The 1% Lend and the rest of us Borrow

The new prominence of debt in rich countries – no novelty in poorer ones – has lately been matched by its political prominence.

In Greece, Portugal and Spain, sovereign debt burdens have driven protesters onto the streets in the tens of thousands and now Cyprus, which may prove the death knell for the Euro. This alwasy happens with flawed idealism, its substantivie hopes areno more than  idealistic aspirations.

 They are indignant at being made to repair their governments’ books through higher taxes and reduced salaries and benefits. In Chile, excessive interest rates on student loans figured among the main grievances in demonstrations throughout the winter.

And the Occupy movement in the US – whose slogan, ‘We are the 99 per cent,’ – has condemned not only the maldistribution of wealth but the related vice of massive consumer debt, in the form of mortgages, student loans and usurious interest rates on credit cards.

Generally speaking, the 1 per cent lends and the rest borrow.

 

What are we to do?  Shoud we/could we tear away the veil of money draped over the world and expose the credit system as so many naked human relationships, mostly violent and unjust.

 

What we are guilty of is a colossal historical inertia, as we are subsumed, buried under the organised domination of debt.

If we conceive  of obligations to each other, we can see that until the advent of money such relations of mutual obligation evade mathematical specification. Only through money do nebulous obligations condense into numerically precise debts, which can and – according to ‘our accustomed morality’ – must one day be paid off.