01/26/2022 – Religious Debt is the Basis for Money?

Did you know the English verb “to pay” originally comes from a word meaning “to pacify” or “to appease”? There is actually a religious basis for the concept of debt and money. Stick around if you want to hear this one…it’s really good stuff. This is TenOnReligion.

Hey peeps, it’s Dr. B. with TenOnReligion. This video is closed-captioned here on YouTube and the transcript is available at TenOnReligion.com. If you like religion and philosophy content one thing I really need you to do is to smash that sub button because it really helps out the channel. I also have a ko-fi linked in the description if you’d like to help support the channel and help me keep this baby going.

Okay, today’s topic of religious debt as the basis of money is largely based on the late anthropologist David Graeber’s book, Debt: The First 5,000 Years and to a slightly lesser extent by Yuvel Noah Harari’s book, Sapiens: A Brief History of Humankind. Graeber’s book in particular is excellent. There’s a lot stuff to explain today that’s absolutely fascinating, so let’s get into it.

The idea of money is essentially an intersubjective phenomenon based on trust. It arose as a solution to several problems arising from economic exchange among people who are strangers. The religious basis of money is sometimes referred to as primordial debt theory. Reducing moral obligations to debts maintains human relations but with an enormous side effect of significantly contributing to human inequality. We’re going to explain this. Many fundamental determinations of right and wrong seem to be shaped by who really owes what to whom. If this is the case, how did we get here? Moral obligations often involve owing a favor to someone, but this is not the same thing as debt with the difference being that debt can be precisely quantified, as in one “X” equals six “Y’s” and so forth.

It all started with credit and debit. Some of the first recorded human documents are ancient Mesopotamian tablets with precise values of either grain or silver recorded as credits and debits. They did not necessarily have to be paid as grain or silver, but these were used as standards to equalize products when transactions occurred. Most modern money theorists would likely agree that money embodies the need for trust in an equalizing entity for exchange value. It assumes distrust of human social relations, especially among strangers. Money, then, is the creation of a new intersubjective reality that exists only in people’s shared imaginations. Money is not inherently anything in itself but is only a psychological construct.

For example, historical religious rivals such as Christians and Muslims could not agree on religious beliefs but could agree on belief and trust in money. Why? Because whereas religion asks us to believe in something, money asks us to believe that other people believe in something. The argument is that money simultaneously possesses the dual properties of both universal convertibility and universal trust. The idea of money being accepted as a medium of exchange is entirely a social convention. It is similar to a society accepting which side of the road to drive on.

But how is this accomplished? The Islamic author Ghazali noted that the basic nature of the problem that money is intended to solve is conceptual. For instance, two things require a common category in order to be compared. One can compare an apple with an orange on any number of criteria: size, taste, color, texture, and so forth. But if two things have no common qualities, how can they be compared? Ghazali suggested this could only be done by comparing both to a third thing with no qualities at all. It is therefore explicitly because money has no inherent purpose or value in its materiality that it can be used to serve as a medium of goods exchange. Money itself has no essence. Because it is nothing more than a human psychological construct, money is not “really” anything. Think about it for a second. The farther away from its jurisdiction material money travels, such as paper money or coins, the less valuable it is.

So, what is the relationship between debt and religion? This is a fascinating question which often seems to be overlooked in contemporary Western societies so bent on the disentanglement of religion and government. The market and capitalism are actually two different concepts. The market is simply exchanging goods through money as a medium (commodity to money to other commodity), while capitalism is using money to get more money (money to commodity to more money). Profit was only to be used for labor compensation and not solely for surplus as its own end. Karma, historically from Indian Hinduism and Buddhism, inherently contains the concept of debt. Consequences of one’s actions has effects on the future of one’s current life, or even the future of a future lifetime. This clearly would be the case for an insolvent debtor, for whom the consequence would be being reborn as a slave or an animal. But to some extent everyone is an insolvent debtor because getting money to repay debts means gaining wealth at the expense of others. What became apparent was that a cycle of debts and forms of redemption emerged leading to a religious theology of debt. Such religious exchange creates debt. But if human relations are marked by exchange, then they too are laced with debt, or in religious terms, sin. If one removes the debt, however, the implications are that the social relations evaporate too. So how then is one to retain the human relations but remove the debt?

In Western traditions, a similar situation can be traced back to Judaism and echoed in Christianity and Islam in the form of animal sacrifice. Sacrifice is a token offering for the recognition that the debt can never be repaid. The Mosaic legal system in ancient Judaism codified what was already being practiced philosophically. The same can be seen in Christianity’s focus on the crucifixion of Jesus and in Islam’s focus on Abrahamic sacrifice. Religion is human engagement with the act of creation, which gives rise to, among other things, guilt and the desire for justification, engendering a number of ways to frame predicaments and deliverances. The failure of fulfilling what we perceive to be obligations creates a feeling of brokenness. Deliverance of moral and social guilt arising from broken obligations comes through redemption and restoration. Sacrifice and purification are frequently used symbols for this. But sometimes the things that lead us towards restoration are forgotten and people become alienated from them. One must become centered to recapture what was lost. The common restorative theme in the West was sacrifice while in the East it was harmony. It comes as no surprise that the sale of indulgences to unsuspecting Catholic followers during the Middle Ages was such an outrage to the later Reformers like Martin Luther because it showed the immense abuse by the hierarchical leadership as exhibiting hypocrisy: creating a financial surplus off one’s perceived moral need for religious restoration. Yikes!

In both early Christianity and Islam, certain types of business relations were viewed as a form of usury. It was a type of extortion or fraud which, if enacted at all, should only be directed to one’s enemies. The creation of a situation which amounted to debt was a sin to both transactional parties causing both to falter morally. The idea was that money should not be treated as an end in itself, therefore charging interest was contrary to money’s true purpose. This was all fine and good until, listen to this, during the Middle Ages, some areas in Europe revived the notion of interesse from a Roman law, from which comes the word “interest.” This was a compensation for a late payment because the lender would suffer potential loss. A lender could charge a percentage of the amount as a penalty because he would have gained more money had the amount been placed in a more profitable investment elsewhere.

How is this connected to the primordial debt theory of religion and why is it so important? The answer to both is that such agreements initiated relationships of inequality. The material realities of debt reflected the religious metaphors of inequality that one owes a debt to the act of creation as framed in any one of numerous symbols, be it God, karma, or, in the case of Confucianism, one’s parents. Payment of this debt can never be settled on earth because its full reimbursement is impossible. So, it takes the form of sacrifices. Once kings emerged who were either gods themselves or spoke for the gods, they took over guardianship of that primordial debt we all owe to the cosmos and to the society for creating us. Real money is then created to calculate specific debts to specific individuals who we have wronged in some way and thus we stand in a relation of sin or guilt to them. Take a look at the German word for money (Geld), the Old English word for sacrifice (Geild), and the Gothic word for tax (Gild). They all look awfully like our modern word, “guilt.” Interesting, no?

Okay, some of you are going to like this next part. Let us investigate this a bit further from a financial perspective. All finances are categorized as either financial assets or financial liabilities. A financial asset is simply a claim on someone or something else – a person, bank, company, or government, something like that. This means that one person’s asset is necessarily and simultaneously another person’s liability. Theoretically, if all financial assets and liabilities were brought together, they would cancel each other out, leaving nothing but non-financial assets such as land and other possessions. This seems like equality, but it’s not. Here we get back to the issue of trust, or lack of it. As Harari states in his book, “We do not trust the stranger, or the next-door neighbor – we trust the coin they hold. If they run out of coins, we run out of trust.” This is why money must be precisely calculated in the form of debt which is quite different from just owing someone else a favor. Calculation means equivalence, intentionally causing money to be an impersonal arithmetic. This is a problem because in order to establish the equivalence one must disregard the human context. The violence of equivalence morphs the human person into some sort of reductive state of numbers. The language of debt makes it seem that it’s the victim who’s doing something wrong. The impersonal nature of money is precisely what is needed to produce a relational inequality and then suggest, on moral grounds, that the one to whom violence is being done is the one who is in the wrong. Blame the victim is one of the oldest tricks in the book but it’s all a façade originating from the person inflicting the violence. Hello big banks and student loans. Ouch!

This leads us to the crux of the matter. The intersubjectivity of money ultimately creates a world of alienated individuals. It is impossible to separate the violence that money engenders with its impact on human lives. So where does this leave us? Systems of value and morality are socially constructed. Social systems which reduce humans’ moral relations to debt with that subsequent debt converted to numbers requires enforcement. In such a system, all debts must be paid. But why? The intersubjectivity of money creates debt which becomes externally imposed upon the human person and intentionally holds us back to what we could truly become.

Let me return briefly to the primordial debt theory to show how it is intimately connected to modern capitalistic understandings of debt. The religion argument as the originating source of debt is further exacerbated by capitalism’s unending thirst for financial accumulation which in turn has subsequently created a situation of the moral inequality of the human person. The religious “predicament” requires a “remedy.” It becomes deeply personal. One must engage the remedy to appease the predicament as a response. The religious predicament/remedy model is then symbolized and humanized in the relationship between debt and violence, or at least the threat of violence, because it is so deeply personal. The connection is then solidified between religion and debt when one realizes that in religion, the debt can never be paid. It is similar to the debt to one’s parents. Graeber explains, “Squaring accounts means that the two parties have the ability to walk away from each other…while most of us can imagine what we owe to our parents as a kind of debt, few of us can imagine being able to actually pay it – or that such a debt ever should be paid.” The fact that what one owes to one’s parents can be described as a debt coupled with the idea that it can never be paid, indicates it is a driving force for understanding human relations. It is no surprise that early forms of currency such as cattle or shells were not utilized for acquisitions, but to rearrange relations between people. The situation would never be fully equalized though, because if it were, the human relations would cease.

One can see how the primordial debt theory of religion, once it is scaled up, gets transferred to the state when it becomes the ultimate national myth. The “guardian” of the debt is no longer religious nor parental, but some amorphous “debt to society” which becomes the intersubjective reality of the state. Governments use taxes to create money, and they are able to do so because they have become guardians of the debt that all citizens have to one another. Like, whoa.

Listen to this. If a person of means gives another person something without requiring compensation it is generosity. If the same person takes something from a person of means without their consent it is stealing. A debt somehow lies in between these two. Yet, hierarchical relationships do not operate by principles of strict reciprocity. If one views another person as above or below their status in society, reciprocity is no longer part of the equation. Debt creates inequality, and even further, not all debts of inequality are equal. The intersubjectivity of money creates inequality in that a debt is an exchange which is not yet finished. The goal in human relations is to keep the relationship going and this requires never fully squaring up. The relationship must forever be slightly imbalanced in some way. Likewise, money creates an eternal debt (an intentionally religious word) in the sense that the exchange can never be brought to completion. If it were, then the separation of the two parties would occur and money would be meaningless. Governments and banks do not want relational separation because then a majority of their purpose for existing would vanish. The relationship of inequality must be maintained, by force if necessary, so that the two parties can never walk away from each other, because to do so, would imply equality. The “haves” and the “have-nots” must always be clearly demarcated. The state enforces the agreement to ensure the continuance of the cycle. If one were to question which was more certain, death or taxes, the correct response is taxes. Cosmic or religious relations to human relations to government relations. And that’s how religious debt is the basis of money.

I really enjoyed making this episode. Can you tell? So, what do you think about the religious explanation for the economic world that humans have created? One in which we all must deal with. Literally, deal with. Leave a comment below and let me know what you think. Until next time, stay curious. If you enjoyed this, support the channel in the link below, please like and share this video and subscribe to this channel. This is TenOnReligion.