Sep 12th 2011, 13:37 by The Economist online
Who are the world's biggest employers?
ONE of the biggest headaches for policymakers in many rich countries has been how to create jobs during a period of fiscal austerity and anaemic growth. The private sector has been slow to generate jobs, and government-spending cuts usually end up cutting jobs. And governments employ a lot of people: in our chart of the ten biggest global employers, below, seven are government-run. America's defence department had 3.2m people on its payroll last year, equivalent to 1% of the country's population. China, the world's most populous nation and a big military spender, employs 2.3m people in its armed forces. And the number of people working for the National Health Service in England is equivalent to over 2.5% of the country's population. The three private companies are Walmart, McDonald's and Taiwan's Hon Hai Precision Industry Company, a subsidiary of which is Foxconn, a secretive electronics manufacturer. Go to link above for more...
Saturday, September 17, 2011
he Muslim World Brings Forth a Counter-Jihad
Posted on Sep 15, 2011
By Lee Smith
“Rock the Casbah: Rage and Rebellion Across the Islamic World”
A book by Robin Wright
With the Arab Spring still unfolding, former Washington Post reporter Robin Wright’s latest book puts the popular uprisings that have swept the Arabic-speaking Middle East from North Africa and the Levant to the Persian Gulf littoral in the context of a larger movement: counter-jihad. Muslims around the world, she writes, are “increasingly rejecting extremism. The many forms of militancy—from the venomous Sunni creed of al-Qaida to the punitive Shiite theocracy in Iran—have proven costly, unproductive and ultimately unappealing.”
Rock the Casbah: Rage and Rebellion Across the Islamic World
By Robin Wright
Simon & Schuster, 320 pages
"In other words, Osama bin Laden’s efforts produced a result contrary to his intentions. After 9/11 dragged the United States into the Middle East in force, Muslims turned not toward extremism but moderation. According to Wright’s survey of the Muslim world, bin Laden’s message was dead long before the Navy SEALs brought him down in May. “Rock the Casbah,” then, is an introduction to the Muslim world 10 years after 9/11, and the author’s purpose is partly to illuminate and partly to instruct.
From Wright’s perspective,Americans’ view of Muslims and Islam hasn’t caught up to the reality. In spite of developments in the Middle East and elsewhere in the Muslim world, she argues, the past decade here in the United States was “shaped largely by fear of everything from a global clash of civilizations to a new neighborhood mosque.” more at link... above.
By Lee Smith
“Rock the Casbah: Rage and Rebellion Across the Islamic World”
A book by Robin Wright
With the Arab Spring still unfolding, former Washington Post reporter Robin Wright’s latest book puts the popular uprisings that have swept the Arabic-speaking Middle East from North Africa and the Levant to the Persian Gulf littoral in the context of a larger movement: counter-jihad. Muslims around the world, she writes, are “increasingly rejecting extremism. The many forms of militancy—from the venomous Sunni creed of al-Qaida to the punitive Shiite theocracy in Iran—have proven costly, unproductive and ultimately unappealing.”
Rock the Casbah: Rage and Rebellion Across the Islamic World
By Robin Wright
Simon & Schuster, 320 pages
"In other words, Osama bin Laden’s efforts produced a result contrary to his intentions. After 9/11 dragged the United States into the Middle East in force, Muslims turned not toward extremism but moderation. According to Wright’s survey of the Muslim world, bin Laden’s message was dead long before the Navy SEALs brought him down in May. “Rock the Casbah,” then, is an introduction to the Muslim world 10 years after 9/11, and the author’s purpose is partly to illuminate and partly to instruct.
From Wright’s perspective,Americans’ view of Muslims and Islam hasn’t caught up to the reality. In spite of developments in the Middle East and elsewhere in the Muslim world, she argues, the past decade here in the United States was “shaped largely by fear of everything from a global clash of civilizations to a new neighborhood mosque.” more at link... above.
Friday, September 16, 2011
Fairness Doctrine
"The Fairness Doctrine was a policy of the United States Federal Communications Commission (FCC), introduced in 1949, that required the holders of broadcast licenses to both present controversial issues of public importance and to do so in a manner that was, in the Commission's view, honest, equitable and balanced. The FCC decided to eliminate the Doctrine in 1987, and in August 2011 the FCC formally removed the language that implemented the Doctrine.[1]
The Fairness Doctrine had two basic elements: It required broadcasters to devote some of their airtime to discussing controversial matters of public interest, and to air contrasting views regarding those matters. Stations were given wide latitude as to how to provide contrasting views: It could be done through news segments, public affairs shows, or editorials. The doctrine did not require equal time for opposing views but required that contrasting viewpoints be presented.[2]
The main agenda for the doctrine was to ensure that viewers were exposed to a diversity of viewpoints. In 1969 the United States Supreme Court upheld the FCC's general right to enforce the Fairness Doctrine where channels were limited. But the courts did not rule that the FCC was obliged to do so.[3]. The courts reasoned that the scarcity of the broadcast spectrum, which limited the opportunity for access to the airwaves, created a need for the Doctrine. However, the proliferation of cable television, multiple channels within cable, public-access channels, and the Internet have eroded this argument, since there are plenty of places for ordinary individuals to make public comments on controversial issues at low or no cost.
The Fairness Doctrine should not be confused with the Equal Time rule. The Fairness Doctrine deals with discussion of controversial issues, while the Equal Time rule deals only with political candidates." more at link....
The Fairness Doctrine had two basic elements: It required broadcasters to devote some of their airtime to discussing controversial matters of public interest, and to air contrasting views regarding those matters. Stations were given wide latitude as to how to provide contrasting views: It could be done through news segments, public affairs shows, or editorials. The doctrine did not require equal time for opposing views but required that contrasting viewpoints be presented.[2]
The main agenda for the doctrine was to ensure that viewers were exposed to a diversity of viewpoints. In 1969 the United States Supreme Court upheld the FCC's general right to enforce the Fairness Doctrine where channels were limited. But the courts did not rule that the FCC was obliged to do so.[3]. The courts reasoned that the scarcity of the broadcast spectrum, which limited the opportunity for access to the airwaves, created a need for the Doctrine. However, the proliferation of cable television, multiple channels within cable, public-access channels, and the Internet have eroded this argument, since there are plenty of places for ordinary individuals to make public comments on controversial issues at low or no cost.
The Fairness Doctrine should not be confused with the Equal Time rule. The Fairness Doctrine deals with discussion of controversial issues, while the Equal Time rule deals only with political candidates." more at link....
Wednesday, September 14, 2011
WikiLeaks Swept up and away (oh my!)
"The release of all the leaked embassy cables marks both the end of WikiLeaks and the beginning of an era
Sep 10th 2011 | NEW YORK | from the print edition
IF CYBERSPACE had air, it would be thick with recriminations. Thanks to a series of slips compounded by warring whistle-blowing egos, an entire trove of 251,000 purloined American diplomatic cables has been published online. The result may be fatal for WikiLeaks, as well as embarrassingly revealing governments’ misdeeds, mishaps, evasions and cover-ups. One cable has allegations that American troops executed an Iraqi family, including five small children, in 2006. (The government in Baghdad has reopened an investigation.) Another questions the long-term safety of China’s nuclear-power plans. In a third, a Bulgarian minister admits to misleading environmentalists about legislation on genetically modified crops.
Previously released cables also featured unvarnished opinions. But the new lot include the names of people who talked to American officials. In countries like China that could bring nasty consequences. Even the most ardent advocates of open government would not defend the publication (also in the cables) of the private phone numbers of foreign leaders, such as the Queen of the Netherlands (a note adds that she speaks English well). WikiLeaks had earlier worked with media allies who edited out such sensitive details, though relations have now soured." More at link above....
Sep 10th 2011 | NEW YORK | from the print edition
IF CYBERSPACE had air, it would be thick with recriminations. Thanks to a series of slips compounded by warring whistle-blowing egos, an entire trove of 251,000 purloined American diplomatic cables has been published online. The result may be fatal for WikiLeaks, as well as embarrassingly revealing governments’ misdeeds, mishaps, evasions and cover-ups. One cable has allegations that American troops executed an Iraqi family, including five small children, in 2006. (The government in Baghdad has reopened an investigation.) Another questions the long-term safety of China’s nuclear-power plans. In a third, a Bulgarian minister admits to misleading environmentalists about legislation on genetically modified crops.
Previously released cables also featured unvarnished opinions. But the new lot include the names of people who talked to American officials. In countries like China that could bring nasty consequences. Even the most ardent advocates of open government would not defend the publication (also in the cables) of the private phone numbers of foreign leaders, such as the Queen of the Netherlands (a note adds that she speaks English well). WikiLeaks had earlier worked with media allies who edited out such sensitive details, though relations have now soured." More at link above....
Monday, September 5, 2011
Federal Courts Rule it is Not Illegal to Film Police
"The First Court of Appeals has reached a decision that would allow the general public to video-tape police officers while they are working. This decision comes right after several well-known public cases have come to light involving citizens being arrested for video-taping police.
This specific case in question was Simon Glik vs.The City of Boston (and several police officers), in which a teenage Simon Gilk was arrested after videotaping Boston Police abusing a homeless man. While Mr. Gilk was not interfering with the police, he was arrested on wiretapping charges.
The ACLU had sued on his behalf, even when the charges were dropped, noting that there was a growing epidemic of citizens in the United States being arrested by police for videotaping, even when documenting police brutality and abuse.
The First Court Agreed with the ACLU that this should be legal, and wrote that: "The filming of government officials engaged in their duties in a public place, including police officers performing their responsibilities, fits comfortably within these principles [of protected First Amendment activity].
Gathering information about government officials in a form that can readily be disseminated to others serves a cardinal First Amendment interest in protecting and promoting the free discussion of governmental affairs.”
More at link above...
This specific case in question was Simon Glik vs.The City of Boston (and several police officers), in which a teenage Simon Gilk was arrested after videotaping Boston Police abusing a homeless man. While Mr. Gilk was not interfering with the police, he was arrested on wiretapping charges.
The ACLU had sued on his behalf, even when the charges were dropped, noting that there was a growing epidemic of citizens in the United States being arrested by police for videotaping, even when documenting police brutality and abuse.
The First Court Agreed with the ACLU that this should be legal, and wrote that: "The filming of government officials engaged in their duties in a public place, including police officers performing their responsibilities, fits comfortably within these principles [of protected First Amendment activity].
Gathering information about government officials in a form that can readily be disseminated to others serves a cardinal First Amendment interest in protecting and promoting the free discussion of governmental affairs.”
More at link above...
Tuesday, August 30, 2011
What is Debt? – An Interview with Economic Anthropologist David Graeber
"Friday, August 26, 2011
David Graeber currently holds the position of Reader in Social Anthropology at Goldsmiths University London. Prior to this he was an associate professor of anthropology at Yale University. He is the author of ‘Debt: The First 5,000 Years’ which is available from Amazon.
Interview conducted by Philip Pilkington, a journalist and writer based in Dublin, Ireland.
Philip Pilkington: Let’s begin. Most economists claim that money was invented to replace the barter system. But you’ve found something quite different, am I correct?
David Graeber: Yes there’s a standard story we’re all taught, a ‘once upon a time’ — it’s a fairy tale.
It really deserves no other introduction: according to this theory all transactions were by barter. “Tell you what, I’ll give you twenty chickens for that cow.” Or three arrow-heads for that beaver pelt or what-have-you. This created inconveniences, because maybe your neighbor doesn’t need chickens right now, so you have to invent money.
The story goes back at least to Adam Smith and in its own way it’s the founding myth of economics. Now, I’m an anthropologist and we anthropologists have long known this is a myth simply because if there were places where everyday transactions took the form of: “I’ll give you twenty chickens for that cow,” we’d have found one or two by now. After all people have been looking since 1776, when the Wealth of Nations first came out. But if you think about it for just a second, it’s hardly surprising that we haven’t found anything.
Think about what they’re saying here – basically: that a bunch of Neolithic farmers in a village somewhere, or Native Americans or whatever, will be engaging in transactions only through the spot trade. So, if your neighbor doesn’t have what you want right now, no big deal. Obviously what would really happen, and this is what anthropologists observe when neighbors do engage in something like exchange with each other, if you want your neighbor’s cow, you’d say, “wow, nice cow” and he’d say “you like it? Take it!” – and now you owe him one. Quite often people don’t even engage in exchange at all – if they were real Iroquois or other Native Americans, for example, all such things would probably be allocated by women’s councils.
So the real question is not how does barter generate some sort of medium of exchange, that then becomes money, but rather, how does that broad sense of ‘I owe you one’ turn into a precise system of measurement – that is: money as a unit of account?
By the time the curtain goes up on the historical record in ancient Mesopotamia, around 3200 BC, it’s already happened. There’s an elaborate system of money of account and complex credit systems. (Money as medium of exchange or as a standardized circulating units of gold, silver, bronze or whatever, only comes much later.)
So really, rather than the standard story – first there’s barter, then money, then finally credit comes out of that – if anything its precisely the other way around. Credit and debt comes first, then coinage emerges thousands of years later and then, when you do find “I’ll give you twenty chickens for that cow” type of barter systems, it’s usually when there used to be cash markets, but for some reason – as in Russia, for example, in 1998 – the currency collapses or disappears.
PP: You say that by the time historical records start to be written in the Mesopotamia around 3200 BC a complex financial architecture is already in place. At the same time is society divided into classes of debtors and creditors? If not then when does this occur? And do you see this as the most fundamental class division in human history?
DG: Well historically, there seem to have been two possibilities.
One is what you found in Egypt: a strong centralized state and administration extracting taxes from everyone else. For most of Egyptian history they never developed the habit of lending money at interest. Presumably, they didn’t have to.
Mesopotamia was different because the state emerged unevenly and incompletely. At first there were giant bureaucratic temples, then also palace complexes, but they weren’t exactly governments and they didn’t extract direct taxes – these were considered appropriate only for conquered populations. Rather they were huge industrial complexes with their own land, flocks and factories. This is where money begins as a unit of account; it’s used for allocating resources within these complexes.
Interest-bearing loans, in turn, probably originated in deals between the administrators and merchants who carried, say, the woollen goods produced in temple factories (which in the very earliest period were at least partly charitable enterprises, homes for orphans, refugees or disabled people for instance) and traded them to faraway lands for metal, timber, or lapis lazuli. The first markets form on the fringes of these complexes and appear to operate largely on credit, using the temples’ units of account. But this gave the merchants and temple administrators and other well-off types the opportunity to make consumer loans to farmers, and then, if say the harvest was bad, everybody would start falling into debt-traps.
This was the great social evil of antiquity – families would have to start pawning off their flocks, fields and before long, their wives and children would be taken off into debt peonage. Often people would start abandoning the cities entirely, joining semi-nomadic bands, threatening to come back in force and overturn the existing order entirely. Rulers would regularly conclude the only way to prevent complete social breakdown was to declare a clean slate or ‘washing of the tablets,’ they’d cancel all consumer debt and just start over. In fact, the first recorded word for ‘freedom’ in any human language is the Sumerian amargi, a word for debt-freedom, and by extension freedom more generally, which literally means ‘return to mother,’ since when they declared a clean slate, all the debt peons would get to go home.
PP: You have noted in the book that debt is a moral concept long before it becomes an economic concept. You’ve also noted that it is a very ambivalent moral concept insofar as it can be both positive and negative. Could you please talk about this a little? Which aspect is more prominent?
DG: Well it tends to pivot radically back and forth.
One could tell the history like this: eventually the Egyptian approach (taxes) and Mesopotamian approach (usury) fuse together, people have to borrow to pay their taxes and debt becomes institutionalized.
Taxes are also key to creating the first markets that operate on cash, since coinage seems to be invented or at least widely popularized to pay soldiers – more or less simultaneously in China, India, and the Mediterranean, where governments find the easiest way to provision the troops is to issue them standard-issue bits of gold or silver and then demand everyone else in the kingdom give them one of those coins back again. Thus we find that the language of debt and the language of morality start to merge.
In Sanskrit, Hebrew, Aramaic, ‘debt,’ ‘guilt,’ and ‘sin’ are actually the same word. Much of the language of the great religious movements – reckoning, redemption, karmic accounting and the like – are drawn from the language of ancient finance. But that language is always found wanting and inadequate and twisted around into something completely different. It’s as if the great prophets and religious teachers had no choice but to start with that kind of language because it’s the language that existed at the time, but they only adopted it so as to turn it into its opposite: as a way of saying debts are not sacred, but forgiveness of debt, or the ability to wipe out debt, or to realize that debts aren’t real – these are the acts that are truly sacred.
How did this happen? Well, remember I said that the big question in the origins of money is how a sense of obligation – an ‘I owe you one’ – turns into something that can be precisely quantified? Well, the answer seems to be: when there is a potential for violence. If you give someone a pig and they give you a few chickens back you might think they’re a cheapskate, and mock them, but you’re unlikely to come up with a mathematical formula for exactly how cheap you think they are. If someone pokes out your eye in a fight, or kills your brother, that’s when you start saying, “traditional compensation is exactly twenty-seven heifers of the finest quality and if they’re not of the finest quality, this means war!”
Money, in the sense of exact equivalents, seems to emerge from situations like that, but also, war and plunder, the disposal of loot, slavery. In early Medieval Ireland, for example, slave-girls were the highest denomination of currency. And you could specify the exact value of everything in a typical house even though very few of those items were available for sale anywhere because they were used to pay fines or damages if someone broke them.
But once you understand that taxes and money largely begin with war it becomes easier to see what really happened. After all, every Mafiosi understands this. If you want to take a relation of violent extortion, sheer power, and turn it into something moral, and most of all, make it seem like the victims are to blame, you turn it into a relation of debt. “You owe me, but I’ll cut you a break for now…” Most human beings in history have probably been told this by their debtors. And the crucial thing is: what possible reply can you make but, “wait a minute, who owes what to who here?” And of course for thousands of years, that’s what the victims have said, but the moment you do, you are using the rulers’ language, you’re admitting that debt and morality really are the same thing. That’s the situation the religious thinkers were stuck with, so they started with the language of debt, and then they tried to turn it around and make it into something else.
PP: You’d be forgiven for thinking this was all very Nietzschean. In his ‘On the Genealogy of Morals’ the German philosopher Friedrich Nietzsche famously argued that all morality was founded upon the extraction of debt under the threat of violence. The sense of obligation instilled in the debtor was, for Nietzsche, the origin of civilisation itself. You’ve been studying how morality and debt intertwine in great detail. How does Nietzsche’s argument look after over 100 years? And which do you see as primal: morality or debt?
DG: Well, to be honest, I’ve never been sure if Nietzsche was really serious in that passage or whether the whole argument is a way of annoying his bourgeois audience; a way of pointing out that if you start from existing bourgeois premises about human nature you logically end up in just the place that would make most of that audience most uncomfortable.
In fact, Nietzsche begins his argument from exactly the same place as Adam Smith: human beings are rational. But rational here means calculation, exchange and hence, trucking and bartering; buying and selling is then the first expression of human thought and is prior to any sort of social relations.
But then he reveals exactly why Adam Smith had to pretend that Neolithic villagers would be making transactions through the spot trade. Because if we have no prior moral relations with each other, and morality just emerges from exchange, then ongoing social relations between two people will only exist if the exchange is incomplete – if someone hasn’t paid up.
But in that case, one of the parties is a criminal, a deadbeat and justice would have to begin with the vindictive punishment of such deadbeats. Thus he says all those law codes where it says ‘twenty heifers for a gouged-out eye’ – really, originally, it was the other way around. If you owe someone twenty heifers and don’t pay they gouge out your eye. Morality begins with Shylock’s pound of flesh.
Needless to say there’s zero evidence for any of this – Nietzsche just completely made it up. The question is whether even he believed it. Maybe I’m an optimist, but I prefer to think he didn’t.
Anyway it only makes sense if you assume those premises; that all human interaction is exchange, and therefore, all ongoing relations are debts. This flies in the face of everything we actually know or experience of human life. But once you start thinking that the market is the model for all human behavior, that’s where you end up with.
If however you ditch the whole myth of barter, and start with a community where people do have prior moral relations, and then ask, how do those moral relations come to be framed as ‘debts’ – that is, as something precisely quantified, impersonal, and therefore, transferrable – well, that’s an entirely different question. In that case, yes, you do have to start with the role of violence.
PP: Interesting. Perhaps this is a good place to ask you about how you conceive your work on debt in relation to the great French anthropologist Marcel Mauss’ classic work on gift exchange.
DG: Oh, in my own way I think of myself as working very much in the Maussian tradition. Mauss was one of the first anthropologists to ask: well, all right, if not barter, then what? What do people who don’t use money actually do when things change hands? Anthropologists had documented an endless variety of such economic systems, but hadn’t really worked out common principles. What Mauss noticed was that in almost all of them, everyone pretended as if they were just giving one another gifts and then they fervently denied they expected anything back. But in actual fact everyone understood there were implicit rules and recipients would feel compelled to make some sort of return.
What fascinated Mauss was that this seemed to be universally true, even today. If I take a free-market economist out to dinner he’ll feel like he should return the favor and take me out to dinner later. He might even think that he is something of chump if he doesn’t and this even if his theory tells him he just got something for nothing and should be happy about it. Why is that? What is this force that compels me to want to return a gift?
This is an important argument, and it shows there is always a certain morality underlying what we call economic life. But it strikes me that if you focus too much on just that one aspect of Mauss’ argument you end up reducing everything to exchange again, with the proviso that some people are pretending they aren’t doing that.
Mauss didn’t really think of everything in terms of exchange; this becomes clear if you read his other writings besides ‘The Gift’. Mauss insisted there were lots of different principles at play besides reciprocity in any society – including our own.
For example, take hierarchy. Gifts given to inferiors or superiors don’t have to be repaid at all. If another professor takes our economist out to dinner, sure, he’ll feel that he should reciprocate; but if an eager grad student does, he’ll probably figure just accepting the invitation is favor enough; and if George Soros buys him dinner, then great, he did get something for nothing after all. In explicitly unequal relations, if you give somebody something, far from doing you a favor back, they’re more likely to expect you to do it again."
see more at link above...
David Graeber currently holds the position of Reader in Social Anthropology at Goldsmiths University London. Prior to this he was an associate professor of anthropology at Yale University. He is the author of ‘Debt: The First 5,000 Years’ which is available from Amazon.
Interview conducted by Philip Pilkington, a journalist and writer based in Dublin, Ireland.
Philip Pilkington: Let’s begin. Most economists claim that money was invented to replace the barter system. But you’ve found something quite different, am I correct?
David Graeber: Yes there’s a standard story we’re all taught, a ‘once upon a time’ — it’s a fairy tale.
It really deserves no other introduction: according to this theory all transactions were by barter. “Tell you what, I’ll give you twenty chickens for that cow.” Or three arrow-heads for that beaver pelt or what-have-you. This created inconveniences, because maybe your neighbor doesn’t need chickens right now, so you have to invent money.
The story goes back at least to Adam Smith and in its own way it’s the founding myth of economics. Now, I’m an anthropologist and we anthropologists have long known this is a myth simply because if there were places where everyday transactions took the form of: “I’ll give you twenty chickens for that cow,” we’d have found one or two by now. After all people have been looking since 1776, when the Wealth of Nations first came out. But if you think about it for just a second, it’s hardly surprising that we haven’t found anything.
Think about what they’re saying here – basically: that a bunch of Neolithic farmers in a village somewhere, or Native Americans or whatever, will be engaging in transactions only through the spot trade. So, if your neighbor doesn’t have what you want right now, no big deal. Obviously what would really happen, and this is what anthropologists observe when neighbors do engage in something like exchange with each other, if you want your neighbor’s cow, you’d say, “wow, nice cow” and he’d say “you like it? Take it!” – and now you owe him one. Quite often people don’t even engage in exchange at all – if they were real Iroquois or other Native Americans, for example, all such things would probably be allocated by women’s councils.
So the real question is not how does barter generate some sort of medium of exchange, that then becomes money, but rather, how does that broad sense of ‘I owe you one’ turn into a precise system of measurement – that is: money as a unit of account?
By the time the curtain goes up on the historical record in ancient Mesopotamia, around 3200 BC, it’s already happened. There’s an elaborate system of money of account and complex credit systems. (Money as medium of exchange or as a standardized circulating units of gold, silver, bronze or whatever, only comes much later.)
So really, rather than the standard story – first there’s barter, then money, then finally credit comes out of that – if anything its precisely the other way around. Credit and debt comes first, then coinage emerges thousands of years later and then, when you do find “I’ll give you twenty chickens for that cow” type of barter systems, it’s usually when there used to be cash markets, but for some reason – as in Russia, for example, in 1998 – the currency collapses or disappears.
PP: You say that by the time historical records start to be written in the Mesopotamia around 3200 BC a complex financial architecture is already in place. At the same time is society divided into classes of debtors and creditors? If not then when does this occur? And do you see this as the most fundamental class division in human history?
DG: Well historically, there seem to have been two possibilities.
One is what you found in Egypt: a strong centralized state and administration extracting taxes from everyone else. For most of Egyptian history they never developed the habit of lending money at interest. Presumably, they didn’t have to.
Mesopotamia was different because the state emerged unevenly and incompletely. At first there were giant bureaucratic temples, then also palace complexes, but they weren’t exactly governments and they didn’t extract direct taxes – these were considered appropriate only for conquered populations. Rather they were huge industrial complexes with their own land, flocks and factories. This is where money begins as a unit of account; it’s used for allocating resources within these complexes.
Interest-bearing loans, in turn, probably originated in deals between the administrators and merchants who carried, say, the woollen goods produced in temple factories (which in the very earliest period were at least partly charitable enterprises, homes for orphans, refugees or disabled people for instance) and traded them to faraway lands for metal, timber, or lapis lazuli. The first markets form on the fringes of these complexes and appear to operate largely on credit, using the temples’ units of account. But this gave the merchants and temple administrators and other well-off types the opportunity to make consumer loans to farmers, and then, if say the harvest was bad, everybody would start falling into debt-traps.
This was the great social evil of antiquity – families would have to start pawning off their flocks, fields and before long, their wives and children would be taken off into debt peonage. Often people would start abandoning the cities entirely, joining semi-nomadic bands, threatening to come back in force and overturn the existing order entirely. Rulers would regularly conclude the only way to prevent complete social breakdown was to declare a clean slate or ‘washing of the tablets,’ they’d cancel all consumer debt and just start over. In fact, the first recorded word for ‘freedom’ in any human language is the Sumerian amargi, a word for debt-freedom, and by extension freedom more generally, which literally means ‘return to mother,’ since when they declared a clean slate, all the debt peons would get to go home.
PP: You have noted in the book that debt is a moral concept long before it becomes an economic concept. You’ve also noted that it is a very ambivalent moral concept insofar as it can be both positive and negative. Could you please talk about this a little? Which aspect is more prominent?
DG: Well it tends to pivot radically back and forth.
One could tell the history like this: eventually the Egyptian approach (taxes) and Mesopotamian approach (usury) fuse together, people have to borrow to pay their taxes and debt becomes institutionalized.
Taxes are also key to creating the first markets that operate on cash, since coinage seems to be invented or at least widely popularized to pay soldiers – more or less simultaneously in China, India, and the Mediterranean, where governments find the easiest way to provision the troops is to issue them standard-issue bits of gold or silver and then demand everyone else in the kingdom give them one of those coins back again. Thus we find that the language of debt and the language of morality start to merge.
In Sanskrit, Hebrew, Aramaic, ‘debt,’ ‘guilt,’ and ‘sin’ are actually the same word. Much of the language of the great religious movements – reckoning, redemption, karmic accounting and the like – are drawn from the language of ancient finance. But that language is always found wanting and inadequate and twisted around into something completely different. It’s as if the great prophets and religious teachers had no choice but to start with that kind of language because it’s the language that existed at the time, but they only adopted it so as to turn it into its opposite: as a way of saying debts are not sacred, but forgiveness of debt, or the ability to wipe out debt, or to realize that debts aren’t real – these are the acts that are truly sacred.
How did this happen? Well, remember I said that the big question in the origins of money is how a sense of obligation – an ‘I owe you one’ – turns into something that can be precisely quantified? Well, the answer seems to be: when there is a potential for violence. If you give someone a pig and they give you a few chickens back you might think they’re a cheapskate, and mock them, but you’re unlikely to come up with a mathematical formula for exactly how cheap you think they are. If someone pokes out your eye in a fight, or kills your brother, that’s when you start saying, “traditional compensation is exactly twenty-seven heifers of the finest quality and if they’re not of the finest quality, this means war!”
Money, in the sense of exact equivalents, seems to emerge from situations like that, but also, war and plunder, the disposal of loot, slavery. In early Medieval Ireland, for example, slave-girls were the highest denomination of currency. And you could specify the exact value of everything in a typical house even though very few of those items were available for sale anywhere because they were used to pay fines or damages if someone broke them.
But once you understand that taxes and money largely begin with war it becomes easier to see what really happened. After all, every Mafiosi understands this. If you want to take a relation of violent extortion, sheer power, and turn it into something moral, and most of all, make it seem like the victims are to blame, you turn it into a relation of debt. “You owe me, but I’ll cut you a break for now…” Most human beings in history have probably been told this by their debtors. And the crucial thing is: what possible reply can you make but, “wait a minute, who owes what to who here?” And of course for thousands of years, that’s what the victims have said, but the moment you do, you are using the rulers’ language, you’re admitting that debt and morality really are the same thing. That’s the situation the religious thinkers were stuck with, so they started with the language of debt, and then they tried to turn it around and make it into something else.
PP: You’d be forgiven for thinking this was all very Nietzschean. In his ‘On the Genealogy of Morals’ the German philosopher Friedrich Nietzsche famously argued that all morality was founded upon the extraction of debt under the threat of violence. The sense of obligation instilled in the debtor was, for Nietzsche, the origin of civilisation itself. You’ve been studying how morality and debt intertwine in great detail. How does Nietzsche’s argument look after over 100 years? And which do you see as primal: morality or debt?
DG: Well, to be honest, I’ve never been sure if Nietzsche was really serious in that passage or whether the whole argument is a way of annoying his bourgeois audience; a way of pointing out that if you start from existing bourgeois premises about human nature you logically end up in just the place that would make most of that audience most uncomfortable.
In fact, Nietzsche begins his argument from exactly the same place as Adam Smith: human beings are rational. But rational here means calculation, exchange and hence, trucking and bartering; buying and selling is then the first expression of human thought and is prior to any sort of social relations.
But then he reveals exactly why Adam Smith had to pretend that Neolithic villagers would be making transactions through the spot trade. Because if we have no prior moral relations with each other, and morality just emerges from exchange, then ongoing social relations between two people will only exist if the exchange is incomplete – if someone hasn’t paid up.
But in that case, one of the parties is a criminal, a deadbeat and justice would have to begin with the vindictive punishment of such deadbeats. Thus he says all those law codes where it says ‘twenty heifers for a gouged-out eye’ – really, originally, it was the other way around. If you owe someone twenty heifers and don’t pay they gouge out your eye. Morality begins with Shylock’s pound of flesh.
Needless to say there’s zero evidence for any of this – Nietzsche just completely made it up. The question is whether even he believed it. Maybe I’m an optimist, but I prefer to think he didn’t.
Anyway it only makes sense if you assume those premises; that all human interaction is exchange, and therefore, all ongoing relations are debts. This flies in the face of everything we actually know or experience of human life. But once you start thinking that the market is the model for all human behavior, that’s where you end up with.
If however you ditch the whole myth of barter, and start with a community where people do have prior moral relations, and then ask, how do those moral relations come to be framed as ‘debts’ – that is, as something precisely quantified, impersonal, and therefore, transferrable – well, that’s an entirely different question. In that case, yes, you do have to start with the role of violence.
PP: Interesting. Perhaps this is a good place to ask you about how you conceive your work on debt in relation to the great French anthropologist Marcel Mauss’ classic work on gift exchange.
DG: Oh, in my own way I think of myself as working very much in the Maussian tradition. Mauss was one of the first anthropologists to ask: well, all right, if not barter, then what? What do people who don’t use money actually do when things change hands? Anthropologists had documented an endless variety of such economic systems, but hadn’t really worked out common principles. What Mauss noticed was that in almost all of them, everyone pretended as if they were just giving one another gifts and then they fervently denied they expected anything back. But in actual fact everyone understood there were implicit rules and recipients would feel compelled to make some sort of return.
What fascinated Mauss was that this seemed to be universally true, even today. If I take a free-market economist out to dinner he’ll feel like he should return the favor and take me out to dinner later. He might even think that he is something of chump if he doesn’t and this even if his theory tells him he just got something for nothing and should be happy about it. Why is that? What is this force that compels me to want to return a gift?
This is an important argument, and it shows there is always a certain morality underlying what we call economic life. But it strikes me that if you focus too much on just that one aspect of Mauss’ argument you end up reducing everything to exchange again, with the proviso that some people are pretending they aren’t doing that.
Mauss didn’t really think of everything in terms of exchange; this becomes clear if you read his other writings besides ‘The Gift’. Mauss insisted there were lots of different principles at play besides reciprocity in any society – including our own.
For example, take hierarchy. Gifts given to inferiors or superiors don’t have to be repaid at all. If another professor takes our economist out to dinner, sure, he’ll feel that he should reciprocate; but if an eager grad student does, he’ll probably figure just accepting the invitation is favor enough; and if George Soros buys him dinner, then great, he did get something for nothing after all. In explicitly unequal relations, if you give somebody something, far from doing you a favor back, they’re more likely to expect you to do it again."
see more at link above...
Wednesday, August 24, 2011
20,000 Leagues Under the State
July/August 2011 20,000 Leagues Under the State
Beneath the surface of American government lurks a system of social programs for the wealthy that is consuming the federal budget. It’s time for progressives to do battle with tax expenditures.
By Suzanne Mettler
Facebook Twitter Digg Reddit StumbleUpon Delicious
Photo: Mark Thomas
Growing up during the Depression, Sam Marchesi had to drop out of school after eighth grade—soon after his father died—to work and help support his mother and his seven younger siblings. When World War II began, he enlisted in the Army and served in the Pacific. Upon his return, he took advantage of the educational and training benefits of the G.I. Bill, joining the 52 percent of fifteen million returning veterans who did so. He acquired vocational training in architectural drawing and on-the-job training as an apprentice carpenter, skills that enabled him to become a successful custom builder. When I interviewed Marchesi in the late 1990s for a study of the G.I. Bill, he reflected, “I think it was a great thing that the government did, to give us this opportunity to pick up where we left off. We had to face the world. We had to make a living. Thank God the government had the doors open for us.”
The G.I. Bill’s transformative effects on the lives of men like Marchesi have become legendary, but just as striking in hindsight is the clearly visible role that government played as the source of those opportunities. In more recent decades the federal government has expanded its efforts to provide college aid to all Americans. But instead of delivering a straight benefit, like the original G.I. Bill, most of that aid has come through roundabout means, like payments to banks to provide students with loans, or loopholes in the tax code to subsidize families to save for or pay for college. Generations of Americans have now graduated with the help of these costly-though-indirect programs. Yet over the years, in conversations with my own students, I’ve noticed that, unlike Marchesi, few of them recognize that they’ve received benefits from government. It’s hard to imagine them reflecting on their HOPE Tax Credits, or their 529 and Coverdell college savings plans and saying, “Thank God the government had the door open for us.”
And it’s not just my students. In 2008, I conducted a survey to gauge the degree to which Americans who had received various government social benefits recognized them as such. Not surprisingly, most beneficiaries of the G.I. Bill who took part in the survey acknowledged that they had been given a leg up by the government. But of the respondents who made use of tax-advantaged Coverdell or 529 education savings accounts, 64 percent said they had “not used a government social program,” as did 59.6 percent of those who used HOPE and Lifelong Learning Tax Credits.
more at link above..
Beneath the surface of American government lurks a system of social programs for the wealthy that is consuming the federal budget. It’s time for progressives to do battle with tax expenditures.
By Suzanne Mettler
Facebook Twitter Digg Reddit StumbleUpon Delicious
Photo: Mark Thomas
Growing up during the Depression, Sam Marchesi had to drop out of school after eighth grade—soon after his father died—to work and help support his mother and his seven younger siblings. When World War II began, he enlisted in the Army and served in the Pacific. Upon his return, he took advantage of the educational and training benefits of the G.I. Bill, joining the 52 percent of fifteen million returning veterans who did so. He acquired vocational training in architectural drawing and on-the-job training as an apprentice carpenter, skills that enabled him to become a successful custom builder. When I interviewed Marchesi in the late 1990s for a study of the G.I. Bill, he reflected, “I think it was a great thing that the government did, to give us this opportunity to pick up where we left off. We had to face the world. We had to make a living. Thank God the government had the doors open for us.”
The G.I. Bill’s transformative effects on the lives of men like Marchesi have become legendary, but just as striking in hindsight is the clearly visible role that government played as the source of those opportunities. In more recent decades the federal government has expanded its efforts to provide college aid to all Americans. But instead of delivering a straight benefit, like the original G.I. Bill, most of that aid has come through roundabout means, like payments to banks to provide students with loans, or loopholes in the tax code to subsidize families to save for or pay for college. Generations of Americans have now graduated with the help of these costly-though-indirect programs. Yet over the years, in conversations with my own students, I’ve noticed that, unlike Marchesi, few of them recognize that they’ve received benefits from government. It’s hard to imagine them reflecting on their HOPE Tax Credits, or their 529 and Coverdell college savings plans and saying, “Thank God the government had the door open for us.”
And it’s not just my students. In 2008, I conducted a survey to gauge the degree to which Americans who had received various government social benefits recognized them as such. Not surprisingly, most beneficiaries of the G.I. Bill who took part in the survey acknowledged that they had been given a leg up by the government. But of the respondents who made use of tax-advantaged Coverdell or 529 education savings accounts, 64 percent said they had “not used a government social program,” as did 59.6 percent of those who used HOPE and Lifelong Learning Tax Credits.
more at link above..
Subscribe to:
Posts (Atom)