welcome back to the big picture i'm tom hartman in washington d.c. coming up in this half hour we'll revisit a conversation with great minds i had back in september with dr david graber in that interview dr graber gives the long story on debt not just in america but around the world. a few weeks after this interview aired dr graber went on to be one of the early organizers of the occupy wall street movement so tonight we take another look at what he had to say just before all that began. for tonight's conversations with great minds i'm joined by dr david graber graber teaches anthropology at goldsmiths university of london and has written

a half dozen books that examined issues of culture politics economics and history and as a regular contributor to some of the country's leading magazines including harper's the nation and the new left review in two thousand and six he delivered the melon kosky memorial lecture at the london school of economics an annual talk that honors outstanding anthropologists who have fundamentally shaped the study of culture and this past spring he was honored by the anthropology department at u.c. berkeley his latest book debt the first five thousand years chronicles how the concepts of debt and credit have defined human history and what this means for our current credit crisis in the future of our economy and i doubt our culture for the new york times has described him as a scholar whose books and articles are used in college classrooms around the world and an anarchist who is a card carrying member of the industrial workers of the world and of quote dr graber thanks for joining us from our new york studios. thank you great to have you

with us first of all of you for you to the book just that new york times to description an anarchist and a wobbly i didn't know that the wobblies were an artists and what you know some thoughts on. the one please aren't an anarchist union but actually most while police are america's youth deep down in their hearts ok. you you write that there's no such thing as a free market but rather that cultures and societies organize marketplaces for very very specific reasons can you elaborate on that and what does that mean for us now . well one of the things that really surprised me when i was researching the book is that you know all throughout the twentieth century leaf seen this kind of contest between states and markets and it was all politics were about choosing sides you know what do you really believe in the market or government is best able

to save social problems so we're used to thinking of these as opposed principles but actually if you look at it historically you know societies that don't have states generally don't have markets markets first seem to arise as a kind of side effect of bureaucracy this and for them much of human history there really is a side effect of military operations so the opposition really isn't there in fact i noted in in your book you you talked about how the u.s. debt is really a a war debt in fact do you believe you explicitly call that that there was a graph also in there that compared the accumulation of u.s. debt to to to our military spending to. you know what i mean the u.s. debt originated the cost of fighting the revolutionary war and it's pretty much always been a war debt more or less and it's always been with us too the idea of getting rid of it seems remarkably unrealistic considering it's been here is essentially since

seven hundred seventy six is if we were to get rid of debt would. you know at the national well actually even even before we get to that let's let's talk about you know what debt is a word where did this concept of debt as a an economic construct and as a social construct a regime. well that's another really interesting thing because we're used to thinking of debt is as simply a matter of morality you know i mean good people pay their debts being a decent person is a matter of filling one's obligations obligations that same thing. but there's a strange kind of. if you look at world history there's a strange kind of double think about it because on the one hand people say that reality is just paying your cads on the other hand there's almost no human society that didn't think money lenders were basically evil. the most impossible to find any positive representation of any money lender any time in world history. now how

is that possible what i realized when researching the book is that. essentially debt is when you take a promise and turn it into mathematics normally people do favors for one another they feel in one of the debt in this very broad sense in going when there's doubt but what you know when we're talking about debt we mean something to be precisely quantified as adding money to the matter and you can only really quantify debt when you're in a situation of at least potential violence. and that violence the relationship between the violence and death is what. what shifts over time but i mean to give an example the standard version of where money comes from and we all live in the same school but once upon a time it was border people used to exchange things directly one to the other and that proves inconvenient because you know you say i'll tell you what i'll give you twenty chickens for that cow the other guy maybe doesn't need chickens right now you've got

a problem eventually settle on one thing everybody's going to want to invest money then once you have money you get credit actually you know what history shows is this is not only wrong it's actually backwards credit comes first money only develops maybe a couple thousand years after our first transactions that we have documented with things like compound interest rates that they're very sophisticated credit instruments going around in already in mesopotamia no actual physical cash. now and then finally when you do get border to usually because people are used to using money and suddenly the money goes away so the question if money doesn't come from not where does it come from won't you know but it makes sense that that story wouldn't work because well imagine the community everybody is friends of each other harder story assumes that we're all going to be saying like right i'll give you twenty chickens for that cow to your neighbor now he doesn't want your chickens you can't make a deal but you're his paper filled what really happens in this is what anthropologist

observed is you say wow that's a really nice cow and the guy says they really wanted oh it's on me you know don't worry about it don't even think about giving anything back but of course that's as a pretense really you owe him one and you only him something you know in the favor he might come to you and say nice pig or. whatever he might need three might say you know my daughter's in love with your song or something who knows it could be almost anything so there's people who each other favors now how does that actually turn into twenty seven of these equals four of these which is what money can tell won't normally that happens when people are really angry i mean if somebody were to . turns a gift in return something inadequate you might say about cars really cheap but you're unlikely to come up with a mathematical formula to say exactly how cheap you think that person is on the other hand if somebody gets in a fight with you and your eye is poked out and you know the law codes in the state with societies have

a very detailed list of exactly how much you pay for any type of injury that's when people get exact you know i the law says i get forty seven heifers for that and if not that means war when there is that potential for violence that's when people insist on exact songs and in that context you know you have to say well if i don't have twenty seven heifers what a way substitute that's kind of situation we have to create money so the violence is the is the enforcement mechanism basically for the debt and for the credit how does this i i. used to do a fair amount of business in japan and study the language in the culture. part of a book about it actually about two decades ago and you talk in your book a lot about obligations societies and and i don't recall running across giri and good mood those concepts in your book although i'm guessing they're probably there that the japanese concepts of you know the debt that you're born with the society the debt that you you know the japanese the debt that you're born to the emperor

with the to the it which can never be repaid the the debts i mean in japanese society it's not unusual to keep very very careful track of every gift that is ever given to you because you have to repay it there you know it's all about balance and how do we how would you explain to somebody in a way in in america or in a western culture that is not an obligation or debt base is. at that level that is only at a financial level ha ha how would you explain how that works. not just in japan in a fully industrialized country but also in tribal societies i mean one time was is this not how all human societies worked. well it depends on what sort of relationships but i guess in a lot of the really important ones it's actually important to remain in debt to people because debt in a way it is sociality it is social relations community i mean there's plenty of societies where people are constantly giving each other gifts but you always give

them back something a little bit more a little bit less than they gave you because if you give them an exact equivalent you're saying why don't we want to have anything to do with you anymore you're paying them off transactions over so in a way transactions shouldn't be over everybody should be in debt even in medieval england it was like that i mean ninety five percent of all transactions appear to have been on credit most people didn't even really have physical money it was rare stuff so everybody old money to everybody else and that was considered normal i was considered good as a matter of fact now that notion that you know you owe a debt to society or that your life is a dead to the gods that's kind of another thing now to emerge as especially governments trying to promote that idea. and it's always met a certain amount of resistance people like the idea that everybody knows everybody else that idea that you're sort of born of this fundamental debt to something larger than yourself it's quite interesting most world religions start with that

but then the kind of throw it away. fasting potlatch societies are a variation on this also most native american societies. the lad who was the person who gave away the most got the greatest status and when the paul ash societies collided with european societies which operated in a way that was kind of the exact opposite of that it created some real disasters. or at least i misunderstanding you can refine that a little bit. oh sure well in part much society is very interesting because i mean one of the things about gifts is that you know you keep your supposed to get back a little bit more a little bit less and ideally you really want to give back a little bit more and if you're entering the competition often you want to give back a lot more this is one of the things that always be foggles economists because their prediction is that society is about cash they're going to operate on barter

everybody's going to be acting exactly like they would in the market trying to get as much for as little as possible in they just be doing without money so of course that would be inconvenient they have to invent money in fact when anthropologist went out to see how people actually behave it's not the competition that doesn't exist but often the competition was to see who could give the most not the least. you want to show off what a great man you are and sometimes your real objective is to completely humiliate your rival by giving him a gift he could never possibly repay and there are stories in celtic. greek accounts of celtic societies that when nobles were trying to show off how generous they were it was like a chess game everybody's trying to outdo each other every now and then someone to be totally checkmated they get a gift they couldn't possibly repay and the only honorable thing to do under that circumstance is actually to kill yourself whereupon all the goods are showered on your followers while the only ultimate repose down. i thought also

fascinating the relationship between debt and not financial debt but this kind of obligation is this cultural. debt and credit for lack of a better word and the evolution of the institutions of both marriage and prostitution . oh yes that's really fascinating it seems that every time you get commercial money which is not money that's used to rearrange social it's actually i should explain that. in most stateless societies when you do have money it's not mostly used to buy things and sometimes it is but it's usually not as major function usually it's mainly used to arrange marriages to settle feuds as i was saying and sometimes this is a lubricant of social relations you just show up with your uncle you give him a little he gives you some everybody sort of it's a way of expressing friendship amity goodwill now. as

a result marriages tend to be in the big alliance of families that give lots of the stuff away there's a huge debate actually in anthropology because people say well these primitives are just buying brides and i said no that even though you pay a lot of money to the family you can you know if you were buying a bride you could then resell or of course you can't. however that all changes when you get a commercial economy and especially when you have a debit card what would happen all the time in mesopotamia as people fall into debt and they actually would start taking away their children and their wives so this purchase became well is it a purchase or is it not and then you have the fact that you know appropriate moral sexual relations in traditional societies are one where money has changed hands but what happens to that when suddenly you know you have prostitution and cash being used for buying sexual services becomes a big problem and in fact it becomes really critical all of a sudden to sort of separate who is the good girl in a bad girl in

a way this is how ancient patriarchy seems to have emerged in reaction to the market is even the first accounts of veils in middle eastern society they say well respectable married women have to wear veils slaves and prostitutes are not allowed to wear veils and in fact all the laws the penalty the punishment is not on you know respectable women who don't wear veils that was i assume to be self in force and make us but rather on the bad girls who actually who do as fast say we're talking with dr david greene and we'll be back right after this. what drives the world the fear mongering used by politicians who makes decisions to break through it's already been made who can you trust no one who is in view with the global machinery to see where we had a state controlled capitalism is called sasha's when nobody dares to

ask we do our tea question more. welcome back to conversations with great minds tonight i'm joined by dr david graber anthropologist author and professor. dr graber you talk in your book death about how the social governmental banking compact as it were that followed world war two was basically blown to shreds by ronald reagan and margaret thatcher. can you elaborate on what that compact was and and how it got blown to shreds and what that means for us now. sure well you know after world war two there was kind of a deal it seems it's sometimes called the keynesian deal. between we might say the white working class of north atlantic countries and the people who

actually were running the system musically said look you guys have a history of joining radical social movements cut it out you know if you guys don't become commies we'll give you health care will accept in america we'll give you education for your children will give you social security welfare state and basically citizenship rights were tied to certain economic rights and key to that was not only the recognition of labor unions but an understanding that raises and productivity would be met by risen wages and you can map that out from one hundred forty five to around nineteen seventy five seventy six it started to fall apart that was the case productivity want steadily up in every bump and productivity will play a bump in wages now in the seventy's all of that fell apart and partly because there was what i call a crisis of inclusion essentially if you look at the political social struggles of that period after world war two through the seventy's more and more people wanted

to do the deal. for obvious reasons people said well what about the minority said well we've been left out of all of this this is unfair. people in the global south more and more of them want to do in clue did women want to be included in the rise of feminism and a certain point the back of the thing broke they to simply couldn't provide a reasonable living standard to all those people according to the deal that they had set up and you know you have a crisis and the crisis we had all shopped you had financial shock you had this sort of visions of ecological catastrophe and you know what every part of the world except america called neo liberalism which sort of stars of reagan and thatcher. they basically said ok gold deal is off we got a new deal. the new deal is no longer we'll raise an increase the productivity by increases in wages we'll do an assault on labor unions no longer will political rights mean necessarily having economic rights which meant everybody in the world

got political rights now because it doesn't really matter however. you get credit and what you see during that period is a huge outpouring of new forms of credit everybody supposed to have a four a one k. they're supposed to buy stock they have mortgages considered very important everybody have a house. thus cheap credit had to be provided and the same thing happened in the global south you know micro credit was going to save the third world now. again. at a certain point it reached a crisis if it included and that's what i think the meaning of the subprime mortgage really is they started extending this to more and more people including people they knew perfectly well couldn't really get back. started gambling with it the whole thing turned into a giant bubble and you know we get thrown back into exactly the same structural crisis we had in the seventy's we have oil shock then financial frock you have visions of ecological catastrophe saying that true but the sort of mindsets exactly the same i guess the question is what's next well and you just said the the the old

deal which we could call f.d.r.'s new deal that deal of a strong middle class. was no longer viable by by by the by the notions of reagan and thatcher basically. would it not be more correct to say that it was because there was so many people who wanted to be included in it was breaking the back of the deal would it not be more accurate to say that it was that the deal was no longer viable if there was still to be a and over which class. well yes exactly i'm not saying it isn't the going all the hole that they would have had to change the economic system and in fact not only did they have a new bridge class but they had a new bridge across which seemed to want more and more of a share of the pie which in fact since reagan and thatcher they've been getting i mean the division of wealth has been dramatic as specially in america the impact

has been a spate of massive lowering cost mobility people don't seem to realize that we're no longer nearly as much a land of opportunity as we used to be places like sweden actually have much higher class and ability than we did in fact among the thirty four e.c.u. countries i think we're either at the bottom or the next to the bottom in terms of terms of class mobility in the u.k. it's there next to my living room yeah exactly oh i know it so the india toward the end of your book at the essential call for action that i got out of the book. was was one not unlike herman daley's and some other economists who have looked at those and that's basically a call for jubilees the whole concept of rebalancing everything. you can afford that you almost call for it you want to explain what jubilee is how it came about and is there an application of it to modern day life. oh you know the saudis actually just did it that was their reaction to this arab

spring which a lot of it was really goes back to concerns about the effects of microcredit kind of i just eliminated all the. yeah they canceled the debts so it can be done i mean obviously they've got a lot of money but you know we can print money to we make money for the united states. now. what i found in the history was that the world has kind of goes back and forth there's periods dominated by credit money. virtual credit money we think it's a new thing but actually it's the original form of money there's periods were dominated by cash or people assume gold and silver really is money now periods dominated by credit markets such as the one we've really been entering into since maybe one nine hundred seventy one when nixon went off the gold standard tend to have institutions designed to protect outer space the problem is now once you accept that money is just a promise it's just an iou kind of set of social arrangements what's to stop the thing from going crazy and getting totally out of hand and particular peculiarly

what's to stop one or two percent of the population from essentially turning everybody else into debt it's now. in a way that's the great social evil that everybody's afraid of throughout human history was people would start falling so deeply in debt they'd sell their wives and children into slavery to sell themselves into slavery now now in a way american situation isn't that different we are renting ourselves out to the guys who are predators but perhaps not selling ourselves but i mean i'm wrong here the ancient greeks would not have. been greeks would not have recognized that much of a difference so ok what they tended to do was set up some mechanism to make sure it didn't go crazy society didn't start this breaking down. and jubilee was one of them to clean slate mesopotamian rulers used to just declare ok debt freedom all that is go home all debts are council and you start again. that was in the bible

and it was every seven every seven years and every forty nine years and that's ridiculous. yeah and that was of absolute fixed rule it didn't stop the economy from developing i mean the plowed a long way and in the middle ages they tried to different approach they got rid of interest bearing loans entirely and at the image but there always got to be something now i thought to do. believe might be nice because it would knock home the reality that you know once we moved into a period of virtual credit money or money some punch of promises it's not a thing it's a series of commitments we make to one another and if democracy has to mean anything it means that we can renegotiate that and after all what we found out in two thousand and eight is if you're a i.g. if your bank of america of course they can renegotiate it they can make trillions of dollars of debt disappear won't that we know they can do it for the big players let's do it for everybody and start over and and. i've certainly sounds like an interesting idea if we were to simply is reboot i mean the him the amount

of money that the fed loaned to the of the large banks hers was you know more than a hundred percent of g.d.p. it certainly would have been enough to pay off all the mortgages in america is that the kind of thing you're suggesting and all the credit cards exactly exactly i mean in if they had paid off all the mortgage it would have had the same effect so they chose to pail out the banks without bailing out the little people even though if they had bailed out the little people that itself would have bailed out the banks do you see any possibility that that that kind of jubilee i mean in saudi society is is you know autocratic and indicating that you know whatever i mean is the end probably not run by the banks or is increasingly it seems like we are in the two minutes we have left here thoughts on and now this might actually be a viable idea for the united states. we've got a long way to go obviously i mean and because you're right we have a total capture of the political system both political parties are effectively in

the pocket of the bank speak and the class of hedge fund managers corporations which are all in the financial business now so in a way almost all large corporations are funding for corporations. it's a problem. seems we need a some sort of bottom up social movement the one thing hopeful i can say is that in the past that is what's always happened when you have periods of virtual credit money it will happen eventually if history rings true and you can see stirrings of it if you go to europe and greece and spain there's people coming out to the plazas saying this is ridiculous we reject all political parties we need to start over i think we need a conceptual break and a financial break would be the easiest way to get that across in the people are increasingly starting to call in them in the minute we have left iceland just twice now has voted not to pay off their banks or is that the kind of thing in china. exactly and they're doing great i mean ireland decided to pay everything and they're going terrible shape iceland said no and they're doing fine and so we could

say to the banks to our bankers or to the i.m.f. and everybody else you know sorry it's just going to happen that's it's yeah you just kicked them out of love to east asia latin america they kicked out the i.m.f. i mean we could do it yeah and argentina have to run two thousand and one as i recall it's various they're doing quite well right now indeed dr david graber thank you so much for being with us tonight. my pleasure to watch this conversation again as well as other conversations with great minds go to our website conversations of great minds dot com that's the big picture for tonight for more information on the stories we covered visit our website to tom hartman dot com free speech to organize dot com also check out our two you tube channels there are links over at tom hartman dot com this entire show is also available as a free video podcast on i tunes and we have a free time part of an i phone and i pad app in the app store you can send us feedback at twitter at tom underscore hartmann on facebook at tom wonders for our

blogs message boards and telephone comment lines all over a target. and don't forget democracy begins with you get out there get active tag you're it see you next year. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realized everything you thought you knew you don't know i'm tom harpur welcome to the big picture.

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