In lieu of an abstract, here is a brief excerpt of the content:

202 13 Debt’s Moral Kennan Ferguson According to Hegel, a quarrel about law arose between two ancient Roman jurists: Favorinus of Arelata and Sextus Caecilius. In response to Favorinus’s contention that laws needed to be based on real situations, Caecilius showed that while law had to make sense, it did not actually have to go into effect.1 He gave the Roman law on debt as an example. If a debtor was unable to repay his loan, the creditor had the right to his body, that is, to kill him or to sell him into slavery. In fact, if a debtor owed several creditors, they could cut up his body and divide it among them. The very horror of the legal result, Caecilius argued, made the trust and credit system so secure that the legal particulars could exist without ever being carried out. This particular debate can underlie a number of positions. For Caecilius it showed the nature of purely positive law; for Hegel it showed the need to synthesize the historical nature of law with its form; for the contemporary mind, it likely evokes a horror of such uncivilized practices. But for those of us attempting to better understand the dynamics and meaning of debt in their theoretical and historical contexts, this debate helps bring the extremities of debt, and of the burdens of debt, into focus. The intensity of this punishment, its symbolically charged meaning, remains germane today. The question here is less “How can debt be made less violent and gruesome ?” than it is “Why is debt so potentially violent and gruesome in the first place?” The stakes of debt have always been high: highly politicized, highly policed, and highly moralized. Not only was it ever thus, but it cannot be otherwise. Contrary to those who hope to eventually tame debt, to make it serve its proper masters (value, for example, or growth, or stability, or even “the people”), I argue that it cannot be otherwise. Debt’s Moral | 203 Balance Sheets Two major contemporary attitudes toward debt currently exist, which could be termed, in turn, “accountancy” and “accountability.” The first poses itself as morally neutral and takes as its exemplary vision a model of economics as purely technical in nature. Laws of supply and demand must be obeyed; profit serves as a neutral arbiter in the marketplace; rationality and foresightedness serve as the only major frameworks. In this reading, evaluation and value exist in separate spheres, and the confusion of the two is a category mistake. The second, the “accountability” model, seems to reject the accountancy presumptions entirely. Rather than seeing debt as neutral, it claims that debtors (and creditors) must be held accountable for the consequences of debts. This position sees debt as being left unchecked in the contemporary financial universe, running amok through some people’s lives for other people’s profit. In place of contemporary corporate capitalism , proponents of this position argue that we need to make debt serve people rather than allow it to feast on them. Debt and credit, while useful, must be brought to heel so that they may serve human (and humane) values. But both these outlooks, while putatively opposed, ultimately resemble one another, and both are wrong in the same ways. Both rely on a particular accountant ’s fiction, one practiced as early as the thirteenth century: that of “double-entry bookkeeping.” As codified by Luca Padcioli (an assistant to Leonardo da Vinci) in the fifteenth century in the Summa de Arithmetica, double-entry bookkeeping uses a “balance sheet” to summarize the state of a business through two parallel columns of “Assets” and “Liabilities.”2 By introducing the concept of “equity” to the liability column, balance sheets manage to balance: that is, both sides equal the same amount.3 While this fiction works astonishingly well to track and maximize cash flow and obligation , it also falsely intimates that debts always balance out, that equivalence to any debt always exists.4 Thus, in assuming that debt and credit have a proper balance, those who conceptualize debt often look for the moral balance, the proprietary interrelationship between credits and debits. In their fictionalization of debt and credit, they imply a false equivalency, a mythically balanced relationship. But this takes divergent forms. In the bookkeeping model, debt and credit cancel out one another; the weight of the world must be morally neutral, and human beings mistakenly read these transactions through ethical lenses. Thus those who claim that debts incur...

Share