Takeaways from finishing Debt: The First 5000 Years

I think he’s saying:

Indebtedness to something is a core human experience with shifts in who we pay tribute to

• To the gods
• To each other
• To ourselves

As a healthy construct, it becomes a reason to live

• dedication
• duty
• honor

By today’s standards, we would call these personal freedoms at their core. Deciding what makes life worth living. Not a right or wrong dichotomy as much as a choice within a set of societal norms.

What’s happened over the last 5,000 years is the conversion of these natural tendencies toward personal indebtedness being abstracted away.

• debt converting to money makes it exchangeable in ways that remove the need for relationships
• The theory of economics itself explains finance as independent from human experience instead of a deeply human experience rooted in relationships
• neoliberal capitalism distances capitalism from human agency through “the market”

All while ignoring the rich history and modern facts of money

• Debt becomes debilitating. Harsh seasons lead to all farmers in debtor prisons. The next season people starve, then revolt.
• Debt becomes dependent on violence. Times of peace leave the army idle, which leads to debtor prisons. An active army can also pillage commodities, which helps maintain the concept of its empire’s money.
• when money was backed by gold, it always ran the risk of running out and collapsing the system that didn’t actually depend on it day to day
• but complete abstraction from hard commodity leads to the false sense of infinite resources and infinite room for debt

What this cycle forgot

• Money is never real. It’s a concept backed by an empire that represents a debt from that empire to the holder.
• Empires rarely pay their debts. Its IOUs at some point come to a question of enforcement. Who will make the empire pay? That’s another path that shows how the system depends on violence.
• Debt depends on cycles of reset. Since the very beginning of money, debt-like slavery follows it. At some tipping point, it leads to biblical-style Jubilee or violent uprisings.

In summary:

Debt is bond. At some point we collectively forgot it’s metaphysical, not epistemological. That’s a fancy way of saying it’s a belief about how to view reality, not reality itself.

For most of human history it has been a bond of purpose and meaning. Attempts by large scale empires to capitalize on this bond are hit or miss.

The contemporary belief in the permanence of debt is hollow. History is littered with proof of its emptiness and regular cycles of relearning the same truth, from Mesopotamia to today: debt has always been about human connection.

This book is brilliant.