Public Banking and Taxing the Wild Frontier: Part Four

In the period following the ratification of the federal US Constitution, the financial course for the new nation had yet to be charted. Alexander Hamilton had a dream to turn the former colonies into a modern mercantilist nation on a model he borrowed from the British and its Bank of England. His idea would succeed with flying colors, but few truly understood just what he had done to make banking so indispensable to the health of this new form of economics. It would take decades for the nation to warm up to the idea of banks as an everyday feature of American life, but by that time, private banks would dominate the landscape and the old civic-minded banks would be a distant memory.

People were highly suspicious of the purity of Hamilton and other speculator’s motives, and rightfully so. Populist anger the elite eastern “stockjobbers” was well-founded, the blanket rejection of banks and all financial schemes was, however, foolish. Banking (especially of the public variety) would prove to be so successful that its detractors would come around in the long run, but the damage would already be done by that time. The option for government involvement in banking was besieged and destroyed in the first decades of the United States, that is, until the populist farmers realized that bringing banking into the government was the best and perhaps only defense against the insatiable greed of Wall Street bankers and industrialists in the antebellum nineteenth century. In hindsight, keeping public banks around was the best way to prevent gross economic hardship, but the battle-lines were drawn differently in these very different times.

The revolts and minor uprisings that occurred in this time period were all debt related. Traditional debt relations were far more fluid and amenable to the needs of common villagers before modern economics took a hold of them. The soldiers and suppliers of the Revolutionary War had not been paid. Their expedients for trade were dashed. Their protests were quelled. Before 1787, farmers outside of the merchant city regions had the benefit of the state’s former issuance of paper money to stimulate business. They began as a war-time expedient during the seven-years-war but remained afterward to everyone’s joy. In a frontier land lacking in specie (metal coin currency), paper money was a godsend. But the new constitution forbade the states from issuing any more colonial scrip and centralized the money-making function within the new federal government. The very first articles of the US Constitution are explicitly designed to prevent states from issuing their own ‘bills of credit’ and instead enshrine the return of the economy to a hard currency basis. The framers worried about the inflation these bills created, but paper money would come to dominate the economy anyways in the form of bank notes.

If bills of credit or paper money could no longer be used by farmers, then they were stuck with hard specie scarcity. Their business was less connected to the world at large, so metal money was harder to get their hands on.On top of that, exploitation by speculators, who sensed their desperation only to capitalize on it, added to their affective loathing of all things financial coming from the coastal port cities. Upon reading accounts of the financial hardships of American farmers and poor debtors, laid out in the previous post, it’s easy to see why they would be driven to such hate. But every actor needs a circulating medium of exchange to lift their fortunes. The distrust of a banker-government partnership inculcated during this period of history went a long way towards eliminating the necessary checks against the money-creating power of private banks. The banks role in controlling the increase or decrease in the overall supply of money could only be effectively curtailed and controlled by a central governing body endowed with financial powers like that of a bank. Distrust and anger at central government and public banks actually hurt prospects for economic justice by empowering private banks to carry on this highly profitable enterprise free of restraint.

Bray Hammond sticks the point well at the beginning of his grand history of banks in Banks and Politics in America: From the Revolution to the Civil War:

“The agrarian demand for paper money and easy credit which did at last appear in the States in the latter part of the 19th century arose from tardy recognition by the agrarians that they lived in a modern economy, not in dreamland, and in order to hold their own must use credit as business men did. It arose from a slow realization that farming must be a means of making money, not of withholding oneself from the world… But in the face of business enterprise and industrialization, it became impossible for farming to remain unchanged. Stock had to be improved. Machinery had to be acquired. The elements of farm capital became diversified, the land itself ceasing to be the one ingredient of weight. Money and credit forced their way into the farmer’s reckoning.” (Hammond, p.33)

It’s at this point that a shift in emphasis must ensue. A different country than the one Jefferson envisioned was taking shape around the turn of the 18th to the 19th century and we cannot simply remain pitted against all financial concoctions wherever they crop up. The future involves banks and they need to be made to work for the people or the vast majority instead of fought at every turn. The makings of a modern economy were shaping up at this time; increased specialization in the workplace and the overriding importance of overseas trade in the international game of political economy was drowning out the small farmer’s hope for New World of freeholders. The cat was out of the bag.

The scars leftover from Federalist era lingered on into the Jacksonian era of Democratic entrepreneurialism until the producing farmers figured out how debt, monetary policy, and banks effected them on the national level many decades later. The populist party sought to take over control of the money supply away from banks in the late eighteenth century with their ‘sub-treasury’ system and the non-partisan league would successfully lobby for a state-owned bank in North Dakota. But no movement in America has been able to sustain a public-oriented financial school of thought in the tumultuous times that capitalist industrialism wrought at the end of the 19th century, 20th and up until today. We have a moment right now to establish new public banks with the growing momentum of the public banking movement. It is high time that certain truths about banking become a part of common wisdom and used for the benefit of the 99% instead of the exclusive gain of the 1%.

Hamilton’s Bank of the United States was lauded by all those who understood it. It not only flipped a liability in high war debts into an asset (quite literally), it spread new money out into the economy whenever loans were dispersed. It’s bank notes functioned just like money, similar to the paper money of colonial scrip but more like state bank notes also circulating, so it increased the amount of business that could be done in two separate ways simultaneously. It offered credit for new projects in a typical lending fashion and then, as a result, bank notes could be drawn on representing the promise to repay the debt. These notes were basically paper IOU’s for the original loan/deposited coin (more on this later), but they would inevitably change hands many times in the course of business and effectively enter circulation as money. This is the what makes banks so hotly contested: they don’t just offer loans and act as special intermediaries for future business (though they do that also), they increase the amount of money in the system as a whole so long as they remain solvent (i.e. have enough hard currency to back up the notes that come back in for redemption, or withstand the depletion of specie from their vaults). That these bank notes could be used to pay federal taxes enhanced their acceptability as legitimate money.

Absent regulation, this operation is fragile and private banks are incentivized to extend credit wherever they can profit. The increase in available paper bank notes/IOU’s increases the amount of money passing from hand-to-hand in the general economy, even if you as an individual do not have an account at that bank or any bank. Those paper bank notes can always be redeemed at a local branch of the corresponding bank for hard coin in the vaults, that is, unless too many notes come in for redemption at once and the vaults are depleted.Provided the bank remains solvent, the net effect on the economy at large is immense. Having more things getting passed around as money lifts up the general economic prospects of every actor in the system, provided that the amount of notes issued are commensurate with the overall level of real economic activity. Issue too many and you get price inflation, too little and prices drop but there is less money around to get your hands on.

The national public bank of Hamilton was able to check the excessive issuance of bank notes in the way that a central bank does now. Today central banks are independent of government and merely transfer money from one bank within its system to another in the form of reserves in their central bank accounts. The first and second Bank of the United States operated slightly differently but also kept private banks and state banks that existed before them from collapsing in a heap of panic, rendering its notes useless and its contribution to the overall money supply vanishing in a flash. It made sure that the ratio of bank notes to reserves didn’t get too high and private banks couldn’t print way more notes than they could back up with coins. The first Bank of the United States, Hamilton’s bank, operated in a time when the split between public and private sectors was not so pronounced. Many believed that private investors were needed to lend credibility to the institution in the first place, the government being too young and fragile to instill any confidence. But it was a public bank that served the needs of the people at large by servicing the new and fragile government’s debt and hence its credibility as a future borrower. It increased the supply of money to stimulate industry by issuing its own US Bank Notes that had a wide circulation.

Banks whether public or private wield enormous power by controlling the size of money in the economy at any given time. This is not always well-understood by economists but when banks make loans they increase the amount of money flowing through the economy. Bank loans create more money, paying back those debts created by the loan destroys it. It’s an extraordinary tool within a modern economy and there is no reason why governments shouldn’t be involved in banking when it plays such a vital (and lucrative) role. This is what Hamilton’s bank did before private businessmen and entrepreneurs started opening up their own banks and attacking the national bank. In another one of histories ironies, it was farmer’s opposition to the Hamilton’s policies that killed the second Bank of the United States when Andrew Jackson swept into power. Little did they know that this national, central bank was the only thing preventing private banks from wildly profiting off of the economy’s need for credit, in turn playing havoc on the money supply. The full story is told in Bray Hammond’s standard financial history book in Banks and Politics in America from the Revolution to the Civil War.

According to Hammond, Hamilton did understand this crucial function of banking. It’s quite possible that only a handful of individuals grasped this operation and its significance and few understand it still today. The fact that banks create money, control its supply (in a more-or-less/marginal sort way of increases or decreases from day to day instead of absolutely), and perform a systemically vital function to a dynamic modern economy escapes contemporary economic textbook definitions of banks as mere “intermediaries.” If we replace the terms of 21st century economics with ones from the 18th century, we can still detail the same banking function:

“…[I]n the sentence before his explanation of specie deposits, Hamilton had made the observation that every loan which a bank makes is in the first instance a credit on its books in favor of the borrower and that, unless withdrawn in specie, it remains a liability of the bank till the loan is repaid. In these words he explained 20th century banking as will as 18th, and how bank lending creates bank deposits, with the difference that he did not call them “deposits” but reserved that term for specie transactions, distinguishing credit for specie from credit for the proceeds of loans. He did so because he observed banking in terms of the individual bank and not of many banks constituting a system. He was writing at a time when there were three banks only in America, each sole in its community. The effect each bank’s lending had on its own positions was in those circumstances direct and unobscured; its loans obviously increased what would now be called its deposits; for the checks drawn on it were not being deposited in other banks nor were the checks drawn on others being deposited in it. Each bank was a closed and separate system. Hamilton simply noted what in the then situation was plain and required no unusual discernment. The records of the Massachusetts Bank indicate how common it was at the very beginning to credit borrower’s accounts with the amounts lent them; and the known figures of deposit liabilities are plainly too large to have arisen from specie alone. Such credits seem in practice to have been included with deposits proper but in discussion to have been kept distinct. A deposit was of something tangible, whether for safekeeping or to apply on a capital subscription. The liability for amounts lent was called credit or book credit, as by Hamilton in the passage in which he described the procedure.

Though exempting specie deposits from the restriction could scarcely have given a bank any more inducement than it already had to acquire specie; it doubtless seemed logical to Hamilton that the liability arising from deposits of specie be distinguished from the liability representing the proceeds of loans and that it be excepted from limitations on an expansion that could occur only when liabilities were assumed in excess of the specie held. The issuance of notes and the crediting of customers’ accounts might and did entail the assumption of liabilities in excess of specie holdings, but not when the issuance of the credit resulted from a deposit of specie.” (Hammond, p.138-9. Emphasis mine.)

In other words, when a loan is made by a bank it doesn’t matter that there isn’t enough corresponding metal coin specie to match it one-for-one. Taking in deposits or specie to store in its vaults and making loans to those seeking credit are two separate functions of banking that work in tandem but don’t require a steadfast equivalence. When a loan is made, the amount of money requested by the borrower is written into their account, which they can then draw on regardless of how much specie that individual has deposited on their own. The only thing that matters is that people don’t rush in and grab all of the hard currency all at once in a panic. As long as the bank is believed to be trustworthy, it is. The bank can then keep on lending as much as it likes (more or less), printing more of its bank notes (no doubt to change hands many times), and profiting off of the regular interest payments coming in from the borrower. It’s this ambiguity that leads people to call banking a monster of instability playing fast and loose with our money. Within the accounting format called ‘double-entry bookkeeping’ is the ability to measurably increase the overall money supply by entering numbers on a piece of paper during the loan making process. Whether those two sides read ‘asset/liability,’ ‘credit/deposits,’ or ‘bank credit/specie capital’ is insignificant. It’s in the proportion of one to the other that the fluctuations in money supply increase or decrease, but the ratio itself was fluid in the early days of banking.

“The practice then was less conventional than now, for then, taking advantage of the fact that every item on a bank’s books has both an asset and a liability aspect, it might be called either; whereas now every item belongs rigidly on one side or the other. Thus deposits were sometimes what a bank held and sometimes what it owed; and circulation represented money lent as much as money owed. There is a modern parallel in the fact that bank credit may be measured either in assets or in liabilities, and though the statistical practice of measuring it in loans and investments is now well established, deposits are often taken informally as its measure, and the law provides for its control through the ration of reserves to deposit liabilities.” (Hammond, p. 141)

Banking reform would later come in the form of reserve ratios to restrict the amount of loans on one side of the page to the reserves on the other side. Playing with this ratio became the way to check bank’s influence on the economy at large and prevent collapse of banks who greedily issued to many notes without having enough coin to back them up. But fixing reserve ratios as a universal standard did not and does not provide an effective restraint upon the banking system in general. This method assumes, falsely, that issuance of loans comes attached to the specie in the vault when they are actually two separate functions within a bank. The ratio can go up or down and still be left in tact. What matters is that the confidence trick in the bank’s vaults is upheld and people don’t collectively make a run on the bank. As Hammond explains above, it doesn’t really matter if you focus in on the amount of deposits at the bank or the amount of book credit granted by a loan. They are two separate things that have been joined together within the marble walls and pillars of the bank so that a single thing (money) can be multiplied and dispersed where businesses wants it to go.

The Bank of the United States performed this function in a controlled, centralized manner that serviced a fledgling nation. It’s not so absurd to say that without it, the United States might have crumbled in its infancy under the surrounding colonial European powers and its own war debts. Hamilton’s Bank serviced the interest on the debt, enhanced the credibility of the United States of America abroad, stimulated business, and acted as an early-modern regulator of the banking system.

“its prominence as one of the largest corporations in America and its branches’ broad geographic position in the emerging American economy allowed it to conduct a rudimentary monetary policy. The bank’s notes, backed by substantial gold reserves, gave the country a relatively stable national currency. By managing its lending policies and the flow of funds through its accounts, the bank could — and did — alter the supply of money and credit in the economy and hence the level of interest rates charged to borrowers.

These actions, which had effects similar to today’s monetary policy, can be seen most clearly in the Bank’s interactions with state banks. In the course of business, the Bank would accumulate the notes of the state banks and hold them in its vault. When it wanted to slow the growth of money and credit, it would present the notes to banks for collection in gold or silver, thereby reducing state banks’ reserves and putting the brakes on their ability to circulate new banknotes. To speed up the growth of money and credit, the Bank would hold on to the state banks’ notes, thereby increasing state banks’ reserves and allowing those banks to issue more banknotes by making loans.

The Bank’s branches were all located in the fledgling nation’s port cities. This made it easier for the federal government to collect tax revenues, most of which came from customs duties. Locating the branches in ports also made it easier for the Bank to finance international trade and help the Treasury fund the government’s operations through sales of US government securities to foreigners. Furthermore, the Bank’s branch system gave it another advantage: it could move its notes around the country more readily than could a state bank. The Bank’s branches also helped to fund and encourage the country’s westward expansion, particularly with the establishment of a branch in New Orleans.” [Federal Reserve History Website]

So the utility of this bank is without question. More than a money-making machine for a handful of investors getting fat off collecting interest payments, it actually prevented the excesses of banks from spiraling out of control and wrecking the greater economy – as would happen many times after the two banks were killed. In its virtuous civic function, The Bank of the United States was almost an “anti-bank bank” that looked after all actors within the bounds of the nation instead of a small faction of wealthy investors. The number of those kinds of banks would multiply very soon and the network of private banks would come to dominate the American economy to this day. Had the Bank survived, industry would have progressed much more steadily and without the chaos of epidemic bank failures, greatly reducing the severity of depressions that jaded so many Americans. One can imagine the despair and resentment of a population left holding worthless pieces of paper that used to be as good as money, failing to understand what exactly had gone wrong.

It’s worth looking at how this bank was incorporated, if only to admire the grandeur of an intelligent plan conceived on paper but willed into reality. With the war debts exceeding $150 million from the federal and state treasuries combined, interest payments would need to be effected soon. Direct payment with taxes would have crippled an economy that didn’t have as much specie available to do business as is, with outlying farmers feeling this pain exceptionally. The bank would offer to the public a subscription for future stock of the bank to the limit of $8 million, with the federal treasury owning $2 million for a total of $10 million. The federal government would own one-fifth of the bank and private citizens would make up the remaining four-fifths, drawing interest from the scrips they bought. Once enough specie was collected (which it was almost immediately), the game was in play and debt servicing could commence on the basis of that hard currency.

“Though the authorized capital of the Bank was $10,000,000, of which $2,000,000 was to be paid in specie, the Bank was permitted to organize as soon as $400,000 had been received from the subscribers. Whether much more was ever got from them on successive installments is doubtful, though the Bank subsequently accumulated a treasure much in excess of what the stockholders were supposed to pay. Payment for the government’s stock was accomplished under an authorizations in the charter that was taken over almost intact form Hamilton’s proposal and was presumably intended by him to give the appearance of a cash payment. In effect the Treasury drew for $2,000,000 on the United States commissioners engaged in selling government securities in Amsterdam, deposited the drafts with the Bank, and then drew against the deposit to pay for the stock. Technically this consummated the purchase of the stock with funds borrowed in Europe. But it was not desired to have the drafts go through and the specie shipped from Europe, because it would have had to be shipped back for other purposes. So the Treasury borrowed $2,000,000 from the Bank and used the amount to take up the drafts on the commissioners, with which the whole transaction had opened. The net effect was therefore to leave the government in possession of $2,000,000 of Bank stock and in debt to the Bank for $2,000,000, though technically the money owing to the Bank had not been used to buy the stock but to “restore” the funds in Amsterdam which had been “used” for that purpose.” (Hammond, p.123-4)

It was a kind of trick that can work with the use of a public bank and the stability of a government combined. Only enough specie needed to be acquired so that those who needed it could draw on it when they needed it. The rest of the subscribers, including the treasury, kept their accounts on the books and waited for the interest payments to come in from regular installments. The one-fifth of the bank that the government owned it didn’t actually pay for, it borrowed the money from Dutch financiers already keen on these machinations. Instead of physically transferring specie hand-to-hand, agents of the treasury gave to the Dutch paper promises to pay later. They then used this borrowed money to buy bank stock (which earns interest) and pay off the imbalances of the account as time goes on. It all works because there is enough specie to be drawn out of the bank on occasion, allowing the pretense of convertibility between metal money and paper money to persist. People trusted that there would be enough business in America for these accounts to be settled in the end because there was so much nascent potential on the American continent, the bank allowed them to push paying off debts forward into the future by playing with this divergence in forms of money. Essentially, it was a leap of faith on everyone’s part:

“The early Americans were short of capital, particularly capital in the form of gold and silver. If that dearth of gold and silver had been allowed to hold up their formation of banks, the circle would never have been broken; instead they resorted to arrangements which had the practical virtue of establishing the proper procedure in principle if not in fact. And in time, because the pretenses worked, they accumulated the gold and silver and made the principle a reality. It is a case where a pious lifting of oneself by the bootstraps is preferable to cynical realism or conscientious passivity. And for the most part a saner and more honest practice in capitalization established itself as soon as a surplus of wealth made it possible. Without the initial act of faith, so to speak, the surplus would have been slower in coming. The Americans had declared their political independence before it was a reality, not after; and what they did in the matter of financial competence was much the same.” (Hammond, p.124)

It’s the complexity of the move, the juggling of many different obligations all at once, that makes people resort to religious terminology to explain what in the world just happened before their eyes. But all parties simply had enough trust in the ability for a national government to persist in a stabilized capacity, collect enough taxes, pay investors their installments of interest, and receive the required initial subscription to kick things off. Hamilton was also an eloquent speaker and assured congress that his plan would work. He was right and he knew it.

The Bank of the United States brought together private business and public regulation together at a time when both needed each others help. The bank and public banks like it expanded the total money supply in a controlled and regulated fashion, while giving the government the means to pay off its own debts. When the treasury was forced to liquidate its bank stock, it profited for “$672,000 or 30 per cent, and the dividends it received while shareholder were $1,100,000.” (Hammond, p.207) Public banks are very profitable for the governments they represent, but they partner with the other banks and keep them from stashing these profits all to themselves. If large projects are to be effected without a public bank to borrow from, private banks pocket the interest from that demand for funds. Since banks create money, owning one means you can essentially borrow from yourself, like the confidence trick of the Bank of the United States.

The expediency of the bank can be mimicked in our own day and at the state level. Having a public bank for each state would stabilize the rest of the banks of that state by providing additional money to borrow at lower interests. Interests rates could be lowered across the board, or raised if too much business activity is causing inflation and over-extension of credit; and there lies the great hope: a regulated banking industry unbeholden to the insatiable demands of unchecked private banks. This is not a faux-public central bank like the federal reserve, but one that really works for the people by relieving the strangle hold that private banks have on the creation of money. Governments don’t have to be debtors begging for money to start their projects, slashing public worker hours and benefits, stagnating wages, and paying huge amounts of interest to private bankers when they own their own bank.

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Kaepernick’s Protest Goes Right to the Heart of American Nationalism

At first glance, meaning a week of media uproar, I dismissed Colin Kaepernick’s mild protest of standing up for the singing of the national anthem as unimportant. The patriotic among us would denounce his disrespect of the flag, the agitators and progressive among us would back him up for his right to protest, and the whole thing would blow over. It may well eventually do just that, but the issue had a stickiness to it that lingered on longer than I had expected. Perhaps I am just to close to the center of the discussion in the California Bay Area, perhaps the mainstream media was attracted to a heated debate about a patriotic symbol (the patriotic symbol?) during the lead up to the 2016 election, perhaps forcing the talking heads of the sports commentators to make a statement on the issue fueled the fire for longer (considering how much football Americans watch), but perhaps this simple refusal to stand was a brilliant move to catalyze a movement to change America to its core. Just maybe this simple act of of protest cuts through the sort of media hype that seizes on a hot-button issue like a pack of ravenous wolves and has nestled its way into the heart of the national consciousness. Continue reading “Kaepernick’s Protest Goes Right to the Heart of American Nationalism”

The Students for a Democratic Society and the Legacy of the New Left

During his introductory remarks to a panel at the recent People’s Summit, Juan Gonzalez of Democracy Now! drew comparisons between popular political mobilizations on the left today with those of the sixties. [Juan Gonzalez to the Bernie or Bust Movement: Don’t Repeat the Mistakes in 1968 that Elected Nixon] (Short clip) The Students for a Democratic Society (SDS) were the exemplary institution of the new left and their efforts are generally thought to be the beginning of a shift in leftist political tactics. They sought to reinvigorate citizen political action and conducted new experiments in democratic organization, bringing many invigorated young people into political consciousness and helping create the political tumult of the sixties. Gonzalez explicitly referenced this movement when he compares them to the Bernie Sanders campaign, hoping that we will learn the lessons provided by their attempt and, what Gonzalez believes to be, their failure. But who were these people and what moved them to play such a role in politics? Was their upstart institution and the ideas that formed it a failure upon which we can blame the election of Richard Nixon as Gonzalez claims? Is the implied conclusion that #BernieOrBust supporters should fall in line with the establishment left and a neoliberal Hillary Clinton justified and have we actually gained anything from the radical “participatory democracy” philosophy of the SDS? Continue reading “The Students for a Democratic Society and the Legacy of the New Left”

The Function of Violence

Hannah Arendt has a short book called On Violence that appears to be the closest thing she ever wrote to a pamphlet or zine for mass distribution. In the middle of the book is a glossary of sorts for some key concepts that get thrown around in political discourse haphazardly: power, strength, force, authority, and violence. I understand her desire to set the matters straight on these words’ meaning as an attempt to prevent political actors, people willing to take meaningful and directed political action, from falling into ideologically sterile beliefs or patterns of behavior that would disable that political action from taking effect. Continue reading “The Function of Violence”

Socialism and/or Populism in America

Both Socialism and Populism have been invoked during Bernie Sanders’ presidential campaign run and this has led to no small amount of conceptual confusion among the American people – myself included.  His rhetoric and record as a senator has been overwhelmingly anti-Wall Street, pro-worker, and, well, popular, so when I heard the label “Socialist” coming from the more conservative side from the mainstream media I thought it was another scare-tactic and then embraced it as a possible cure for our neoliberal malaise of debt-fueled Superimperialism [Michael Hudson’s latest on US Neoliberal Empire].  His brand of Socialism isn’t the type that conservatives would have you believe though, many avowed Socialists have even distanced themselves from Sanders.  It came as somewhat of a surprise, but more of a moment of clarity, when Douglas Edwards (@SebastosPublius) tweeted to me that he is not in fact a Socialist but still demands support from the left in the way he steers the conversation in the media away from compromise with wealthy financiers and corporate giants embedded within the political process [How Wall Street Is Burning Democracy]. Continue reading “Socialism and/or Populism in America”

Saturday Night Socialism

I attended a speaker series in Oakland last Saturday and saw avowed Socialist Seattle City Council member Kshama Sawant, Chris Hedges, and Richmond progressive city council member Gayle McGlaughlin (who spoke in exactly the opposite order). What I didn’t realize from reading the posters strewn about Oakland is that it was put on by a new party (I think) called the Socialist Alternative [http://www.socialistalternative.org/about/]. It had the look and feel of a new party and perhaps will become a force but it was rather surprising to see a big organization (or at least an organization with big plans) appear in my region for a fairly big leftist event without my foreknowledge of its existence. Maybe I’ve grown slightly out of touch, but this experience had some teachable moments that go a long way to demonstrate the political deadlock and new hope that we are living through at the moment in terms getting to a moment of transformation in the most powerful country on earth. Continue reading “Saturday Night Socialism”

The Forces of Nietzsche vs. the Humanity of Graeber: part II

The second essay of On the Genealogy of Morals begins tellingly as we immediately get a reflection on the act of promising, memory and forgetfulness. Before the topic of guilt, morality, the bite of conscience, and even the blunt trauma of punishment, Nietzsche writes:

“[t]o breed an animal with the right to make promises – is not this the paradoxical task that nature has set itself in the case of man? is it not the real problem regarding man? … Forgetting is no mere vis inertiae as the superficial imagine; it is rather an active and in the strictest sense positive faculty of repression… a little quietness, a little tabula rasa of the consciousness, to make room for new things, above all for the nobler functions and functionaries, for regulation foresight, premeditation… that is the purpose of active forgetfulness, which is like a doorkeeper, a preserver of psychic order, repose, and etiquette: so that it will be immediately obvious how there could be no happiness, no cheerfulness, no hope, no pride, no present without forgetfulness… Man himself must first of all have become calculable, regular, necessary, even in his own image of himself, if he is to be able to stand security for his own future, which is what one who promises does!” (GM,1).

The ownership of one’s future and the ingrained memory of oneself throughout the course of dynamic time are here the conditions of possibility for the contractual relationships in legal and business matters. The problem pinned down right at the outset of the essay is that of memory and forgetting – how could we have attained such complexity in economics and exchanging goods (as well as continually run into “the individualist” problem in theorizing) without first remaining stable inside of one’s person, one’s name? The problem of humanity in distinction with the rest of the earth animals is how we could come to be seen as the same over time, as individuals, when clearly we undergo changes, learn new tricks, and generally grow and decay in the course of our tumultuous lives. To fashion a memory and a running narrative along with it, closely connected to the body but not necessarily so, is the opening problem that leads us to guilt, bad conscience, and resentment but also the act of promising that brings us into the world of equivocal relationships and indebtedness. In forgetting, Nietzsche allows a moment of tranquility and respite amidst the maze of confusion surrounding business calculations, and the morality of debt. The act of forgetting, active forgetting, is a glimpse into the strong forces emerging from the bounds of the text, joyfully casting off the burden of duty towards one’s past.

What follows is gruesome. From here on, after section one, the second essay of The Genealogy of Morals will take the reader through a long narrative about the emergence of God and feeling of guilt (bad conscience) He brings along with him: a narrative that is mostly a parody of histories of morality that abounded in Nietzsche’s day and which he fought vigorously against. He plays along with the idea for twenty-or-so sections, interjecting every so often to remind us that violence, force, and subjugation are at the root of the order of things. As written above, when tracing a history and giving an account of how we arrived at the present composition of things there is an overwhelming tendency to project the order of the day backwards and export the common, victorious terms of one’s predominant discourse into the past. The contractual relationship viewed from both Nietzsche’s society and ours could not have had an origin in moral sentiments – this notion of reciprocity, the equivalence between two individuals itself is a moral notion and does not persist throughout all times. This would lead us to posit a universal standard across all cultures and societies without much evidence for the inner workings of these people’s or their environments, a standard essentially and undeniably conjoined with immoral and destructive institutions of harm (here the bourgeois, European imperial history and its systemic plundering). The demand to “right” a situation by bringing to a common level the relationship between disputing individuals is no pre-given; it takes a highly active and critical perspective shared by both Nietzsche and Graeber to wade through the axioms and assumptions lingering in the air of one’s culture to provide a counter-narrative.

There is a constant equivocation of origins with violence. Throughout the second essay, legal terminology is dotted with coarse words evoking brutal pain and torture: “it was in this sphere then, the sphere of legal obligations, that the moral conceptual world of “guilt,” “conscience,” “duty,” “sacredness of duty” had its origin: its beginnings were, like the beginnings of everything great on earth, soaked in blood thoroughly and for a long time” (GM,6). The moral feelings that bind us to harmony have a perverse underside: the pain and trauma inscribed into the memory of the body directly. The origins of moral concepts have are in this passage legal issues and obligations, but just a few pages later he switches to the creditor/debtor business relationship:

“…the feeling of guilt, of personal obligation, had its origin, as we saw, in the oldest and most primitive personal relationship, that between buyer and seller, creditor and debtor: it was here that one person first encountered another person, that one person first measured himself against another.” (GM,8)

Bear in mind Nietzsche’s ambivalence concerning origins. This is the parody side of the essay, the one which Graeber correctly identifies as playing along with a bourgeois audience only to shock them with the necessary horrors that they would not have acknowledge in their elegant theories, sitting in the quiet rooms of study where they wrote their treatise. Seeking the origin of a phenomenon like morality or debt is only to mislead and confuse the reader, even when done rigorously and scientifically. To do so anyways would neglect an incomprehensible amount of forces vying for their subsistence and growth; the only way to avoid this is to play along with the attempts of others and use their reasoning against them in an ironic distance. The emphasis on violence, destruction, and assault is a ploy to link together those cool, calm, and collected observations into the essence of things with that which they forget: the forces we must tarry and battle with constantly. This excessive memory of secure individuals writing books, the memory that recollects so much of the fine details or holds an idea firmly and dearly throughout the wide length of their lives, is unable to perform the act of forgetting – an active forgetting. Origins reappear constantly in all ages (as we already posited with Nietzsche in part 1) and stick into the memory of its actors. Just consider the endless repetition of nationalist beginnings and their moments of triumph, their grand significance that lives on in the cultural memory. What bloody battles and rampant slaughter they leave out! Nearly every “great” historical moment has an obscene underside with violent undertones that we parse out for the sake of a comfortable narrative. The teaching of this narrative coupled with the mandatory schooling for a nation’s youth means a institutional replication of a memory of origins. The “grim realities of war” line that accompany these histories spotted with dates of wars gloss over the suffering and deep misery they bring to the people caught up in them.

Both Graeber and Nietzsche understand this, but morality is tricky; Graeber employs this unveiling technique in his great-grand historico-anthropological treatise of his own with disdain. The essential goodness of communities is always contrasted with the violence of the state and the violence of cold financial transaction. Nietzsche keeps a extremely acute eye on the subtleties of morality and develops a style that is critical of its inner-workings, all the while maintaining a creativity that is essentially positive and non-judgmental. Tellingly, the next chapter in *Debt after dealing with On the Genealogy of Morals is “A Brief Treatise on the Moral Grounds of Economic Relations”, where a new theory of human relationships (the real question of foundations) and their grounding in humanity is asserted “from scratch”. In the next essay of On the Genealogy of Morals, the religious ascetic life is closely examined and the ascetic emerges not in shambles but transformed into a boiler-room of creativity in a hope for the “man of the future” that will overcome it. To merely denounce violence and take a moral stance against those things that Nietzsche makes abundantly clear that he despises would be to get caught up in the logic of that which plagues him so. Challenging Christianty by moralizing would not escape the moral logic he wishes to get rid of; to escape we cannot simply negate but must launch out from that which we are forced to endure. The vital energies that these abhorrent systems and logics have imbued in us are the places from which to transform ourselves and create something anew.

But the tension between these two writers can be heightened even further: Nietzsche takes shots at the anarchism that Graeber ascribes to for shrinking away from the power implicit in the will, the ever-expanding will that dominates and without remorse. Having come from the common place of brutality behind origins, the divergence is sharp:

“…the cause of the origin of a thing and its eventual utility, its actual employment and place in a system of purposes, lie worlds apart; whatever exists, having somehow come into being, is again and again reinterpreted to new ends, taken over, transformed, and redirected by some power superior to it; all events in the organic world are a subduing, a becoming master, and all subduing and becoming master involves a fresh interpretation, an adaptation through which any previous “meaning” and “purpose” are necessarily obscured or even obliterated.” (GM,12)

Breaching origins and causes does not bring us back to a baseline communism here; the disruption of origins and the deconstruction of treatise on the nature of economics, morality, and the like are themselves manifestations of a new interpretation taking shape, a new force burgeoning outward. Beneath or behind these origins and statements here lies a contested ground. On the one hand, there is the common decency of people together sharing; what is untouched by laws, contracts, and money; or Graeber’s communal humanity “refusing to make such calculations, refusing to measure or remember who had given what to whom” (Debt,79). On the other hand, there are bare forces mixing and jockeying in a basically non-human contest for power. Ever the astute historian, Graeber will point to the dominant quality of societies to explain why hierarchies and embattled parties engage in struggle for power: heroic societies of honor and commercial societies with their markets have “slipped” into their respective class relations. The social arrangements are depicted as the cause for leading astray the basic, common, human element. These societies could only ever appear as aberrations – a mistake in the development from “the foundation of our humanity”.

What a great number of mistakes there have been throughout the coarse of humanity! A comprehensive collection of examples of the ways humanity has been corrupted by deviant social organizations would be staggering (a discussion on anti-civilization primitivism will have wait for now) and Graeber’s book does come off in many instances as a very long series of travesties staining a core humanity. One might wonder if man is more commonly conniving in its history and whether we should take Nietzsche’s opposite parody version of man as the “calculating animal” as more sound. Man for Nietzsche is something that must be overcome rather than retrieve from the immoral structures that have laid their “terrible claws” upon it; it is in this sense that what comes after man and the state must be more intense, more affirmative than what history has provided hitherto. But what of man’s pre-history? there pretender origins appears again! Historians surely select there topics according to their wishes and their social training (and so the values of a particular society are drawn out of them), as Nietzsche would agree. But could this not be explained as a force willing itself into the past to triumphantly assert its existence as either the culmination of the story or as its own hidden, untold greatness? How are we to think of pre-historical humans or even the neighboring species of chimpanzees from which we evolved but from the present moment in which we now conduct our research? The thought of “origins of the human” must dominate any look into pre-history considered by anthropology but not, for instance, biology or ecology – for ’human’ is right there in the name (anthro-) and therefore presupposes its common attributes. It becomes hard not to imagine the forces pushing back on these (perhaps non-human or not-yet-human) communities fearing for their survival and the solidarity born out of the difficulties of tribal-level reproduction.

The will expressed in Graeber is clearly a critical spirit actively preventing logics of domination imposing themselves all around it. Actively engaged in political organizing himself, his grand work has anchored many seeking another world (forcefully). A work like this is an extremely potent force, but one that can sink into moralisms that reintroduce an ideal into an otherwise brilliant work of historical anthropology. Take this passage for example:

“Sometimes people’s “abilities” and “needs” are grossly disproportionate. Genuine egalitarian societies are keenly aware of this and tend to develop elaborate safe-guards around the dangers of anyone – say, especially good hunters, in a hunting society – rising too far above themselves…
Communes or egalitarian collectives in the United States often face similar dilemmas, and they have come up with their own safeguards against creeping hierarchy. It’s not that the tendency for communism to slip into hierarchy is inevitable – societies like the Inuit have managed to fend it off for thousands of years – but rather, that one must always guard against it.” (Debt,115-116)

The activity of safeguarding an ideal is something that Graeber seems to be almost explicitly endorsing. Vigilance toward conformity is itself a powerful force: a reactive force that sees the actively dominant force pouring outside itself and quickly cuts it down (to employ Nietzsche-speak). “Keeping things commie” must entail checking the forces of growth that sprout up one at a time; a leveling force is required to counter act the repeated transgression. This seems to have functioned smoothly in a few societies on the earth – a few. The repetition of preserving a social form and actively preventing others from disrupting that form must be thought as just that: an active that is performed over and over again to keep it in place. The only thing that stops us from calling such a conformity oppressive at this point is by alerting people to the “fact” that our very essence as human is being threatened. The force of dogmatism functions in ways beyond that of simply the state, organized religion, the market, racism, and patriarchy. Keeping a lid on deviancy could be described this way, especially when an ideal is attempted to be held in one’s securely hand – trying to escape.

One could argue, on the contrary, that this Nietzschean force-philosophy is merely the product of a deranged man reared in a social environment of austerity and militancy. The question then would be if this reduction of the work to the surrounding society from which it came is not reemploying the idea of origins as a cause, whether the philosophy is over-determined by its time and place. This brings us to one of the big differences in their style: while the social forms determine the type expressions a culture will take in Graeber, a more intensive forces/power play is operating in Nietzsche. One observes the social-historical with more scientific research at his disposal, the other collapses nature and culture into a single plane of cosmic or planetary fluctuations of power. This seems a legitimate decision one must make regarding just how much one’s social structures define the possibilities and limitations of one’s imagination, and how much is dependent upon more physical forces of the earth/cosmos: a decision that cannot be merely spontaneous but must be a matter of degrees.

Moving along with expanding the tension between the two, Nietzsche makes his own attacks on the spirit of reactive safeguarding impulse very obvious:

“The democratic idiosyncrasy which opposes everything that dominates and wants to dominate, the modern misarchism (to coin an ugly word for an ugly thing) has permeated the realm of the spirit and disguised itself in the most spiritual forms to such a degree that today it has forced its way, has acquired the right to force its way into the strictest, apparently most objective sciences; indeed, it seems to me to have already taken charge of all physiology and theory of life – to the detriment of life, as goes without saying, since it has robbed it of a fundamental concept, that of activity.” (GM,12)

That hatred of rule in “misarchism”, its gaining entrance to science by acquiring the “right” is something despicable for the way in which it subverts the will to power – life’s penchant for activity. The “essence of life” for Nietzsche is primarily about (he will say later in the same paragraph) the “spontaneous, aggressive, expansive, form-giving forces that give new interpretations and directions” (GM,12) during its brighter moments. But does the essence of anarchism necessarily run opposite of this active force? Do they not, and Graeber among them, work tirelessly at creating action-events by willing themselves ever forward against monumental odds and fighting oppression with a counter-force of their own – wherever it rears its ugly head? The impossible demands and slogans of direct action participants like “another world is possible” seem to perfectly suit Nietzsche’s criteria of making new interpretations and expanding the vitality of the scope of the imagination. This is undeniably so in the moments of contention with the state and its “terrible claws”, but also in the networking or solidarity building activity that “grows the movement”. What Nietzsche is railing against is not this em-powering work but the use of back-door strategies of obtaining rights and hearings from the big-bad state. When the tide is diminished and activity wanes, the reactive forces that get sucked into the comfortable subordination of the state or the marketplace machine are the type that are so deplorable. Appealing to dominant power’s inner-moral-feelings and accruing concessions is exactly the result of an approach that focuses on “rights” and the contractual relationship. The two writers considered here understand this very well: human rights and reciprocal fairness remain within a logic of ethical conduct that presupposes the religious institutions set up inside of the state/market form. This is the direct action strategy that Graeber endorses and practices: setting up alternative structures to the state/market model and then ignoring the state, standing guard against capital circulating through it (Capitalist-free zones). The difference is that Nietzsche resists the humanism that fits within that state-market-morality form as well, with Graeber retaining a primal humanity he believes exist apart from it. I add the primal to his more explicit humanism, considering the anthropological nature of his investigation into the common threads found in humanity as a whole and the basic congenial relatability he posits in it.

Looking back to Graeber’s Debt with this covert morality of primal humanism in mind, we’ll next come to some of the insightful findings of the ethnographic study and infuse Nietzsche’s emphasis on active forgetting and forces so as to refine Graeber’s anarchism.

The idea of a common communal humanity in baseline communism coursing throughout Debt is an alternative moral foundation to the ’rights’ discourse, which it ruthlessly uproots – particularly in in the chapter “Honor and Degradation: or, on the foundation of contemporary civilization”. Here we get definitions of slavery (“the ultimate form of being ripped from one’s contexts, and thus from all the social relationships that make one a human being.”), and honor (“surplus dignity” p.168). These definitions are contestable. But the real clincher in this chapter that is worth spending the most time on is the discussion of how ancient civilizations and their discourses on legal and religious norms have persisted, coloring our own talk in the vast majority of the public realm. From the heroic societies like Greece and Rome that passed down their terminology and social structures underpinning them, we have received dilemmas that last to this day: property rights and, more generally, the idea of possessing rights at all. The ethical conundrums that rise from this (and these issues, it should be noted, arise in market and war based states) have defined entire subsequent traditions that make up both the convoluted system of laws that are supposed to mete out justice and the roots of patriarchy.

Here again the assertion of the nature of a society – it’s covering-over of communism with some selection of debt logics, equalization, hierarchies, and violence – produces a more-or-less well categorized type of people and set of issues with which the society must struggle to find solutions to. The social forms that overtake the community indicate the moral problems that take shape. Cultures of war and commerce tend to become confused and concerned by the rising indebtedness of large amounts of its population and the powerful individuals inside of it tend to feel threatened by money, taking drastic measures to make it publicly known that there honor is beyond the equivalences brought on by the universal value of money. Graeber argues convincingly (with plenty of footnotes and scientific backing) that the phenomenon of money and debt, together with the organized violence of the state and its warriors, prefigures the emergence of a tradition of ethics/morality found in the academies, the laws, and the religions – traditions whose base of words and ideas have persisted into our present day and have extended around much of the globe from the Mediterranean civilizations (namely, Rome).

In short, as trade began expanding in Greece, money became central to the daily life of the citizens of the cities. Aristocrats and warriors wanted to ensure that their estates were not subject to the equalizing power of money. So as “money introduced a democratization of desire” and everybody needed it for the basic necessities of life (p.190), one’s honor became a measure of how far one could keep themselves from the vile dictates of the marketplace. With the widespread appearance of coinage in a marketplace that seemed to envelope the entire society, making-do without recourse to commerce and trade became a status symbol. Rather than flaunting one’s wealth, the honor of the warrior was measured by how far he could distance himself from wealth in the eyes of his fellow citizens: “money, then, had passed from a measure of honor to a measure of everything that money was not. To suggest that a man’s honor could be bought with money would be a terrible insult -” (p.188). Eliminating risk and making a secure financial future for oneself ran counter to these warriors’ ideals. The extravagance of the wealthy is in stark opposition to “martial honor”: “A warrior’s honor is his willingness to play a game in which he stakes everything. His grandeur is directly proportional to how far he can fall.” (p.189). It was the mass market that sprang up in the Mediterranean cities along the coasts that made the circulation of money more fluid, spreading the equalizing transactions of minted coins for goods that occupied the previous system of credit and debt. The heroic warrior mentality had to morph into the struggle to remain above this ubiquity and to retain the cherished greatness that comes from the risk and victory of battle. This became keeping a tight hold on their house, lording over their property: “This extreme fear of dependency on others’ whims lies at the basis of the Greek obsession with the self-sufficient household.” (p.190). One could say that the warrior’s penchant for conquest and glory (codified by the honor and renown placed on him by his neighbors) was domesticated (quite literally) by money and markets, or even captured by the colonial machine.

Transitioning from Greece to Rome, property becomes the central theme of the complex laws that were drawn up in order to settle disputes in Ancient Rome. These basic concepts of property ownership have since been translated into the more idealistic notions of freedom, liberty, and rights as being “possessed” or “owned” by individuals from a legal-contractual point of view. The Roman Empire it seems most effectively conquered the world through its laws, for “Roman law has come to provide the language and conceptual underpinnings of legal and constitutional orders everywhere.” The hang-up of Roman law, its dilemma that caused difficulty in formulating particular laws was that “[i]n Roman law, property, or dominium, is a relation between a person and a thing, characterized by absolute power over that thing. This definition has caused endless conceptual problems.” Considering, as Graeber does, that property laws are not about people in relation to things but “an understanding or arrangement between people concerning things” (p.198), one can see how slavery fits in so easily in Rome: when the law is based on ownership of things in a society with much commerce and conquest, supposedly equal relationships with people can fall very quickly into master and slave.

“In creating a notion of dominium, then, and this creating the modern principle of absolute private property, what Roman jurists were doing first of all was taking a principle of domestic authority, of absolute power over people, defining some of those people (slaves) as things, and then extending the logic that originally applied to slaves to geese, chariots, barns, jewelry boxes, and so forth – that is, to every other sort of thing the law had to do with.” (p.201)

As the structures of the state and the markets that developed between and inside them became more stable in the empire that was Rome, the laws also became more important in clearly defining when and where someone could fall into slavery and what control the city had over the people. The house-hold became the place where the male citizen could exercise his dominance over everything within it. Graeber notes how ’dominate’ and ’domestic’ have the same root in the Latin ’domus’. It was in Imperial Rome then that property was inscribed in the laws as a *right that one *has, so as to provide the space where the citizen could still lord-over in a world dominated itself by the twin pincers of commercial exchange (coinage, profits, debts, etc.) and outright war.

This is the hidden underside of the noble and ideal notions that circulate (as if they had the currency of a coin) in the discourse of so many communities, cities, and nations to this day: owning one’s freedom, saying “I have rights” is a derivative of Roman property law that codified the transition from master to slave within the empire. To have rights or own liberties also means that one can sell them. We are free to give up our freedom so to speak; given the predominance of markets and the need to make money to stay afloat in necessities of life, this was bound to happen. When freedom takes on the characteristic of property and rights are owned, we presuppose the individual person – as isolated and naturally independent – and sort of commodify it, as if we could take this thing that we own (our freedom) and sell it, or buy someone else’s.

“At this point we can finally see what’s really at stake in our peculiar habit of defining ourselves simultaneously as master and slave, reduplicating the most brutal aspects of the ancient household in our very concept of ourselves, as masters of our freedoms, or as owners of our very selves. It is the only way that we can imagine ourselves as completely isolated beings. There is a direct line from the new Roman conception of liberty… to the strange fantasies of liberal philosophers like Hobbes, Locke, and Smith, about the origins of human society…” (p.210)

These concepts have worked their way into our collective consciousness by way of translated texts that could travel along the Roman-built roads and the continuity of the Christain Church afterwards. The ownership of rights and liberties as property of individuals extends from Rome to western Europe to the American colonies to the rhetoric of protesters seeking redress for the pain and torment inflicted by this model of imperial warfare. With increasingly efficient war machinery and the capture of territories by the creation of markets and indebted nations, the lexicon of those who resist is for the most part still colored by the Roman heritage of the colonizers. Demands and ideals for redress of grievances or assertions of autonomy take the form of already having the right to self-determination (at best) or seeking to gain rights and the respect from the greater countries (worse). Graeber will labor on and on about the violence behind this, as if the whole edifice was held together by the brute threat of beating people up or killing them at the bottom of it, or else the violence done by demanding equivalent repayment for one’s monied debts (perhaps with interest). He seems to want to constantly remind us of this in order to draw on our moral affectations, which he has provided a ground for in baseline communism. Appealing to these sentiments is a strategy that invokes a desire to be rid of the entire structure of civilization, states, and money so as to allow for the primitive-communistic allocation of needs to all in our closest proximity (tribe maybe). So, unearthing the origins of our tarnished present turns out to be an exercise in replacing them with new origins: those of humanity.

But what happened to the honor of the Greek warrior obsessed with remaining outside the money system? If we are not to overdetermine the behavior of these warriors by pointing to their society of origin, then we can say that they were a form (albeit a privileged form) of resistance to the logic of money and markets. The reverence for honor that develops in response to the rise of markets and the moral conundrums they produce could be described as a safeguarding of one’s greater force from the flattening out a population of people. The public displays of one’s non-monetary worth in extravagant gift-giving is here reactive to the burgeoning influence of money in their cities and towns; but as to the origins of the warrior ideal itself, we do not receive from Graeber any explanations besides “violence” – which is clearly meant to have shock value and offend the reader’s sensibilities. The state and the forced imposition of symmetry in repayment assume the entirety of the blame for the violence of war and the desire of the honor-bound.

We need not resort to a social-determinism to explain why cultures become violent. On the other hand, we cannot assert that people are violent “by nature”. This simple dichotomy of contingent social forms/natural certainty (nature/nurture or “social construction”/essence) is precisely the quagmire that Nietzsche helps us get over in casting off and poking-fun at the narrative of origins. An origin-story must be retold over and over again to the young student, molding the subject and its soft, sculptable body for it to survive the flow of time. An origin can only ever live on in the memory of a body-politic and the narrative it communicates to itself; to be *forced into remembering the violence of the origin, its obscene counterpart to the glossy coating, does not get us beyond the logic of states, debt, or ’human rights.’ Understanding the forces bearing down on these bodies-politic does. For instance, the harsh mountainous geology of Greece made cities more isolated from each other, its close geographic proximity to the Persian Empire, sticking out into a sea with a history of once established civilizations and favorable wind patterns, and, yes, the rise of coinage and markets all contributed as *forces to a heroic society of war (See John Protevi, ’Geophilosophy: War and Earth’ in *Life War Earth: Deleuze and the Sciences). But to take the origin-search this far would be to analyze so much detail as to take us out of the strictly social realm and into the earth-physical forces that always intermingle with the unique social structures of any given group of people. Nietzsche’s force-philosophy can’t take us their, for the advancement of the sciences had not allowed him to. But dissolving the attachment to origins rhetorically and reminding us to forget them so as to deal with what is in front of us in the near future is something at which Nietzsche was masterful. His diagnoses were restricted to the metaphors and scientific advancement of his time, but he could look past the symbols containing social currency and find other forces at work.

The alternative history of an idea we get from Graeber with the beginnings of human rights discourse in Roman property laws (and the domesticated warrior shrunk into his house, while the Empire expands) serves to reevaluate the entire progressivist terminology. The ideals that get in the way of a true communistic autonomy turn out to be the ones that get used by people supposedly on its side. Demanding rights isn’t a radical alternative to the existing order of things, but merely a demand for access to it: a seat at the table in global dominance. “Most of our most precious rights and freedoms are a series of exceptions to an overall moral and legal framework that suggests we shouldn’t really have them in the first place.” (p.210). But it takes little more than a cover-to-cover reading of Debt to see that the alternative moral framework proposed is a primitive humanism, where periodic debt cancellation was normal in order to stave off deserting citizens and rebellious mobs. This does differ qualitatively from pretty much all of the dead-end strategies and rhetoric of contemporary (pseudo-)resistances to Capitalism, but it merely reverses the progressive faith in the future socialist state that tames Capitalism by growing bigger than it with a harkening back to a time of innocence. Rather than everyone gaining rights and owning a well-defined property/territory that separates them from an exploitative market or state military-force (aka the police), a community “before violence” asserts itself underneath the layers of intrusive social organization. The reversal is similar to Nietzsche’s “reevaluation of all values” but stops short at his search for “the overman” that would go beyond man. Essentially, if we strip down to the base(line) community, we would get to live out the goodness of each other’s company without any aggressiveness (just keep the exceptionally skilled one’s from gaining any distance!).

The progressivist humanism of rights accumulation differs from the primordial humanism of communization, but still remains a humanism. Lacking a nuanced understanding of the potential forces awaiting actualization, strategic maneuvering against something as powerful as the state or the market thought as totalized wholes relies on their negative moralization. We do not get beyond this moral framework (humanism) by singling out the violence of the state and the logic of debt and sticking all of the blame on them. This merely perpetuates the weak position of the pure, human resistor knocking at the great big castle doors of the corrupt state. A counter-power that frees itself from the grip of the state might not have to become conscious of itself as a force until the moment it faces real forceful opposition, but repeating the morality of the oppressors indefinitely will keep the counter-power to a limited scale. Movements must be able to grow and foster the expanding, aggressive impulse that marks a vital body.

While Graeber gives us the opposing ethic of the primal anarchist against the progressivist ethic of a more equitable, inclusive future, Nietzsche simply wouldn’t have made this distinction – he observed in the texts of revolutionaries manifested during his life a hatred of rule and a despising of what he thought to be most essential to the forces of life. Mutual aid, solidarity, and communal living can be incorporated into the Nietzschean affirmation of creative forces unkept by weakness and resentment, but today – I would contend – only as a movement or campaign. People are constantly asking each other about the next move, the next event during the course of struggle. How to keep moving on and whether the group is growing or dying, strengthening or weakening, or waxing or waning (if the previous two are too dramatic) is always being assessed by participants of a campaign or an emerging body with a political agenda.

Graeber perhaps too easily selects his own version of anarchism without picking out precisely what in anarchism remains philosophical-moralistically progressive. On the flip side, his access to vast historical records allows him to build a convincing argument about social-historical change from the (moral) ground up. Science itself, however, has a clearly visible progressivist streak that someone as sensitive to triumphalist narratives like he would do well to look into, that is, regarding an historical telos. The early revolutionary theorists of Europe were heavily influenced by Hegel and the progressive model historical change. A flow of history recorded in the archives and redeployed in massive (usually nationalistic) volumes made for a sentiment that the movement of time was getting better and better, eventually to reach an ideal state, or absence thereof. It is precisely this mixture of metaphysics (in the classic sense of causation and beginning/ends in nature; not physics) and history that Nietzsche could only bear with rage:

“The evolution of a thing, a custom, an organ is this by no means its progressus toward a goal, even less a logical progressus by the shortest route and with the smallest expenditure of force – but a succession of more or less profound, more or less mutually independent processes of subduing, plus the resistances they encounter, the attempts at transformation for the purpose of defense and reaction, and the results of successful counteractions. The form is fluid, but the “meaning” is even more so.” (GM,12)

But Graeber does not take the progressivist stance of his predecessors. He believes his work to be proceeding along lines beyond that of classical anarchism, but doesn’t want to ascribe to anything but anarchism. Anarchism is only but a practice and kind of verb to him and he rejects to serious an affiliation with the classical figureheads of Proudhon, Bakunin, and Kropotkin. Recent work has been done by people like Todd May, Duanne Rousselle, and Saul Newman among others in mixing Nietzschean, post-Nietzschean, or postructuralist philosophy with anarchism in a body of literature provisionally titled “post-anarchism”. Graeber himself has written about the “new anarchists” and I think would benefit from engaging with post-anarchism. But anarchists often have a hard time getting over the French-wave of intellectual celebrity in the later part of the twentieth century and reading some damn Foucault. In fact, much of the general thrust of my argument can gleaned from his essay Nietzsche Genealogy History.

The reason for bringing all of this progressivism up is to remind us of some of the pretenses from which a great deal of the revolutionary action comes from and from which the massive work of anthropology in Debt doesn’t so much remain in line with as reverse. Debt does this by grounding itself and advocating a return to debt jubilee, but such an action of canceling all the debts could only be accomplished by a sovereign whose moral authority is robbed by a baseline communism. Is Graeber using a primitivism morality to try and convince a state authority to relieve the peasants, so that we could do it all all over again? Or is he demonstrating the necessity of a debt cancellation prophetically? I doubt it would be either of these; he is pointing the way towards resistance and I am trying to give it more oomph.

The force that would bring about something new must also forget the past of origins and be strong enough to do so, and perhaps must also be strong enough to create new origins.

Let’s return to Nietzsche. At the culmination of Nietzsche’s parody-narrative of debt and legal contracts as the origin of morals and guilt, we get the most odd twist of logic produced from carrying out a bad thought to its consequences. If debts are at the heart of ethics and business transactions are the first instance of men’s measurement against each other, the valuations found in Christianity and other similarly monotheistic religious doctrines must be too. As tribes advance to greater strength, each time more deeply indebted to their ancestors, to the gods, then finally to the ultimate God of pure credit for bestowing the whole universe (with a more personal touch), the debt becomes the heaviest burden imaginable – an all knowing, all seeing, all powerful whole to complement the hole in one’s soul. An individual’s relationship with such a being could only raise the stakes to epic proportions.

“…suddenly we stand before the paradoxical and horrifying expedient that afforded temporary relief for tormented humanity, that stroke of genius on the part of Christianity: God himself makes payment to himself for the guilt of mankind, God sacrifices himself for the guilt of mankind, God himself makes payment to himself, God as the only being who can redeem man form what has become up redeemable for man himself – the creditor sacrifices himself for his debtor, out of love (can one credit that?) out of love for his debtor!” (GM,21)

It is a truly ridiculous story in which God does all the accounting work for a weak and sinful lot of people. The great God-Creditor sacrifices his son to pay off a debt not to anyone else but to himself. As Graeber repeatedly notes, people actually would sell off their children onto slavery or otherwise to pay off debts, but this is no debtor paying back a loan, it is God paying back himself for someone else’s debts: the ineradicable sin of mortals. One cannot rid oneself of original sin, yet God sent his son to die for us anyways and rid Him (the great Creditor) of His (nonexistent) debts. Hence the precisely effective meme that spreads like a virus amongst people with anything resembling a market: “Jesus died for your sins.” The great creditor in the sky is said to have sacrificed his own son the way a debtor would, but only to pay himself back. All of us sinners remain in debt in essence but are unable to top God’s sacrifice – we remain infinitely in debt.

A good reader will focus on the immediately preceding section 22 and see that this is a fable and not the full picture of debt and morality. This talk of debt and credit has reached its limit and we must come down from heaven to meet the pangs of forces:

“You will have guessed what has really happened here, beneath all this: that the will to self-tormenting, that repressed cruelty of the animal-man made inward and scared back into himself, the creature imprisoned in the “state” so as to be tamed, who invented the bad conscience in order to hurt the more natural vent for this desire to hurt had been blocked – this man of the bad conscience has seized upon the presupposition of religion so as to drive his self-torture to its most gruesome pitch of severity and rigor. Guilt before God: this thought becomes an instrument of torture to him.”

The man of bad conscience that Nietzsche describes is not the debtor but the one kept from its own outward expression and the conquering impulse by training, punishment, fear, and the state. These techniques and formations are what prevent the will to life from its fulfillment; this is what is “really” going on here. The religious garb is a spiritual cover to feelings of internalized oppression:

“All instincts that do not discharge themselves outwardly turn inward – this is what I call the internalization of man: this it was that man first developed what later was called his “soul.”” (GM,16)

Nietzsche’s real is contrasted with Graeber’s real: the forces of internalization that scare and push back against the body vs. the foundations of our humanity in communal affection.

The extent to which a foundational humanism can be swallowed up by the forces of resentment that Nietzsche diagnosed is determined by the way such a humanism is deployed against the reprehensible systems and statues of the state, the pastorate, the corporations, etc. If they only work so as to reinforce the power relationship by taking hold of the moral logic of the master and attempting to use it against power (when it was perfected and deployed as an art of subjugation), then we will only get caught up in the same loops that plague the (human) “rights” discourse. Graeber can see through the contractual rights framework but not the humanism of the pastorate.

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So where does this leave us? If something like a jubilee that Graeber suggest at the end of Debt is going to happen, then I think some of the intellectual work done by Nietzsche and his predecessors would be well taken by other anarchists and Debt Strikers. To put the active back into the name activist, those feelings of joy, empowerment, and expansion should take precedence over moralizing and the pining for the communistic purity of human decency. The strategy of appealing to a moral sense of community does indeed have a role to play, but it can only take one so far. In the ancient civilizations that Graeber would have us look back on and learn from, a great deal of people had to flee their homes en mass and, if that was not enough, form militias to sack the capitals to challenge their indebtedness and their banishment:

“The pastoral fringes, the deserts and steppes away from the river valleys, were the places to which displaced, indebted farmers fled. Resistance, in the ancient Middle East, was always less a politics of rebellion than a politics of exodus, of melting away with one’s flocks and families – often before both were taken away. There were always tribal peoples living on the fringes. During good times, they began to take to the cities; in hard times their numbers swelled with refugees – farmers who effectively became Enkidu once again. Then, periodically, they would create their own alliances and sweep back into the cities once again as conquerors.” (Debt, p.183)

We could always try and implore the sovereign to take pity on our destitution, but when they listen almost exclusively to financiers and the businesses that have ascended into their position as big market players, the chance of that working is going to be small. Politicians tend to make decisions based on the pressures surrounding them, the ones that got them into the position they are in and could remove them very soon. If we revert back to the early forms of civilization, then resisting debt would have to eventually take the form of a counter-force of people who feel as if they had no future – as if the only option available to them was too escape. However, to assemble a new body-politic with enough force and vitality to withstand the pressures from the established forced bearing down on it with its debt-inducing machines would be another option that skips the exodus altogether. The only escape would be right into the middle of the political by doing the most political thing one can do in times of crisis: assembling as a collective body in those places where public assembly could still happen. There we would find the force to back up the demand for debt cancellation.

Which isn’t to say that such a force would be explicitly a collection of debtors or take the fulfillment of a particular demand against debt as goal. People have their critiques against the refusal of repayment, and the reciprocal-contractual morality of the market weighs heavily on the people as subjects. Both Nietzsche and Graeber are in agreement here. The new community of people that springs forth from that assembly in all of its force and vivacity is also something whose relevance and power is hard for anyone to disagree on. But, in attempts to make more than merely a semantic point, that body will need to recognize itself as a force to be reckoned with at some point and not just a rekindling of a humanity long lost on a social atmosphere permeated by the immoral, unjust, or otherwise hated prospect of war and financial solvency.

When people are organized (however loosely) together horizontally in these common places, what is produced is no mere static entity but a vibrant body that cannot help itself from expanding and growing large. The emergent body cannot be separated from its force – the power and ability the body has in influencing surrounding forces. A major and perhaps defining feature of such a body is the potential to act out of its own vitality as well as reproduce itself. The attributes of such a body are always context specific, but the immediacy of a rupture in the fabric of power relations is felt throughout all bodies affected.

Running through Nietzsche’s essay we have found that the memory calling upon the individual to keep tabs on oneself and keep account of its contractual affairs with others is not only a laughable way to speak of morality but pernicious. When taken to its extreme, it displays the weakness of the line of reasoning and the weakness it induces in creating the person of “bad conscience” or resentful one who cannot express their emotions outwardly, keeping them harbored so as to let them fester and render one more or less impotent. The priest of the church and the confession booth work on the subjection of of the individual so as to “force” a retreat back inside of itself. In the realistic-forceful take on morality, the symbols of worship and the ideas of “original sin” are merely the surface of a more docile population of self-regulating bodies. This same morality is taken up by Graeber although in a primal humanist manner in his baseline communism. Such a “baseline” suggests that no debt burden or criminal act could fall below it, for we are all humans at the bottom line.

More important than discovering a steady foundation for humanity, a collective political body must actualize itself as a force to rework the financial and political constraints on us as individuals. Casting off the memories burned into us through institutional training and actively forgetting the past rather than bringing us back to them (here as moral foundations) would be mark of strength.