The Story of Debt

As long as we continue to create money as interest bearing debt, we have little choice but to accept bankruptcy as inevitable, or continue to grow the economy without limit.


Many of the grand challenges we face today are symptoms of this underlying cause. Enough people need to understand this to allow our politicians to speak out against economic growth.

How can we make this message more understandable and actionable?

5 thoughts on “The Story of Debt

  1. Further to my comment this morning, you may find James Robertson’s Newsletters of interest, if you do not already have access to it. There is much evidence there, that the planting of “new seeds for the next season” is well on the way.

    James Robertson
    Newsletter No. 47 – May 2014

    The full Newsletter can also be viewed at

  2. Other thing, searches, responsibilities and illness have taken up my time, but I left this in my email inbox, because I think it is vitally important. I have not had time to read the “suggested solutions” yet, Lee, which you list and which I’m sure are worth reading; but having just re-read your very stimulating piece, Ronnie, I would say two things:
    Important as ‘stepping back and looking at the broad horizon’ is for this subject, the life-impinging nature of the “rules” you mention soon become evident, if even for a few months, we forget to play by them and fail to pay up – and loose our home, our car etc.
    Personally, from the time I began to understand some of this conundrum, I paid off my mortgage and have never been in debt to a bank or finance house since. Lucky me! I could afford to do that. Many more of my generation could if they wanted to, but boy! do I pity my grandchildren, who start out from university with a huge debt round their necks, and no prospects of any pension arrangements worth thinking of. No wonder they live from day to day, with little else on their minds, but to make some money, somehow.

    There is no way an apple that’s rotting from the core, can be stopped from becoming compost. And I think more and more, that to be fruitful now, we have to think of what to plant into that compost – to sow the right seeds and nurture the plant-lets for the next season. This Autumn’s harvest – for what it’s worth – is more or less done. Winter will come unstoppably! Lets think of what to grow next season, rather than try to save and perpetuate the current crop, which has turned out to be a rampant weed. (Please excuse the ‘gardener’s language’ …..:-) ..).

    This civilization, though it has conquered the whole Planet, is spent – is rotten at the core! Preparation for what is to come next is the creative challenge of our time, and how to manage the transition and survive the winter.

  3. CORRECTED VERSION: Comments on The Story of Debt

    I was looking forward to seeing what discussion would follow the posting of your concisely powerful video, Lee–thank you! And Percy’s apparent doubt as to humanity’s ability to deal with a problem so ingrained that it appears to be insoluble, coupled with what seems to be his acceptance of the possibility that superpower-wars may be instigated in order to preserve the game rather than acknowledge its absurdity, makes clear the importance of attention being focused on the topic.

    But to get a better handle on the problem, I suggest we “pull away” our viewpoint from the one embedded in and taking for granted the existence of all these institutions and all of their current practices. Let’s try looking at the situation in terms of the Life, the reality, that we’re dealing with–human beings, more than 7 billion of them now, surviving by cooperating in certain ways that are largely constrained by the “rules” of what has become a global economics. The vast majority of these human beings probably don’t think about the more abstract of these “rules” very much at all, they just “go along” with what others tell them, and they “believe in the system.” The vast majority are not yet aware, in other words, of the economic system as an ontologically subjective “object,” a product of human social construction that can–and obviously should, since it is not something that can be sustained over time–be changed. BUT IT IS. If we could see ourselves as the lifeforms that we are, highly social bipedal primates who happen to be very clever at symbol-manipulation, we could see this nonsensical game of money-as-debt as something we created, and something that just happens to have a design flaw in the way it operates. If we could see that with respect to debt, of course, we would also be able to see that with respect to false beliefs such as that “making money” (however one might define that sort of symbol exchange, in terms of human primate interaction) is a rational justification for disrupting important, Life-maintaining planetary systems. I’m hoping that the day we see all of these things clearly is on the horizon.

    To wrap our heads around the message of this video, we need to ask ourselves what “debt” really IS. I need things like nutritional food, clean water and breathable air to sustain my existence, and I might be threatened by alligators, bears and certain two-legged mammals, but I don’t see any “debts” dive-bombing me or circling my head like thirsty mosquitoes–though I can imagine the metaphor, it’s only a metaphor, because “debts” are _all in the conceptual world_, not the real, solid, three-dimensional one. Or at least that’s true of the kind of “debt” that’s the topic of Lee’s video. To connect the notion with something in the real world, David Graeber traces the origin of our idea of “debt” to a moral obligation, a being-indebted to others for aspects of ones livelihood–back to Life again, not just abstract numbers. Yes, if someone saved your life, or helped rebuild your house after a fire, or even lent you money in some concrete, tangible way back in the day when we thought “money” was directly linked to something real, then chances are you will feel the moral obligation to “repay what you owe” in some way. (I just refreshed my memory of the plot of “It’s a Wonderful Life”–this movie seems to have served well to reinforce this linkage between moral obligation and money in the minds of generations of Americans–it could stand some critical analysis.) But when you start to see the farce of how money/debt is “created out of nothing” at the heart of our banking system, and then observe how, e.g., many of our best and brightest are letting themselves be stifled by the conceptual chains of student loan debt these days, I think we all have to start calling it into question: “I have a moral obligation to whom, for what, and why, exactly?”

    Under the heading “How Do We Get Away With It?” John Searle admits that, where “people cheerfully accept what would appear to be unjust arrangements” in all sorts of institutions, they “do not typically understand what is going on”; they don’t think of governments or banks or money or debt “as human creations. They tend to think of them as part of the natural order of things, to be taken for granted in the same way they take for granted the weather or the force of gravity” (Searle 2010, 107). He also notes that “a related and powerful motive for acceptance of institutions . . . is the human urge to conform” (108). Yes–look at all of us little human primates, accepting human conceptual constructs as real objects (or “conforming” to our neighbor’s beliefs if we can see that they are not), all headed not only for a conceptual cliff when the “debt” bubble becomes too much to bear but also a biospherical cliff when all the “illth” ( we have wrought upon the planet catches up with us. Searle seems to worry about what will happen if and when people start to catch on and cease believing in their institutions, and he makes a big point of asserting that our institutions operate via deontic powers that “lock into human rationality” (124), giving us desire-independent reasons for action (since you certainly don’t “desire” to send that $600 check to the credit card company every month!). But when you come eye-to-eye up against what goes on at the heart of the banking industry, as Lee’s video shows, the question starts to become, is it really “rational” to continue believing in, and acting to perpetuate, a system such as this? Only in some extremely detached, unbalanced, left-brained kind of way; as McGilchrist might say, if input from our real-world-cognizant right hemisphere were allowed to influence our thinking processes, we would very likely reexamine those desire-independent reasons for acting.

    The notion that the human primates currently at the tops of our hierarchies might prefer to engage in nuclear war rather than admit that the game they’re playing is corrupt through and through and give it up (along with their own “power,” which of course is based on it) is deeply disgusting, thoroughly despicable. My hope is that they can somehow be contained and the danger they pose defused by a humanity that’s finally waking up to all the tricks they’ve “gotten away with,” a humanity that’s refusing to continue to “conform” any more to a dysfunctional social construction that is irrational at its core.

  4. I was made aware of this intrinsic and fundamental aspect of modern economics by Margaret Kennedy in the 1990s and have struggled to explain the implications to people ever since – with very little success.
    I think the problem lies in the fact that there is no unanimity about a possible solution, as the economy is now global, and no individual nation can see how it could take any unilateral action that would not jeopardise its own activities.
    We may be observing the intrinsic and inevitable decay-factor within modern civilization, since it may take too long to create a global mechanism to take the necessary decisions to get us out of it.
    In the past, ever bigger wars, causing substantial, but still localised bankruptcies, have disguised the full impact of this system. But now a superpower-war is thought too dangerous even by aggressive, power-hungry politicians, for this method to continue…..or maybe not? – god forbid! – so what can we do instead?

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