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It is in this domain, of broken promises and broken people that you can establish what a society is really made of. Graeber's Debt is obligatory reading (alas n

It is in this domain, of broken promises and broken people that you can establish what a society is really made of. Graeber's Debt is obligatory reading (alas not easy to read) if you want to dig into the painful history of debt relations between humans. The post provides excellent insights into the odious side of consumer finance. It feels like a follow up with ideas about reform would not be wasted effort: Once this domain meets the odious side of tech (uncontrolled data collection, tracking etc) the toxicity will grow exponentially.

bettercallsalad 3y ago
I am far from religious, but one thing most religious traditions have common is how they ban usury/interest which would make much of global finance we have today “haram”. You can see the reverse effect too not only at an individual but collective level. Once the religious ethos disappears from a sect, widespread adoption of debt becomes the norm.
- alexis2b 3y ago
  There is also in the Bible the notion of a 50 years periodic Jubilee[1] when all debts would be canceled and the system effectively resets. [1] https://en.wikipedia.org/wiki/Jubilee_(biblical) https://en.wikipedia.org/wiki/Jubilee_(biblical)
  - Interloper2 3y ago
    ha! It may be in the Bible, but Jubilee was never celebrated, not even once.
    - JumpCrisscross 3y ago
      > Jubilee was never celebrated Ancient societies of all stripes had periodic debt forgiveness. Ancient (pre-Christian) Rome, for example.
    - Terr_ 3y ago
      Whether or not it happened exactly as described within the Torah/Bible, we have plenty of records to indicate ancient societies regularly overturned debts. ... Unless you're making a joke that it happened but was not "celebrated" because most people didn't like it.
  - PopePompus 3y ago
    Wouldn't that kinda make it difficult for anyone to get a mortgage during year 49?
    - rthomas6 3y ago
      Oh no!
    - LorenPechtel 3y ago
      Yeah, it would play havoc with durable-goods industries in the last few years of the cycle.
- tacocataco 3y ago
  Money is the new religion. Long live the economy!
- Workaccount2 3y ago
  But debt and interest are both sound concepts, and both are critical towards building an advanced society. Being able to borrow money from the future is enormously powerful.
  - giraffe_lady 3y ago
    All forms of exploitation are incredibly valuable for those with the power to benefit from them.
    - Workaccount2 3y ago
      ...but it's not exploitation. Your head is thinking about bad debt, but bad debt is only a tiny fraction of total debt. It certainly makes for excellent highly memorable emotionally charged stories, which is why we are here, but the fact of that matter is that overwhelming majority of debt is paid off and bears actual fruit. Even debt like student loans, which gets almost universally panned, is still good debt. The ROI on a collage education is ~1000% (amount borrowed/paid off vs. increased lifetime earnings). On paper your are still dumb to not take out student loans to get a degree.
      - giraffe_lady 3y ago
        No I was pointing out that simply because something is beneficial for some people doesn't mean we should want it to exist, which is what I read your comment as saying. Please don't tell me what I am thinking.
        Workaccount2 3y ago
        You're making the argument that cars shouldn't exist because some people die because of them. Like I said, debt is overwhelmingly useful to the vast majority of people who use it. We're not gonna ban cars because a handful of highly emotional road tragedies. We're not gonna abolish debt because of a handful of deranged debt collector stories.
- danans 3y ago
  > one thing most religious traditions have common is how they ban usury/interest which would make much of global finance we have today “haram”. The way Islamic finance avoids interest [1] - the bank buys a property and sells/leases it back to the borrower at a slightly higher price, paid in installments - sounds more like semantics than actually avoiding interest altogether. It seems to rely on a belief that there is a fundamental difference between rent paid on borrowed money (AKA interest), and rent paid borrow the use of real property. The virtue in Islamic banking seems to be that it has a healthy skepticism of financial derivative products, preferring to invest directly in physical assets and businesses. This probably avoids a great deal of risk (trading off the upside too). 1. https://www.guidanceresidential.com/resources/faith-based-financing/what-is-an-islamic-mortgage-and-how-does-it-work/ https://www.guidanceresidential.com/resources/faith-based-fi...
TheOtherHobbes 3y ago
It's worse than that. Some credit card companies - in the UK at least - specifically target people with poor credit scores with rates up to 99.9%(!) And it's normal practice - but utterly perverse logic - to increase the rate of anyone who starts missing payments. Debt collectors can get a court order to put a lien on property, and then get another court order to force sale of that property and repayment of the debt. Of course the collectors bought the debt for some tiny percentage of its nominal value, so this is immensely profitable. The outcome is that if you lend to poor people with poor credit scores there's an excellent chance you'll be able to secure a supposedly unsecured debt on their property and make them homeless, with a huge margin of profitability. There are also ambiguous and murky connections between the debt collectors and the credit card companies which allow the latter to distance themselves from the harassment and aggression of the collection companies. At the same time there's an incredibly toxic combination of wages decreasing in real terms, exploding property prices (both renting and buying), exploitative health care costs, constant ad noise promoting pointless lifestyle spending, and constant reinforcement of the belief that if you're in debt in a glorious economy of freedom and opportunity it's entirely your own fault. It's a perfect storm of financial servitude. The credit industry is just one part of it.
- HeyLaughingBoy 3y ago
  > force sale of that property At least in the US, this is state dependent. Liens are allowed, but many states will not allow a forced sale of your primary residence.
specialist 3y ago
Debt: The First 5000 Years rewired my brain. Debt crisis followed by debt relief is historically normal. Prompting Graeber to wonder if capitalism is inherently unstable. Maybe capitalism somehow requires debt relief (eg jubilees, bankruptcy). Then we should codify it. Instead of continuing to treat them as unanticipated, unfortunate one-offs. Our recurring bubbles and bailouts seem to be keeping with Graeber's thesis.
- elteto 3y ago
  Of course it requires debt relief, things go _wrong_ all the time, that’s just life and how the world works. Debt relief is also necessary for a peaceful society. If you can’t legally discharge debt in some manner we’d have companies hiring enforcers like a shark loan would. It’s not a problem of capitalism, it’s a problem of reality.
  - ToucanLoucan 3y ago
    > It’s not a problem of capitalism, it’s a problem of reality. I'm really not sure about that. > Of course it requires debt relief, things go _wrong_ all the time, that’s just life and how the world works. Yet funnily enough the people on top of all these vast structures sail away from their sinking ships on parachutes of gold (if they're even sinking: a lot of times they just sit and collect vast sums of unearned wealth because they had a lot of wealth already). If debt is such a bad business why are so many massive institutions in it, not discharging debt, and raking in the profits by the shovelful? > Debt relief is also necessary for a peaceful society. If you can’t legally discharge debt in some manner we’d have companies hiring enforcers like a shark loan would. This however we can agree on. As the amount of debts that can be accrued and not discharged (student loans being the biggest) goes up, the economy seems ever more unstable and unsustainable. As it turns out when you strip mine your consumers wallets from every angle, eventually they seem to be unable to buy things for some reason. Then demand craters and your economy stalls. And just to head off this reply I always get in these discussions about useless degrees and STEM and etc. etc., I think to be frank, if indeed we're only interested in financing "worthwhile" educations, then that should be enforced by the financier, no? A bank wouldn't loan you $200,000 to buy a single-wide trailer on rented land, the asset is not now nor would it ever be worth that, so why is a student able to borrow six figures for a again in quotes, "worthless" literature degree, and be strapped to that one decision they made for life?
msla 3y ago
Too bad the economics of the book is so muddled by Graeber's basic errors. https://guilfordjournals.com/doi/10.1521/siso.2015.79.2.318 https://guilfordjournals.com/doi/10.1521/siso.2015.79.2.318
- nologic01 3y ago
  I don't think he needs excuses but his errors and political biases pale in comparison to the systemic hypocrisy and gross inadequacy of an entire profession. Somehow the astrologers advising the emperors du jour have managed to declare themselves scientists and even receive Nobel prizes [1]. The hope is that others will manage to pick up the thread of inquiry and somehow integrate his historical and anthropological observations into a more truthful type of economics. [1] There are always exceptions. A tiny number of economists do seem to grasp the nature of debt and money better than the vast crowd regurgitating banalities.

bettercallsalad 3y ago

I am far from religious, but one thing most religious traditions have common is how they ban usury/interest which would make much of global finance we have today “haram”. You can see the reverse effect too not only at an individual but collective level. Once the religious ethos disappears from a sect, widespread adoption of debt becomes the norm.

alexis2b 3y ago
There is also in the Bible the notion of a 50 years periodic Jubilee[1] when all debts would be canceled and the system effectively resets. [1] https://en.wikipedia.org/wiki/Jubilee_(biblical) https://en.wikipedia.org/wiki/Jubilee_(biblical)
- Interloper2 3y ago
  ha! It may be in the Bible, but Jubilee was never celebrated, not even once.
  - JumpCrisscross 3y ago
    > Jubilee was never celebrated Ancient societies of all stripes had periodic debt forgiveness. Ancient (pre-Christian) Rome, for example.
  - Terr_ 3y ago
    Whether or not it happened exactly as described within the Torah/Bible, we have plenty of records to indicate ancient societies regularly overturned debts. ... Unless you're making a joke that it happened but was not "celebrated" because most people didn't like it.
- PopePompus 3y ago
  Wouldn't that kinda make it difficult for anyone to get a mortgage during year 49?
  - rthomas6 3y ago
    Oh no!
  - LorenPechtel 3y ago
    Yeah, it would play havoc with durable-goods industries in the last few years of the cycle.
tacocataco 3y ago
Money is the new religion. Long live the economy!
Workaccount2 3y ago
But debt and interest are both sound concepts, and both are critical towards building an advanced society. Being able to borrow money from the future is enormously powerful.
- giraffe_lady 3y ago
  All forms of exploitation are incredibly valuable for those with the power to benefit from them.
  - Workaccount2 3y ago
    ...but it's not exploitation. Your head is thinking about bad debt, but bad debt is only a tiny fraction of total debt. It certainly makes for excellent highly memorable emotionally charged stories, which is why we are here, but the fact of that matter is that overwhelming majority of debt is paid off and bears actual fruit. Even debt like student loans, which gets almost universally panned, is still good debt. The ROI on a collage education is ~1000% (amount borrowed/paid off vs. increased lifetime earnings). On paper your are still dumb to not take out student loans to get a degree.
    - giraffe_lady 3y ago
      No I was pointing out that simply because something is beneficial for some people doesn't mean we should want it to exist, which is what I read your comment as saying. Please don't tell me what I am thinking.
      - Workaccount2 3y ago
        You're making the argument that cars shouldn't exist because some people die because of them. Like I said, debt is overwhelmingly useful to the vast majority of people who use it. We're not gonna ban cars because a handful of highly emotional road tragedies. We're not gonna abolish debt because of a handful of deranged debt collector stories.
danans 3y ago
> one thing most religious traditions have common is how they ban usury/interest which would make much of global finance we have today “haram”. The way Islamic finance avoids interest [1] - the bank buys a property and sells/leases it back to the borrower at a slightly higher price, paid in installments - sounds more like semantics than actually avoiding interest altogether. It seems to rely on a belief that there is a fundamental difference between rent paid on borrowed money (AKA interest), and rent paid borrow the use of real property. The virtue in Islamic banking seems to be that it has a healthy skepticism of financial derivative products, preferring to invest directly in physical assets and businesses. This probably avoids a great deal of risk (trading off the upside too). 1. https://www.guidanceresidential.com/resources/faith-based-financing/what-is-an-islamic-mortgage-and-how-does-it-work/ https://www.guidanceresidential.com/resources/faith-based-fi...

TheOtherHobbes 3y ago

It's worse than that. Some credit card companies - in the UK at least - specifically target people with poor credit scores with rates up to 99.9%(!) And it's normal practice - but utterly perverse logic - to increase the rate of anyone who starts missing payments. Debt collectors can get a court order to put a lien on property, and then get another court order to force sale of that property and repayment of the debt. Of course the collectors bought the debt for some tiny percentage of its nominal value, so this is immensely profitable. The outcome is that if you lend to poor people with poor credit scores there's an excellent chance you'll be able to secure a supposedly unsecured debt on their property and make them homeless, with a huge margin of profitability. There are also ambiguous and murky connections between the debt collectors and the credit card companies which allow the latter to distance themselves from the harassment and aggression of the collection companies. At the same time there's an incredibly toxic combination of wages decreasing in real terms, exploding property prices (both renting and buying), exploitative health care costs, constant ad noise promoting pointless lifestyle spending, and constant reinforcement of the belief that if you're in debt in a glorious economy of freedom and opportunity it's entirely your own fault. It's a perfect storm of financial servitude. The credit industry is just one part of it.

HeyLaughingBoy 3y ago
> force sale of that property At least in the US, this is state dependent. Liens are allowed, but many states will not allow a forced sale of your primary residence.

specialist 3y ago

Debt: The First 5000 Years rewired my brain. Debt crisis followed by debt relief is historically normal. Prompting Graeber to wonder if capitalism is inherently unstable. Maybe capitalism somehow requires debt relief (eg jubilees, bankruptcy). Then we should codify it. Instead of continuing to treat them as unanticipated, unfortunate one-offs. Our recurring bubbles and bailouts seem to be keeping with Graeber's thesis.

elteto 3y ago
Of course it requires debt relief, things go _wrong_ all the time, that’s just life and how the world works. Debt relief is also necessary for a peaceful society. If you can’t legally discharge debt in some manner we’d have companies hiring enforcers like a shark loan would. It’s not a problem of capitalism, it’s a problem of reality.
- ToucanLoucan 3y ago
  > It’s not a problem of capitalism, it’s a problem of reality. I'm really not sure about that. > Of course it requires debt relief, things go _wrong_ all the time, that’s just life and how the world works. Yet funnily enough the people on top of all these vast structures sail away from their sinking ships on parachutes of gold (if they're even sinking: a lot of times they just sit and collect vast sums of unearned wealth because they had a lot of wealth already). If debt is such a bad business why are so many massive institutions in it, not discharging debt, and raking in the profits by the shovelful? > Debt relief is also necessary for a peaceful society. If you can’t legally discharge debt in some manner we’d have companies hiring enforcers like a shark loan would. This however we can agree on. As the amount of debts that can be accrued and not discharged (student loans being the biggest) goes up, the economy seems ever more unstable and unsustainable. As it turns out when you strip mine your consumers wallets from every angle, eventually they seem to be unable to buy things for some reason. Then demand craters and your economy stalls. And just to head off this reply I always get in these discussions about useless degrees and STEM and etc. etc., I think to be frank, if indeed we're only interested in financing "worthwhile" educations, then that should be enforced by the financier, no? A bank wouldn't loan you $200,000 to buy a single-wide trailer on rented land, the asset is not now nor would it ever be worth that, so why is a student able to borrow six figures for a again in quotes, "worthless" literature degree, and be strapped to that one decision they made for life?

msla 3y ago

Too bad the economics of the book is so muddled by Graeber's basic errors. https://guilfordjournals.com/doi/10.1521/siso.2015.79.2.318 https://guilfordjournals.com/doi/10.1521/siso.2015.79.2.318

nologic01 3y ago
I don't think he needs excuses but his errors and political biases pale in comparison to the systemic hypocrisy and gross inadequacy of an entire profession. Somehow the astrologers advising the emperors du jour have managed to declare themselves scientists and even receive Nobel prizes [1]. The hope is that others will manage to pick up the thread of inquiry and somehow integrate his historical and anthropological observations into a more truthful type of economics. [1] There are always exceptions. A tiny number of economists do seem to grasp the nature of debt and money better than the vast crowd regurgitating banalities.