities (abbreviated C–M–C) and using commodities as a medium between money (abbreviated M–C–M). In this system, money is power. Money is the goal. Money becomes the imperative.

Under the newly emerging capitalist order, the logic of money was granted autonomy; political and military power were then gradually reorganized around it... All of this helps explain why the Church had been so uncompromising in its attitude toward usury. It was not just a philosophical question; it was a matter of moral rivalry. Money always has the potential to become a moral imperative unto itself. Allow it to expand, and it can quickly become a morality so imperative that all others seem frivolous in comparison. For the debtor, the world is reduced to a collection of potential dangers, potential tools, and potential merchandise. Even human relations become a matter of cost-benefit calculation.

In the end, this is what happened: we reframed human relations as financial interactions, and the financial aspect supersedes the social one, and subsumed all relations to the will of capital — a new abstract entity with a will of its own. And that will is to grow in perpetuity. "Capitalism is a system that demands constant, endless growth. Enterprises have to grow in order to remain viable."

We have heard a myth that capitalism is a system of free markets. This notion falls apart immediately under scrutiny. Surely a medieval English village could be considered a free market, yet we would never call it capitalist because it orients itself toward communal enterprise, which capitalism abhors.

More importantly, capitalism clashes with freedom at every step. First, capitalism was built on the backs of workers in bondage — serfs, slaves, servants, children, sweatshop workers, debt peons, prisoners. Marxists argue that even wage labor isn't truly free — whether in a factory or at a office desk — "someone with nothing to sell but his or her body cannot in any sense be considered a genuinely free agent." A true free laborer would be an entrepreneur or a contractor who is free to sell their skills to the highest bidder on any given day. But that livelihood was erased through market force and government intervention in the industrial revolution. Self-employed artisans who protested factory automation were gunned down in the streets by government forces. Under capitalism, workers found themselves stuck in perpetual wage labor, virtually indentured to industrial barons. These forms of disenfranchised labor — from slavery to wage labor — fit cleanly with Hobbes' moral worldview of self-interest; they are based on governance by an impersonal, distrusting, centralized lord, rather than relationships based on mutual respect and trust between professionals of relatively equal standing. Second, Capitalism grew by misappropriating the land of entire continents (including Europe itself). And third, capitalism relies on systems of violence — police, prisons, and military — to remain secure and profitable.

If we imagine a bird as an emblem of freedom, then capitalism is much more akin to a cage in a house where the bird is told when to fly and lives under the watchful eye of a hungry cat.

What we see at the dawn of modern capitalism is a gigantic financial apparatus of credit and debt that operates—in practical effect—to pump more and more labor out of just about everyone with whom it comes into contact, and as a result produces an endlessly expanding volume of material goods. It does so not just by moral compulsion, but above all by using moral compulsion to mobilize sheer physical force.

At the end of this chapter, we have come into the industrial revolution. Capitalism is in full force, and Europe is — for the first time in history — approaching a standard of living that had been normal in China for millennia. Europe has abolished the slave trade after enslaving tens of millions of Africans, millions of whom died on the passage across the Atlantic. European conquests have killed millions of indigenous people in Oceania and the Americas and stolen their land. Having invented industrial warfare, the European rulers are preparing to invent industrial genocide. This is the culture of self-interest — a fine one imposes upon oneself for late payment of a debt to no one.

Curiously, capitalism has always embodied an unsettling contradiction: how can a system grow forever? Any capitalist will say that this is essential to capitalism. Graeber argues: they didn't expect it to grow forever; they expected it to self-destruct.

Almost none of the great theorists of capitalism, from anywhere on the political spectrum... felt that capitalism was likely to be around for more than another generation or two at the most... the moment that the fear of imminent social revolution no longer seemed plausible, by the end of World War II, we were immediately presented with the specter of nuclear holocaust. Then, when that no longer seemed plausible, we discovered global warming. This is not to say that these threats were not, and are not, real. Yet it does seem strange that capitalism feels the constant need to imagine, or to actually manufacture, the means of its own imminent extinction... Presented with the prospect of its own eternity, capitalism—or anyway, financial capitalism—simply explodes.

The success of capitalism rests on a secret premise that it will inevitably bring about its own end—the ultimate reckoning of debts. And those generations of capitalists who have already departed will leave the rest of us to foot the bill.