>> this event was hosted by the national world war ii museum in new orleans. >> booktv has over 100,000 twitter followers. be a part of the excitement. follow booktv on twitter to get news, updates, author information a doctorate with authors during our live programming. twitter.com/booktv. >> up next, david graeber, author of "debt: the first 5,000 years," discusses the impact of debt on the world over thousands of years with doug henwood, the author of wall street and after the new economy. this is just over an hour. >> i feel intimidated by the 5000 year perspective, and by starting with a very mundane and

five seconds ago in historical timeframe, i was reading "the new york times" a few weeks ago and to learn something. there's a piece about the debt limit. the reporter explained, the think peace as they like to call, journalism, reporter explained that the parties were fighting over the moral high ground. i didn't see very much more high ground at that point. but there's also an interesting point that was inadvertently be made by the reporter. that an awful lot of discourse around debt is around morality and austerity which quickly follows the bursting of the bubble is often presented as kind of a moral renovation. certainly bubbles in the past have been followed by periods of self-flagellation and what were we thinking kinds of things, but

david, you write a lot about debt and morality. there's a whole lot of language around the. how did debt which conventionally thought of it very nearly defined economically get so wrapped up in issues of morality? >> well, we don't really know. it seems to have happened so early, it's almost beyond the reach of the historical record but the very earliest documents seem to have, already have -- i mean, in hebrew and sanskrit and arabic, the word debt, sin and guilt are acted the same words. it's curious because it almost all of it ancient religions they almost and for the start the same way. much like plato's republic starts what is just as? is not just a matter of paying your debts? no, it isn't. you almost conclude that doesn't work and rest of us figure out it's not that. than what?

world religions obscene. they start by saying morality is just debt, the same thing. then they say but wait, that doesn't really work. so what it ends up being very is a lot. rahman is for example, sanskrit script recognize you don't really oh a debt to your parents is actually the way you resolve that. and the bible is about forgiveness or debt cancellation. true morality. but the interesting thing they feel they have to start that way. the conclusion i finally came to is that the only really way to explain is they're stuck with this lens because that was the language of politics and power at the time. we don't really know what people in ancient india were arguing about when they talk politics that it seems from all the evidence we have that was it, and that we have language of leftover political debates we don't really know anymore what exactly they were.

we're debt and the linkage of debt forgiveness reckoning redemption, the everyday language. they got swept into this more language. it's been left with us ever since. i think the reason why is because debt from the kind of moral traffic it's the language of power. these people in power have always discovered that is has, it's the easiest way to take a situation of pure arbitrary violent authority and make it seem like the victim is to blame. conquering armies understand this. you have power over somebody, just confident. the easiest thing to do is say well, look, you guys always your lives because we didn't kill you, we're going to demand this, name something they can't possibly pay come in and say i'm going to be a nice guy, i'll let you off the hook this month. and suddenly of the moral high ground, they are a bunch of schmoes and have to run around feeling rotten about themselves.

the only way to apply to that is to say wait a minute, who owes what to do, which is, in fact, what people almost and bravely did. and what we discovered was out it was a very effective way of power relations to make it seem like the victims are to blame, to the extent that probably most people who ever lived i would guess have been told they were debtors at some point in their lives, it's also the focus of the vast majority of insurrections and rebellions that have happened over world history. it was once said there's basically one revolution program and all of integrity canceled the debts and redistribute the land. so that reply, waiting to come does happen all the time that what you say, of course you're using language of debt. the great moral philosophers have to start with that language if only to than to try to transcend and kick away.

>> you mention the jubilee. i remember pat robertson was running for president back in 1988. he suggested we have a jubilee. which, of course, disqualified him as a series candidate for president. it prompted stern lectures from the wall street editorial page. but that tradition, certainly christian morality is very prominent in politics here is interesting, isn't? the other part of pat robertson's program where he argued that the federal reserve system of money creation is actually the first divine system of money creation, making of money and getting into capitalists like reproduces the divine act of creationism. x. nilo. we understand money -- [talking over each other] it's deeply wrapped up in matters of faith any recognize

that. he took it a little too seriously for the people in charge. spent another element of religious tradition, many religions have frowned on future. that means to be largely forgotten as well. what happens? >> that's an interesting story. in fact, one of the things that came out what is researching this book, i guess you can say it's one of my discoveries is that history seems to flow back and forth between predominantly virtual credit money and periods where gold and silver, where money is and where coins and some of the material object actual metal is being used in every transaction. the funny thing is we think this world we are moving into now, this brave new world is the president. completely opposite is true. in ancient mesopotamia they were doing most things by credit. coinage was only invented 2000 years after the first accounts we have for example, of compounded interest rates,

things like that. however, in periods where you have credit as the main form of money, it's hard to think of money as something which is quite as set in stone as it is an figure people are using physical stuff. so it's understood money is -- there's some mechanism to make sure the whole system doesn't go crazy. for example, the jubilee's, periodic cancellation. mesopotamian kingswood often cancel all debts taking power. all right, new king, new world, new society. will just start over. that became institutionalized in the bible, but in the middle ages which is another period of virtual credit, reverts to bully them, debts are john not forgiven during the opinion from about 600 b.c., maybe 600 a.d. with the middle ages world goes back to credit systems and once

again you find some sort of vast cosmological overarching institutions designed to protect debtors. in this case in islam and in christianity. christianity was stricter at first. along with other things like debt that came along with it. it was considered critical for society didn't polarize and split apart. the rise of the economic system we have now which comes after 1492, the bullying comes with an back europe again. most of the bullion ends up in china but it swept through europe on the way. they go back to an idea that money really is gold and silver. to change the idea of what money is. and interest sort of worms its way back in. it's interesting how they did it. it was kind of a subterfuge. the notion of interest actually goes back to latin enter as a.

but what it actually meant originally penalty for late payment. so the idea was while renting money was a sin, you could charge people for not returning something by the date they said they would. because it was assumed that if these people they merchants, starts with commercial law, if you have the money you would be putting it out to some profitable enterprise. so it would be going at maybe 5% a year. then they could pay you that build the. that was there legal out. >> i think italian bankers and in a very complex what amounted to derivative instruments to disguise the interest of the financial innovation goes back very, very long way. mortgages were another way of doing it. you can't officially charge interest you can just okay, i'm buying a house and renting it back to you. >> now we do sale backs rightly.

this is coming after the news after goldman sachs hard a defense attorney. we did have this recent ride profligacy yet it seems like the ones urging us to pay their debt to society, the others are collecting interest. how do they get away with that? >> well, you know, all right. this is my reading. there's the obvious answer, which is debts are social constructs a and debts between rich people have always been a little different than debts either between corpulent each other, where people tend to help each other out. but debts between rich and poor, they are kind of different. that's what exactly rally of that really comes in. as i was a rich people can be

incredibly generous, understanding and forgiving when dealing with each other. as we really saw in 2008. not so much went in with us. this has always been true. the funny thing is that we seem to be expecting another turn of the cycle. this is another one of my major conclusions in the book. we've had virtual credit money and then shifts to gold and silver, initiative and middle ages back to credit money, shift back to bullion. it's starting again. in 71 of the dollar was completely detach and go. since then it's gone at breakneck pace. with a plastic replacing currency of most everyday transactions. we've had financialization. we've had the rise of 401(k)s and mortgages suddenly everyone's, credible say the third world.

there's microcredit. on all fronts you seem to be moving towards both an ideology of credit and the actual use of virtual money. [inaudible] >> well, it was the only thing saving us wages were completely stagnant. i mean credit. but the problem was when you go into the virtual credit, as i think, historically what's happened, to problems. one is how to prevent this whole thing from spinning out of control. if money is just a promise. what's to keep people from making any kind of crazy promise? and even more what's to prevent people from falling into debt traps and becoming enslaved? that was the great fears about most of human history. terrible moral disaster it would rip a society part was a small percentage of population essential enslaved everybody else by trapping them into debt and people are forced to sell of

members of the family into slavery often, ultimately sell themselves. now, this was, there were mechanisms to prevent that from happening. the jubilee, the anti-usury laws, various other things. buddhist for example, didn't believe in abolishing interest but instead they intended the punjab. that was supposed the way of saving people. the first major pawn shops in china. now, what did we do this time around? we are only 40 years and was probably going to be a 500 year cycle, if history runs tuesday can't necessarily expect we are really going to understand what's going on. >> president michele bachmann will bring back the gold standard. >> she will try. [laughter] that, what then happens is you protect some sort of institution to protect debtors. they did exactly the opposite.

they said that these gigantic first global administrative system because you have the imf, the trade bureaucracies, the e.u. and nafta. various financial institutions. what do these guys do? instead of being there to protect debtors they are there protect creditors and make sure nobody ever defaults which economically is insane. >> the burden of adjustment should be the creditors, not the debtors. >> exactly. and, of course, teens had it right. he was following, teen sexy study mesopotamian economic moralist. >> there is morality and morality. so what they did is exactly opposite of what historically you would imagine they should have done. and the result was predictably catastrophic. version of the third world debt crisis and now that latin

america, east asia have largely liberated themselves from the ims they just take them out basically. the same thing is happening here. and, in fact, another point i was like to make, that idea of the terrible debt crisis were one or 2% of my pollution becomes a critical as an effectively enslaved everybody else, the way most records are living. most people are working extra jobs, working at jobs they would otherwise never want to be in. in order to pay back those debts. if aristotle were magically whisked into the present who probably not take the distinction between renting yourself up to someone else, to work for them and selling yourself to someone else to work for them as being more than a legal nicety. he would probably conclude most people are slaves. >> it may been catastrophic for the debtors. but they have been very good for the creditors. go back to the first modern debt crisis in austerity screen,

1975, the bankers really essentially took over the city, cut back on social spending. and were quite conscious that if we can get away this in new york which is a very volatile environment where people have high expectations we can do this anyway. there was an op-ed in the new york times back in 1975. go to the latin debt crisis of the '80s and that was used as a lever to open up all these economies, open up the trade and finance, privatization. it was really the club of neoliberalism. reminds me the quote, money has one face. creditors have been successful over the last four years, 35 or 40 years and using debt to enslave an impoverished and increasing their own wealth and power. do you think luck is running

out? >> ya. 2008 so let the cat out of the bag because they can do this partly because people are so following the morality of a bullion-based money system whereby it seems like that have to be paid. what everybody discovering 2008 where they basically blew up the own system, is that debt still have to be paid. it's the lesson of a virtual credit money system. if money is just a promise, an iou, why does it have greater moral standing than any other promise? perhaps with the idea that the argument would be if you don't pay your debts, your whole life will fall apart. but, in fact, i call economic system -- the culprits didn't have to pay their debts even in. so as result i think that people realize, i mean there was a

moment of lucidity right after the crash. in fact, people were willing to rethink almost anything. i remember even the economist ran a headline saying capitalism, was it a good idea? that lasted about a month and then he put a big band-aid over the thing and move along, move along. but band-aid sal ended starting to happen. and i think people came to the realization the line they've been telling us for all these years of neoliberalism is nonsense. market doesn't run itself. nobody can possibly believe that at this point. and debts don't have to be repaid. if they can take 13 trillion or whatever investment is, sort of dark economy that money was finagled away, well, if they can have that debt disappear, there's no reason they couldn't do federal debt. it's all a political thing.

once you realize that and if democracy is to mean anything, everybody has to have a say over that. i think that's exactly why you see these movements in spain and greece. that's what they're saying and that's why they are framing it as let's go back to grassroots democracy. >> at the doll and political discourse deal seems to assume that the only way you need to tighten your belts and the poor need to give up medicaid so that rich bankers can get another jaguar. doesn't seem to be any significant challenge. may be showing signs of fraying, but -- >> i think it depends on where you are. they are in ahead of us in terms of austerity. i've been told by some of us were recently increased that is going to the point of what it was like in argentina in 2001 when politicians basically couldn't go to the restaurant without wearing a false nose and things like that. people would just attack them.

politicians can't go out on the street anymore. i think that might will happen. >> a couple of economists who study the european record over the last 40 years or so found austerity programs which were great upsurge in riots. >> gee, you think? >> proven. speaking of economists, in their marvelous little icy hearts, they long have you that money was very insignificant. a whole lot of clichés and economic profession, money is a better i think of john stuart mill who said there's nothing more insignificant than money. the idea that money is neutral dominate mainstream news. where ever did that idea come from? >> it's really odd because it has nothing to do what economists actually do. there's a sense that all economies are really ordered economies. money is whereby we make it more

convenient. again, another one of those there's nothing to see here moment. and it goes back to adam smith actually. there's a fastening story that we've all learned about where money is supposed to come from, originally there's order and nobody sang give 20 chickens for the cow. i don't need chickens right now. and eventually if you get something to guy needs or you have to come up with money. and we all learned this. in fact, being an anthropologist is kind of a personal professional pet pig because we've been looking for 150 years if there's anyplace in the world they did not we would have found it by now. it's not true. they do lots of other things but they never do that. it's kind of amazing considering there are that many things that nobody ever does. [laughter] button there's one.

occasionally you see rules -- but in a society. the question is why, and i think the real reason is because money is credit, credit is social and economies had a problem with credit because -- >> they also have trouble with social relation. >> exactly. you have to say there's a spirit of human activity where people are just thinking about stuff. in normal human life were never just thinking about stuff we have to create a sphere where people just think about stuff which is kind of what economists were doing. and assistant people like it came from a class where they thought you really should be able to walk into the butcher or the bank then plunk down your cash, take your stuff, walk out and never see the guide again, even though his name. which is not the way it worked at the time. it was a great line when he said is not from the benevolence, the butcher, the baker we expected

but rather self interest. the crazy thing is it wasn't her at the time. people were asking favors all the time. but there was a feeding they shouldn't. spent there was a good with britain was run by a bunch of -- well, yeah, been a problem with credit money, getting out of hand that the problem was they thought others should be using actual coins but they couldn't, and have the means to make it. it was in the 1830s and '40s with a good mass produce enough cash people could go to the store. for longtime shops had to produce their own money. now, so why does adam smith tell the story? it makes sense. here's this guy, here's his neighbor, he wants his cow. he says i will give you some chickens. the guy says no. well, these guys are neighbors in a small community. by the economist arson do own interact on a spot trade.

something for something right now and walk away. what sense does that make? these guys are neighbors. if you don't want is chickens he will have something. that's what happens. what really happens as you walk up and say nice gal. you like it? issuers. don't even think about giving something back. now you own. he will come later. so say my son is in love with her daughter, whatever he might come up with. what you have is a informal criticism. but that involves things with

>> they had a system credit money, called imaginary money. it didn't exist but everybody continue to use first roman denominations of currently to do credit transactions and then later other ones. so like schilling's and so forth i'll go back to money that charlemagne intended to make but never actually did. i think they meant at some of it but some of the larger denominations he never got around to.

>> but something changes with capitalism. you can draw these long parallels, credit money versus of the money. and say these things have been rather thousands of years but the system in which you produce commodities for sale in the market is qualitatively different. how does money figure into it, that difference? >> okay, first you have to look at the content. in order to see the difference i think. i think that one of the really interesting things, in certain ways it actually is quite similar to the situation you see where money really comes out of the need to pay soldiers. coins, money. you have criticisms as i say much earlier. so there's this old artist state

grant you see in china, india, traces of increased where there is techniques of profit-seeking through government making war. and the interesting thing about capitalism is that you still have that relation between giant empires were making states and money, but the idea that money, gold and silver tends to dominate especially in periods of intense violent empires. but at the same time there's this strange relationship between the merchant and the warrior. rodale really hit it i think the nail on the head when he tried to make a distinction between markets and capitalism. markets do seem to develop originally as a side effect of military operations. this is the growing consensus of historians. but they developed independently on their own in certain circumstances, especially within states, or between them. but what the ultimate spirit of

a market system is a commodity to money to commodity to another commodity. cnc prime. famous formula. it's a way to get chickens and you want a cow, you can go about doing that through the medium of money. now, capitalism he said is more using money to get more money, or spending money. a variation on that. and the interesting point he makes that you can will make an argument that rather being an extension of the market or identical to the market which is what we are now taught to think, in fact capitalism is parasitical in the market. it's what happens when people with a lot of money want to use it to turn into more money, a line with heads of state or powerful usually rather violent

political authorities to create monopolies so that you can subvert the laws of market. you really need monopolies of one sort or another in order to do so. so china is the great counter example to what happened in europe. throughout almost all of its history, china was the ultimate anti-capitalist market state. they love markets. they had markets that were much more developed than anyplace in the world at the time. higher standards of living as well. but the markets were tightly controlled and sustained by the government. they did the very opposite of what a monopolist would normally do to many but prices. what happened in europe according to the road billions and the sort of world systems announces people are coming out of this tradition was that you lots of little people fighting it out and get this feudal system with cracks and holes were merchants could grab hold of these city states where they

could make their own laws. so that huge political advantage. they eventually started granting them these incredible monopolistic advantage of pixel capitalism emerges from a strange alliance between were making states and the financiers who ultimately make a profit off the deal. >> how does the gold figure? >> that's interesting. as i say a lot of it only kind of passes through europe and go straight to asia. that has a strange history because turn back from credit money to gold and silver as bullion money starts before the americans are invented. what's happening in europe around 1450 but even more important is happening in china. the reason for that was an outburst of market pipe is in

which is something that happens every now and then an issuer markets become autonomous but in china it happened because the mongols had used this system of paper money, and paper money starts as a credit system and it is quickly nationalized. so they had this paper money system and its associate with this system where people are stuck in certain occupations, some people are soldiers come some people are peasants. very unpopular. they try to maintain a system that nobody likes it. there's all this independent silver mining, peasants were runaway or create this alternative cash economy. which was independent of the gun. find the government says okay fine. will get rid of all the cash instead. you can pay your taxes and silver. we won't even coin money anymore. then they want to get as much

silver to the country to keep taxes down. the problem is there isn't much silver and china and it is to go through all the silver in japan in about 20 years. they're looking around for new sources of silver choose when the conquistadors happen to stumble to the new world. people of estimated that the colonies in the new world would never have been viable economically were it not for the fact that there was an enormous demand for silver coming out of china. witches eventuate exports and going. efforts to go through europe and then they start sending directly across the pacific. now, a lot of that money passes through europe but it becomes a basis for credit source. the iberian governments, people using paper money like crazy based on this bullion trade, speculation in the bullion trade. that's what caused the massive inflation in europe which page the way for capitalism.

the period after the black death people doing fairly well in europe economically. one of the great ironies in history. the number of working people goes way down by a third. >> clears the slate. >> clears the slate. >> like world war ii spent and suddenly they just shoot out. a number of holidays is like the easiest way to see what's going on. i would say if you want to know how the class struggle is going in any particular time and place, look at how my days people have to work. in the 1450 a much of europe it was like maybe half the days there were holidays. and they are spending it all on these great carnivals, public celebrations of various kinds. suddenly, well, with the infusion of the bullion there is a huge inflation. it's not caused by gold and silver just coming in. most of it is passing through. but this creation of credit instruments. reallocation to sort of the

emerging. and that crash and wages is, wages here being a metaphor for what people -- really sets the stage for creating capitalism. >> and i guess since we're thinking in the long view, it's been four years since nixon shut the gold window and we've been living in a sort of pure credit money. we have another 460 years ago. is this the end of the credit face? >> no. well, the cycles are getting tighter but that that much data. -- tighter. spent okay, i think we are ready for questions. anyone? >> richard? wait for the mic or phone.

>> i haven't read the book. there are a number of reference to currency in the old testame testament, and i mean, that much quoted verses an eye for an eye, a tooth for tooth, is at least what i was taught was not, you know, you get your eye gouged out, you gouged the gougers eye out. there's a monetary trend that there is value that is owed. and then there are other references to other monetary trends -- transactions in which its money as opposed to credit, you know, shackles or some type of currency. and that's what, about 3000 years old. >> something like that. okay. your basis for saying shekels or

currency is -- and, that's the thing. we just assume that. but if they were shackled going to we found them. in fact, going agent shows up only simultaneously in china, india and the eastern mediterranean sometime later. now, the reason why it's confusing is that we are used to assume that when people are talking about denominations of money for something physically there. sometimes there was. people would wait out silver occasionally. money begins in the age of the middle east as an equivalence between grain and silver, certain measure of his equals that. now, the question is how people were actually paying each other. the thing that i thought was the big giveaway is that this americans actually didn't make scaled content scales actually. they didn't bother making scales accurate enough to measure out the tiny amounts of silver that would have been required to buy

sort of pots and pans and things like that. so somehow they were getting them in some of the ways. if you look at what happens in lots of markets around the world they do have a credit system. they use over as way to nominate that. and shekel is a way. shekel comes from silver.

>> it is true but they didn't pay them just installed. >> hard to live on that. richard? >> you mentioned, you talked briefly about the imf. and around the same time for virtual money in the 1970s, a lot of things that people used

come in third world people used to pay for our now monetize. it happened really rapidly over the last 30 years. you talk about this in a radio interview. what i want to ask was, you mentioned the question, how much of that had to be imposed by the state and how much was that markets spreading sort of on their own accord? because you say there's no market without the state. should i be doing this as a creation of new markets or is it just a different way of looking at something has already been going on? >> that's a real interesting history. in fact, one when we been able to reconstruct what must happen in four passes looking at the world of the colonial will but because he was a economist have this through that money would arise spontaneously and through this a money is an accounting imposed by the state through taxation was considered marginal, what those guys actually did when he went out to the coding world was exactly

that. no matter, the history of madagascar the best because i spent some years ago it was quite clear. the government took over madagascar. the first thing they said is we're going to have been economically self-financing colony, and you always money for the cost of the expedition which is outfitted to conquer you. so, you know, these armies don't come cheap. so we are going to impose a tax and have to pay that tax, is critical, and the money we want outgoing. and actually called it the moralizing tax, teach them the valley of work. the educational tax it's sometimes called. not to pay for education. it was educational in itself. but the idea was, and they're very careful about this. they said we need to make sure people after they pay the tax,

they have to go work on the plantation or grow pineapples or coffee or whatever it is, get them into the market but then we've got to make sure they have a little left over because they we set up little shops. we're both loan sharks, bringing the shopkeepers, but make sure they have enough that they can start buying lipstick and candy, nice little things and they will get hooked. this is very self-conscious. they wrote about this all the time. it was very clear a lot of them knew exactly going on. most people are dumb. they were on to what the administration were doing. so for many years a lot of them just refuse. they would take him pull all the money left over and buy cattle to sacrifice their ancestors and not go to the shops at all. but eventually, after centuries, a century, how long could you give up resistance when that's the only game in town, was very

self-conscious. and once you understand what was going on there trying to great markets and particularly labor markets in this case, it becomes, you can realize one of the great mysteries but if you believe the ads this version of history of where money comes from, it is spontaneous agree from below, why did ancient kings what taxes and money at all? because it golden so issues money they can grab the gold and silver. they've got all the money. why do they need more? what's the use of taking, stancu picture on and say okay, everybody give it back. it doesn't make a lot of sense. if you're trying to create a market, and particularly if you're trying to create a market to pay for soldiers, it makes perfect sense. the big problem you have is his 40,000 guys, how are you going to feed them? they would eat everything with a mile or two with the are living immediately. if you want to have broadband of soldiers attacking your community you've got to have come and play another 4000 able to feed all those guys. unless you take little bits of gold and silver which is what

they'll be putting anyway, so they're used to handling, stancu picture on it, and say okay and put in the kingdom has to give you one back. but at the same time your cream market. the diverse workplace that is cached and to develop around armies and military operations. >> fast-forward to the 1970s and the more recent time, the states are most liberal, most monetize that had not been were not directly in the colonial grip. like parts of africa, sort of postcolonial era and still they moved into, adopted neoliberal policies, no longer had free services offered by the state for that. how did that happen speak was largely through the imf. it was simply imposed.

directly. i mean, you know, again i turn to madagascar. madagascar has had like two or three accounts of revolution in last 20 years. the first when they had a guy who's put in power thought he was running the place. so he went to the imf, which they kicked out the previous, he was alive with north korea but knew enough about power to do whatever the imf told them. they kicked out that day. the new guy was like a brain surgeon or something. was a professional politician. went to the imf and said well, you know, name one country that did what you said and his rich. they said shut up and do what you are told. he said no. he didn't sign the imf treaty. you don't have an inf treaty the world bank will not give you money. you don't get american a. if you don't get american aid you can't get export credits. so basically i was the economic equivalent of dropping a nuclear bomb on the place. people die. they have that power to do that

to people who don't play alone. >> that, of course, go back to the nuke city fiscal crisis. they had to start charging tuition to state universities. it's important for the shop guys pick so it's really also were as margaret thatcher said we need to remake people's souls. there's a bit of soul by making going on spent and that's what i think a jubilee would be helpful because it would do exactly the opposite. i mean, it would be a real shock fight, always telling us okay, after 2008 we learned money is something we can just make a. it can be reshuffled. let's bring that home. >> thanks so much. this was really great. a quick question. is debt an invention that is just really need that someone came up on once and then used throughout the world? or is it something that is

permanent and everywhere come in your research did you find, i don't know, hawaii comes to mind as a place that wasn't involved in the world economy until much, much later. did you, you know, was it discovered in 1788 or something? did they have debt? isn't like something everybody does or is it something that spreads? and if not, is that, does that open up the possibility of a debt to society? >> i guess that depends on how strict are you want to define the term. normally when i think of debt i think ours moral obligation has been perverted by numbers and violence. but, put it somewhat less poetically, it's an obligation which can be exactly quantified, and which is depersonalized. it's not between two people, not between whoever the debt is owed to, you can transfer it. now, there are places that do

not have quantifiable and transferable obligations. i don't think it's a human universal. i think it's a potential human universal in that it's a concept that could be easily understood in any context. it's sort of like money. i mean, it would be hard to eliminate money of any sort because if you imagine money as a way of comparing values of things of a proportional fashion, it's an idea anybody could understand easily enough so it's a universal in that sense. people may proportional calculations like that. but once it's there it's hard to imagine to have completely gotten rid. but i think the key thing is not to assume that anything people are making promises to each other, even promises involving material things, that's a debt and, therefore, debt is universal because of venues and the rest of the package sort of naturally flows out of the. i don't think that's the case. >> we have time for one brief question and answer.

>> sandwiches coming out of this housing crisis where we witnessed -- >> coming out? we are? i didn't know. [laughter] >> we saw the rise of easy access to debt pushing of this idea of increased value. you have any more anecdotal anecdotes from morning history where that same thing as happened? >> which aspect now against it was easy access to credit, buying houses, pushing up the value of houses, supposedly of houses but it was based on speed you mean the fluctuating system? scams? scams are prevalent throughout history. [laughter] >> yes, i mean that is why you have these economic regulations. the debt trap is something that's very easy to fall into. you look in the bible. he looked almost anywhere. people with lots of money will figure out ways to trap people into debt.

if you take the idea that capitalism is this what hadn't been a good market, people always try that kind of thing. and one reason why religious codes are so strict about ensuring that it doesn't happen, the idea that you could have a market and people will not fall into that is utopian. i always think of utopian argument where one, when you say a thing should work and it doesn't you say individuals are to blame. the economic system is built for individuals and actually exist, and individuals as they actually exist if you set up a system where both make scams unfold as we historically no. >> all right. that's it. thanks. [applause] >> every weekend booktv offers 48 hours of programming, focus on nonfiction authors and books.

watch it here on c-span2. >> what are you reading this summer, booktv wants to know. >> well, what i have read recently is a wonderful book that i wrote. it's called "the speech" if it's a good book and it deals with the filibuster i gave in december, talking about the very, very bad agreement reached by the president, republicans on extending bush's tax break for the very wealthy. and also goes into some details by the middle class in this country is collapsing, and it also talks about the growing inequality in america, what this means for the future of our country. so i understand that self advertising, it's my book, but i did reread it. it's a good book. there's another book i have read recently which i like very much, that's called "third world america" by arianna huffington. it's a very readable book. she's a good writer.

and she catches on, you know, the trends that we have been saying for a number of years in terms of our physical infrastructure, in terms of education, in terms of health care. that frankly if we do not reverse, and this is her point, we're going to end up looking like a third world country. and what's that about, a friend of mine came back from china. he was at an airport in china, a new modern airport. flew into the net state. while he was waiting for a plane back to vermont, he happened to be sitting on the floor. it was quite a. his plane was delayed and he was wondering which was the third world country, the united states or china? so a lot of ominous trends in this country moving us in the wrong direction in terms of infrastructure, more and more people without health insurance. as the dominance of big money interests, wall street, and i

think her point is we've got to get our act together and reverse those trends so that would come to great nation that we know that we can and should be. another book that, in fact, i'm reading right now, is a book about the life of somebody i have known for a number of years. i wouldn't say he's a good friend but i've known him for many years, and that is will he knows the. the book is called "willie nelson: an epic life," and that's by joe patoski. it is not the most readable book in the world, which i think gives us the name of everybody in the world that has an interview with willie nelson. but given the fact that willie nelson is one of the more, is clearly one of the great entertainers of our time, and usually an icon and a unique type of individual because, because of who he is. and his entertainment qualities.

in vermont where i have seen him a number of times, all of this country, he brings just a huge range of people. most singers will appeal to this group of people, that group of people. will he brings them all together and i think that has a lot to do with his personality, his decency as a human being. his gentleness. he's a very gentle man. his decency has been just a very, very strong support of rural america family farmers. so if people are interested in learning about the life of a guy who was born in arkansas, has been a migrated to texas, you know, he worked in the cotton fields. he grew up very, very poor, and he has a unique ties i think of working americans today, so willie is, you know, i'm a big fan of his and this is a good book which talks about his life. last book, which is, you know,

it's pretty interesting actually, the topic might be, considered to be boring, it's a book called "the financial crisis," and that was put together by the commission that congress established to look at the causes of the financial crisis, what went on in wall street and how they ended up bringing us to the place where we are right now, which is the worst recession this country has experienced since the great depression. and that is, it's tough reading because what you are seeing is, you know, the incredible recklessness that stem from these people on wall street, you know, producing worthless financial instruments and selling them and leading us to where we now ar are in talking about the great power of wall street and their business model and so forth and so on. so i think that if anyone wants to understand what's going on in america today, you got to

understand wall street, you've got to understand the incredible power that they have economically and politically. and this book action does a pretty good job of getting there. so that's some of what i have read and am reading. >> tell us what you reading this summer. send us a tweet at booktv. .. >> host: first we have a representative of the

netherlands this european parliament, and she's a member of the party alliance of liberals and democrats for europe. we also have joining us james ellis, a member of the european parliament from the united kingdom who's a member of the conservative party. to both of you, welcome to "the communicators," we appreciate it. also joining us is kim hart of "the politico", one of our regulars. if i could start, and tell us why, mr. ellis, why are you in town this week? in washington? >> guest: well, i with a number of my colleagues from europe and from the business and academic community are here to engage with our american counterparts on a number of key issues which we think will be critical for our future for how the transatlantic economy can be competitive in the future. dealing with demography, the debt and deficit problems which, of course, are on both sides of the or atlantic, grappling with how you cope with increasing

debt, all these subjects we hope by the end of the week to have a number of good ideas which we can deepen over the months ahead. >> host: and, if you would, just overall how does the e.u. approach telecommunications policy with 27 member nations, and how is it different from how the u.s. approaches telecommunications policy in your view? >> guest: i think one of our main challenges at the moment is to make sure europe's digital market gets harmonized. both friends and created ings o. e.u. think the market has brought us a lot of stability and profit and da healthy economy overall, but online this is not the same. and the fragmentation that we find in europe's digital market and sphere more broadly is what distinguishes it from the u.s. where it's actually, you know, one, um, market 6789 and -- market. and i think we need to overcome that fragmentation in europe to be competitive in the world and to provide for the best services

for our consumers, our citizens, for our artists to share their creations and to make the best of what europe has to offer in terms of online content as well. >> host: mr. ellis, you're one to have the founders of the european internet foundation as well. what would you say is one of the biggest challenges facing telecommunications in europe, and what do you do differently than the u.s. does? >> guest: i like to tune in on the same wavelength because where we might just simply put in the 19th century it's the railways, the 20th century it was the airline, now 21st century it's the digital infrastructure asia making huge strides, singapore, south korea, as if money's no object to get the highest speeds for broadband, and my sense is both here in the united states and in europe we don't have the necessary to understand the real importance of having a universal access of information and of

infrastructure to people across the land. so i was at a conference at the woodrow wilson center yesterday where, apparently, there's access for $500 billion. similarly, in europe we now have someone responsible for the dimmal agenda as it's known. but there you see a reluctance of government because of the debt problems, i guess, to invest in infrastructures. but we desperately, i think, need these infrastructures to be really competitive in the global market. >> host: kim hart of "the politico." >> host: thank you for joining us. i wanted to jump right in on what the netherlands is doing on the net neutrality fund. the country was the fist to kind of take -- first to kind of take it forward by banning mobile telephone operators from blocking certain services or paying extra fees for that.

can you tell us a little bit about how that law came into being and what it means going forward for the country and the e.u. at large? >> guest: yes. what we saw was, actually, a shareholders' meeting where one of the members called kpn was sort of bragging to shareholders that they were able to use deep packet inspections, the monitoring of the traffic of their users to identify whether voiceover ip services such as skype were used in order to make sure those services were not competing with their own business model of sending text messages and using cell phone service as we commonly know it 789 -- it. and while that may have been a great argument to shareholders to protect a certain business model, this was something that the users in the netherlands appreciated because they felt potentially free of cost service was actually denied to them. and in principle the belief is that through transparency of knowing what telecom providers

do in terms of monitoring traffic or blocking, consumers have the choice to move. so competition could be a solution to keep the open internet neutral, to have net neutrality safeguarded. but it was soon discovered that actually competitors also use the same techniques to monitor traffic, and that's when initially the government had said we're just going to look whether civil liberties have been violated, so that's an investigation we're doing, but on the competition side we don't see a need for action. and then the parliament actually stepped in, and a majority of parliamentarians said that there was a need to step in to actually guarantee net neutrality by law. and, actually, my political party initiated that motion as we call it. and it ended up being adopted. and so now net neutrality is enshrined in law, and i think what it's going to do in europe is set off a domino effect where

consumers throughout europe are going to be curious whether free services are actually denied to them, whether our telecom providers are monitoring their traffic in a way that actually violates civil liberties and fundamental rights and freedoms. and so i think it will be the start of a bigger discussion. in the e. u. policy circles, the commissioner for the digital agenda that james mentioned, her name is commissioner coos. she has already started the research for an investigation into the practices of net neutrality, and she has said that depending on the outcome of that research or information, she will take action, but she's awaiting that for the moment. >> host: and so you mentioned, you know, the concept of competition and consumers being able to, basically, vote with their feet if they're not getting what they think they should be getting, they can always move to a different competitor. what is competition like in your country or in europe, and feel

free to chime in, are there enough competitors to really allow consumers to go to a different service providers and receive the same amount of service, or is it limited in that way? >> guest: well, in theory i would say that there is competition. there are a number of players. kpn in the netherlands has about 45% of the market share, the previously state-run telecom provider which has been privatized, and the reason that the regulator couldn't step in is because it has no more than 50% of the market share, so that's how our regulators operate after ownership of 50% majority market share, they can step in. but what was found out within hours was that the competitors actually deploy the same practices. and so even though in theory there's a choice, in practice it makes no difference. and i think that is very important when we look at net neutrality. the argument of transparency and competition, i think, is valid. nobody should want colorado

regulation -- overregulation of the internet. i'm very much against it, but sometimes regulation is necessary to keep the internet open, and that's a very different objective to safeguard competition, to safeguard people's fundamental rights and freedoms from, let's say, overregulating for the sake of giving government of control over the internet which is undesirable. keeping competition healthy i think is very much desirable, and the minister in the netherlands quite literally said the telecoms had pushed their luck, and this was why this regulation was necessary. >> host: and, mr. elles, if you would also address kim's question about competition. >> guest: well, i mean, this and in the united king tom we have a rather -- kingdom we have a rather interesting emerging situation from, it's right on the top of the headlines about who owns the media and why they own it. it comes from one specific problem and one specific newspaper, this is a big particular question about how this is going to be regulated in

the future, and i personally feel that the more freedom we have and the less kind of domination of any one particular individual or one organization, we have got a really good opportunity now, i think, to sort this one out. the theme i'd like to come back to is to build on my answer to the last question which was on the fact that the internet is global and that we see a rise of real power in the east, in asia and china, it's often part of the debates in this country and in europe. but what we're trying to look at this week is to see how do we have a transatlantic agenda on dealing with some of these really important issues for the digital sector like cloud computing. how can we have parameters which are based on freedom, access and the quest for information and infrastructure. those other countries we know aren't quite so focused on this type of thing, so how we get an emerging agenda is going to be in the interests of both europe and america.

but sometimes these questions seem to run too much on the american side and the european side. the more we can get a transatlantic debate going on these where we have a similar approach but don't have the opportunity to have these kinds of debates and understanding that our interests are very much in common. we very much hope that we can make a real focus, not just about the transatlantic thing, but about cooperation in a multilateral forum on governance and things like that. it's really important at this particular stage where it may be a chance for the chinese to have their own internet, how do you keep the multilateral system running is going to be a major question for us. >> host: and so building on that idea with there's, because the internet is this global network and the information going on that is just, you know, going by the day how do you make sure that -- how do you handle the

privacy issue, i guess? um, how do you insure that, um, people are using the internet as efficiently as they want to and also trusting to use the internet by protecting what they're doing there, by protecting their personal information? what does, in the u.k. how does the u.k. approach privacy regulation? is. >> guest: matter of fact, look at this on a european basis on protection of intellectual property rights where in the thinking of some where we're thinking if you've got global systems, we need to have a transatlantic market, we have the principle of freedom of movement of goods, services, people and capital right across the transatlantic. so part of that would be proper coordination between the u.s. and the e.u. on protecting intellectual property rights on emerging technologies. secondly, if we can coordinate our positions, the u.s. and the e.u. on our approach to third countries and the protect of --

i sense sometimes the change is so phenomenally fast in the technological sector where we see from facebook and the way in which people place their trust and their information on it and maybe now saying, goodness me, we shouldn't have done that because we're not sure what's going to happen to that information. private companies own the information, they can basically do what they like with it. it's an important point to the protection of privacy and information of individuals which i sense sometimes may be in the political world decisions have been taken, but the speed with which technology moves every time you get a piece of legislation in, the faster pace has moved on. the more we can coordinate our positions together i think the better we will be off. >> host: how will you be able to describe the coordination thus far? i know you trying to increase it, but how would you describe the coordination between the u.s. and the e.u. on a lot of these internet governance

issues? do you think that there's a lot of parity there on some of the things we've been talking about, or do you think there needs to be a lot more discussion? >> guest: well, personally, because if you're starting off from this basis, the internet's global, and that you have real risks of imbalances carrying over to the next decades because you can see the way the trends are going, we need a much more intensified cooperation on these issues. if you're talking to the ambassador from the state department to go through the list of issues, hey, these are exactly the same kind we're dealing with, but we don't have the frameworks at this stage to allow the right kind of people to talk with each other, and as soon as we strengthen these particularly in the political community, the better. >> host: ms. schaake? is. >> guest: i agree that's necessary, but there also some circheses that doesn't -- conferences that doesn't have to be a problem. i think we can be in a good alliance with each other, but each has their own role to play.

when we look at issues such as swift, the storing of financial transaction data of e.u. citizens which are shipped in bulk to the united states to be monitored by a private entity, that leads to serious questions about democratic oversight, and we see sort of a backlash of that on the e.u. side. the other issue is that of fragmentation. james mentioned intellectual property rights. i think that's, indeed, a very important topic but also an area in which europe we need reform in order to benefit from the opportunity that is the digital environment brings to access greater amounts of audiences and to actually use the benefits that the internet has without seeking not to take care of the creators. but we have to rebalance that, and in terms of balance i think this always plays out almost as a rule between -- in the relation between the u.s. and the e.u. that the u.s. tends to have a strong emphasis on security.

we saw this in the war on terror, we see this again in the discussions about cybersecurity where i believe that it's europe's role and also obligation to balance the freedom arguments. there is no such thing as 100% security. we may strive to seek a responsible level of security. it's our obligation to protect the well being and the security of our citizens. but we also must make sure that such measures do not actually strangle what makes the internet and new technologies of such great opportunity and such enhancers of free come. -- freedom. the u.s. is very strong on internet freedom in the international context. secretary clinton is focusing and investing a lot in the development of tools to circumvent censorship, filtering, blocking and to help human rights defenders and, basically, people to freely express themselves, to gain access to information, to

document human rights abuses. i think this is wonderful. but the potential to limit those opportunities also lies in an overemphasis on security and allowing for very, very far-reaching measures into people's private conversations and access to information. so this balance is crucial, and on a positive note i do think that the e.u. and the u.s. can complement each other and really help find that right balance, and they should definitely do that together. >> host: do you see because of what's happening in the u.k. right now with the "news of the world" issue a strengthening of security issues when it comes to telecommunications policy in the e.u.? >> >> guest: well, perhaps not directly related to what's happening in the u.k., but in general. we sometimes are led to believe that internet has changed everything, but in the basis the fundamental rights, human rights and freedoms of people are not

changed, and governments still have to protect those. there's a lot of discussion in the u.k. of whether there's more regulation needed now, whether a special body should be developed, and i think that the judge and the rule of law should, first, do its work. and there's a natural tendency which we see all over the world to have a strong reaction when something goes wrong. the same happens in the cybersecurity discussions. but we must also learn from the past, and i think especially in the u.s. when we look back on the impact that the war on terror had and the damage it has done when it comes to civil liberties and the protection of human rights, that is still not sod. solved. and that balance is very, very important, and the government and politicians like ourselves have a responsibility to protect both. and with new technologies the difference is that a lot of decision makers have difficulty

understanding to the full extent how these technologies impact our societies and the lives of our citizens. and on top of that, the speed of developments in the technological atmosphere are much faster than policy making. i mean, policy making at the moment is running behind the technological developments all the time. while people are talking about downloading and how to deal with that, streaming is the new thing, and the next thing is already looking around the corner. so i think we should work towards framework policies which guarantee human rights and fundamental freedoms within which technologies can develop freely without us facing the need to adjust policy at each and every step because it's simply not feasible. >> host: mr. elles? >> guest: yeah, i think in terms -- and this is all part of a tremendous revolution in which we're living in. often people have quoted guttenberg and the press being

something similar where people had the right to print, and that then gave basis for democracy because you had paper, and you were able to use pieces of information to get people properly informed. what we have today is an extraordinary thing as you were saying, kim, of having access to information at any time from your own machine of information which is doubling, they say, every day or half day or every two hours, the mass of information doubling. so it becomes a question of how do you prioritize your information, how do you get access to information? and as a decision maker saying, and we are in the european parliament on most of the framework laws dealing with e-commerce across the union which is 500 million people, then you've got to get it right. this is one of the roles of the foundation where we work very closely with the internet foundation, we're doing something on privacy and intellectual property on thursday morning, actually, so the idea is not to take suddenly decisions because you get a huge

pressure from one lobby which comes in saying this is the way you've got to do it. guys don't have any, slightest idea about the quality of the discussion, so they might go with that. what we try to do is an all-party approach, getting the experts from the software companies, from all the experts we can do to be able to get better information, therefore, to get better legislation. we want freedom of the internet inso much as you can guarantee it, but you have to guarantee the rights of the people so they can actually have confidence in it. that's extremely important. this is c-span's "communicators" program. our guest this week, ms. schaake is from the netherlands representing the the alliance of liberals and democrats for europe. james elles, a member of conservative party of the u.k. kim hart is from politico. >> host: you just mentioned 500 million people you want to have all of the access and benefits

that come along with the benefit. wireless, i'm sure, is a big part of connecting these people, um, in if all parts rural and remote islands and so on. what is the spectrum situation like in europe, um, as i'm sure you know, that's a big topic of conversation here with the spectrum shortage and how are we going to maximize the use of the commercially-available spectrum in order to make mobile broadband more available. can you tell us a little bit about what that situation is like in europe? >> guest: well, we just worked on a report in the european parliament, i was also involved with that regarding spectrum, because it's a hot topic for us just the same. one of the issues that is necessary now is to actually do an assessment of where each member state of the e.u. stands because we have countries which are economically at a different level which have developed spectrum policies historically in different ways. and so what's necessary, first,

is to assess how, how the situation around spectrum is in each member state according to the same thresholds so that there is an assessment. and i think we must make sure that the new spectrum policy is future-proof, that it allows for the development of new technologies while, of course, safeguarding the use by the military, by certain cultural players. and we're well on our way to look at a more future-proof basis, but also to make sure that the e.u. does act as one global player in, for example, multilateral fora which deal with spectrum and where now there's 27 different voices, different systems, and we must really go in the direction of the e.u. as a global player to be competitive and to be clear about where we stand and to make the wise decisions. and we also looked into the possibilities of being a little bit more flexible with the use of spectrum because, for example, on the part of military

and police services some spectrum is more like a reserve for an emergency situation. some people use spectrum, or some players use spectrum more during the day, others more in the evening, so how can we be flexible and insure that we use the capacity we have and that the people can have their fair share and that we do move along with the speed of technological developments. >> guest: yeah. on that subject last friday i was up in my district at a major company called vodafone, and you could see it on the graphics where people download the stuff and necessarily do so much on the weeks, but then on the weekends so you can see the pattern of people's habits, and it comes through their use in downloading whatever they do or streamlining, streaming the information. what struck me though here was that spectrum has, if you like, stayed still while technology has changed and where mobiles used to be used for voice, now

they're used for videos. i'm told by the mobile operators that, of course, lots of people download, children and adults, but perhaps adults are downloading videos. well, of course that's huge capacity, it overloads the system, people can't use it for voice, it's then difficult if you're going to try to get broadband download. so my area which is quite, i think, a civilized area in europe and in britain, i live in a place i don't have a mobile signal, most people have broadband speed which is less than 1nps which takes about ten minutes to download a page. this is something that comes back to a comment made earlier about digital infrastructure. it's really important for small businesses to be able to do this. and there's a figure out there about a year ago that if we invested 15 billion euros, that's about, i don't know, $12 billion if i got the correction right, but it may be $20 billion, it's something in that kind of area, $15-$20 billion, that you did it for mobile and broadband, you'd probably create

something like over half a million jobs because it's the small businesses which can need to be connected, but they're not today connected other than rather arbitrarily depending on if they can get a signal or a download speed. so i think that here it's really important to get the spectrum right, and that's where the discussions will come as to whether mobile operators should actually contribute to be able to put in some money along with public money to make sure everybody gets coverage. because if you have the internet and it allows you to be a consumer and, therefore, having some dominance over the information that you get, it's kind of bizarre that, you know, it's like buying a car and not having a road. [laughter] you need if you buy a mobile to be able to use it and to be able to use it in any part of the system where you are. >> host: and following up on something you just said in terms of how, whether private companies will combine with public money to be able to build this out, how do you incentivize the private companies and wireless companies to really invest in their networks and

make sure people are receiving the kinds of speeds that you think are more valuable for personal and business use? >> guest: the american state of having a large sum of money and only a small amount the congress will do, my sense is the companies would be prepared to do that so long as it can be economically justifiable. then they'd probably pay less into the treasure treasury on taxes. if it's going to generate business, if it's going to allow people to invest, and that's, i think, what we have to realize. in a global system maybe just can i have a short story of half a minute. one of my local guys said, look, i can't get broadband and stuff. he went off to india, and he said good lord, you know? there are people washing clothes around a lake, i'll never stay here. in three weeks he got broadband three times the speed he could get at home, so he said, i'm staying. so this is just, if you like, one tiny example of the way in which businesses of any size to

be competitive in global systems will take by walking by themselves being able to invest in a place where they can get the right kind of service and the infrastructure. >> host: well, ms. schaaken a recent interview you commented that you don't have wi-fi in your office in brussels. [laughter] >> guest: well, i'm afraid that our institutions are not always as opened up and as connected as they should be. there's a lot of opportunity there both when it comes to simple things as wi-fi, but also when it comes to open data and collaborative policy maybing. i think we, as policymakers, must drag our institutions into the 21st century to be more connected to citizens and to use the opportunities of interaction, connection, communication and collaborative processes that these new media bring. so we have a lot of work to do in our own house as well, and that's actually relevant on a number of issues because we can only be credible in the rest of

the world and credible towards our citizens if we practice what we preach. >> host: and very quickly, mr. elles, what's your biggest frustration when it comes to telecommunications policy in the e.u.? >> guest: i think that it's to do with leaderships. that what we we are seeing now h the body we have within the european commission, we have our dutch commissioner as we were mention anything charge of the digital agenda wanting to be sure we get the right kind of broadband speeds by 2015. i worry personally whether those objectives are not actually ambitious enough given the way in which the global economy is moving so quickly. and it's a frustration that many don't consider digital as being part of the main policy areas. digital is something over there for others, nerds and others who might understand something about these new technologies. we came across yesterday a nice phrase of digital -- [inaudible] of anybody under 25 who's natural because you grow up with it. there's a whole generation of