A couple of months ago BBC Radio 4 put out a great series of short episodes on the history of debt. Noted anthropologist and anarchist, David Graeber, narrated the series and went through the definition of debt, its historical development, and basically analyzed why we put so much emphasis on following through on our debt obligations.
In the very first episode of the series, he made a great point when he asked why we feel that debt is a social contract that must never be broken. He points out that politicians make social contracts with the citizens who vote for them and those always get broken, so what makes debt a social contract that must never be broken? Surely we don’t feel that the relationship between debtor and creditor is more important than the relationship between the people and their government, do we? I bet if that were a question polled to the majority of people in the United States or even around the world, the answer would be a resounding “No!”
So why do we value the principle of debt more than we value the principle of something like governance?
The answer largely comes down to power and where it is centered within the structure of society. In both instances these social contracts are skewed so that the ruling class is the one with the favorable outcome. In the example of debt, the creditor is in power because they have the influence of money and bureaucracy behind them. And in the example of the governing relationship, the politician has power for essentially the same reasons. You can try operating outside of both social relationships, but you won’t get far. If you want to live any sort of life that is considered “normal” by societal standards, you have to go through a bank in order to get a loan. You need a loan to buy a car for transportation, you need a loan to buy a house, you need a loan to go to college. The list goes on and on.
There is a similar issue with government. You can decide not to vote for a party candidate, but the political machine will go on without you. You will still be expected to obey the laws and regulations of the government no matter whether you voted for the person in office or not. If they pass a law that you happen to not agree with, it doesn’t matter because you still have to follow it. You can protest and not follow the law, but then you have to face the consequences of monetary fines or a jail sentence. You can go totally extreme and quit society to live in the wilderness, and I guess you could succeed at escaping this relationship in this instance. But you would also succeed in isolating yourself from anyone and everyone you care about. So that’s not an ideal choice, either.
The point of these mental exercises is to demonstrate that social contracts tend to be skewed in favor of the party with more power. Which is interesting because we tend to view social contracts as sacred and moral bonds that keep society running, but we rarely analyze the power structure of these relationships. And here is where G.W.F. Hegel finally comes in. His famous idea of the master-slave dialectic can shine some much-needed light on the relationship of debtor and creditor.
For those unfamiliar with Hegel, a short summary of this idea is that in every society there are relationships between those we can categorize as the “master” and those that we can categorize as the “slave.” Basically, at the beginning of this relationship, a figurative fight to the death ensues between two beings. One of those beings will prove victorious and be left with two options: 1) Kill the being it just demonstrated power over; or 2) Allow them to live with the agreement that they will serve as the slave of the more powerful being. Hegel sees this as a dialectic relationship of recognition. The master recognizes the other being as a slave in return for the slave recognizing the other being as their master. This relationship is at the heart of society, according to Hegel, and it is one of domination and subordination.
Hegel argued that this relationship was inherently unstable, however. After a period of time, the master starts to get fat and lazy because the slave does everything for them. Meanwhile, the slave starts to figure out that they are doing everything for the master and they recognize that this makes them very powerful. This poses a problem for the master after a while because once the slave realizes that what Hegel called the geist or spirit lies within them and not their master, they rise up and over throw the master. This becomes an endless cycle, in which the previous slave becomes the new master and then enslaves the former master. This unstable relationship goes on infinitely. But there is a way to make the master’s reign of power last longer.
Hegel argued that masters convince their subjects that they are God or have been chosen by God to lead in order to make this relationship more stable. No longer does the slave feel as if they are obeying the master, but they are really obeying God. This makes being dominated and subordinated by the master morally good. It is moral to follow and obey God. The slaves will even go out of their way to demonstrate to other slaves that they are more moral by the way they serve their master. And the longer the slave believes this false consciousness, this ideology, the longer the relationship is able to go on.
Tying Hegel into debt may not make total sense at this point, but it really is a fairly simple connection. As David Graeber mentioned in the BBC series, paying back the debt we owe is seen as the morally right thing to do. In order to be a pious religious follower, a model citizen, or even just a good role model for those that look up to you, any debt that you accrue should be paid back. If you refuse to pay the debt or somehow become unable to repay your debt, there is a severe stigma attached to you. Sure, you can file bankruptcy (for everything except for student loans), but there is a figurative scarlet letter that will be embroidered on you if you do so. Not only will your credit score be terrible, affecting your ability to borrow money in the future, but family and friends will know that you are a moral failure too. You were unable to successfully provide for and take care of your family. And, just like the slaves from the last paragraph, your family and friends will demonstrate their moral superiority by not filing bankruptcy and making their monthly debt payments on time. Essentially, they will prove their moral superiority by demonstrating that they are not poor.
This idea that runs through society, that denigrates the poor and makes them feel like morally lesser people or like they are a sub-human species, is a notion that is pushed by the master class in power. There has to be some type of negative consequence attached to not paying back debt, otherwise nobody would ever pay it back; it would be free money. The ruling class pushes this narrative through what seems like the harmless idea of the American Dream. They tell us the United States is the land of meritocracy, where you can have anything you want if you just work hard enough. Deep down we know that it isn’t a meritocracy, and that those who are born rich tend to stay rich, while those who are born poor tend to stay poor. But we cannot outright express this opinion because of the fear that we may be lambasted as “lazy.” The idea of lazy and immoral poor people is pushed in outlets like the media all of the time. You can hear it when you listen to politicians rail against “welfare queens” or talk about society consisting of “the makers” and “the takers.” You can turn on the evening news and hear pundits speak of similar views. This ideology that sees the poor as morally inadequate and the rich as the ultimate model of morality is everywhere we turn.
And Ideology takes us back to the very beginning of this post. That initial agreement between the debtor and the creditor is always framed as a business transaction between two equals. That is how your standard economist paints all transactions within capitalism, as if they take place in a vacuum between two individuals that are equal in stature and power. But we know that’s not true because outside of that model, the world contains other factors that make the transaction lopsided. If someone were to get a loan from an equal, there is largely nothing to enforce the repayment of that loan. And if you were to get a loan from a friend and you weren’t able to pay it back on time, they wouldn’t be able to force you to sell your belongings or drive you into abject poverty. They could threaten to sue you and it could ruin the friendship, but they may not have the money or time to dedicate to a lawsuit and they may not find it worth their time. They largely have little power over you. But, in the case of a bank, they will send collectors and possibly repo men, and if they need to they can take you to court and the cost of court fees is nothing to them. This is not an equal relationship, and we know it’s not. But that is how it is portrayed anyway.
This is ideology at its purest. And paraphrasing from Slavoj Žižek, the most dangerous thing about ideology is that deep down we know what’s going on, but we still follow blindly anyway. This ideology of morality that is spun by the banks and politicians (paid on behalf of the banks) is the reason we view debt in the light that we view it. But below the surface we know that the system is corrupt and that wages have failed to grow since the 1970s in order to allow our economy to grow through the increased indebtedness of the everyday citizen. Deep down we know that debt is really just an agreement that could be broken if needed. But the banks have not only put the legal enforcements in place to punish us if we break this contract, but they also use the shroud of ideology as another way to make us to obey and give them their money. Plus interest, of course.
If you believe Hegel, this relationship will likely fall one day, as all of these relationships tend to do. The key is to recognize that people have the ultimate power or the geist that Hegel writes of, and not the master, the ruling class, the banks, etc. When the ideology starts to fail and people start to become more conscious of the exploitative relationship of debt, when they understand that they are all in the same boat — especially in the current debt-laden type of capitalism that we live under today – that’s when the relationship will fall apart.
The main question then will be what comes next? A new relationship is always built out of the rubble of the old, and if it is just another master/slave relationship, then we are headed down a similar path all over again. These relationships tend to learn from the past ones, and the new forms of domination and subordination tend to be less obvious than they were previously. But the exploitation eventually becomes apparent over time and then the struggle ensues all over again.
In order to keep that from happening, we need to build a relationship that actually consists of equals and not one that just claims they are equal and does not treat them in this manner. Establishing this type of relationship is easier said than done, of course. But it can be done. Unfortunately, just because it should happen, that does not mean that it will happen. Because it hasn’t happened yet, and who really knows if it ever will.