Blog #2: Debt and the ethics behind the value of the dollar

David Graeber grabs the issue of debt by its neck in exposing the simplicity behind the relationship between the creditor and debtor. He first explains a conversation he had with a woman where the center of topic regarded the IMF (International Monetary Fund) and how they push countries into debt. The young woman had trouble comprehending why countries couldn’t pay back debts they had pushed themselves into. Graeber said that the IMF convinced third world countries to take loans (during a period of go-go banking) with low interest rates. They then during the late 80s and 90s, these third world countries encountered problems paying back their debt and the IMF enforced policies regarding their domestic control over services such as food reserves and limiting public services.

Graeber continues and presents the example of his time in Madagascar and that before he lived there, there was an outbreak of malaria. The government took action and created a mosquito eradication but due to financial issue, had to cut off the program which led to 10,000 deaths. Also Graeber focused on how it is not the debtor’s fault at his/her inability to pay off the loan but rather the lender (the banks). It is because of the “risk” that banks lend out loans. Without the risk, there would be no opportunity to make gains from interest.

My take is that the value of money has been replaced by the “digital value” of money. What I mean is that it has taken on a new form, not physical but rather numerical. We’re encouraged from banks to create new credit card accounts because statistics probably show that they would profit more from individual’s debts. Some individuals do not understand the principal of needs and wants and they cannot afford what they want and take on debt for simple gratification. Very few understand the value of the dollar. So unlike David Graeber I blame the debtor or individual, however you wish to classify it. But an equal share of blame should be placed on the banks. The high risks of NINA Loans are the primary cause of the housing bubble and instigator of the ongoing global economic crisis.

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3 responses to “Blog #2: Debt and the ethics behind the value of the dollar

  1. i aggree i believe that debt as alot to do from where your background is or how your family lived

  2. Excellent presentation of the “debt” problem and the various social forces at play. What you term “digital” money approximates what Graeber calls “virtual money,” as distinct from physical or “bullion” money. We are currently in an age of virtual money and according to Graber, historically there have been shifts between the two types. Graeber insists that the all the anthropological evidence suggests that “virtual” money was actually the original form of money, that elaborate credit systems existed *before* money took a physical form (as metal currency). Whether physical (a commodity in itself) or virtual, money is *always* numerical. Debt is an obligation that can be precisely quantified and *depersonalized*, which makes it transferable. It’s this process of quantification of *promises*, and the creation of an infrastructure (means of coercion) to enforce them that creates “debt” according to Graeber. Debt, Graeber memorably claims, is an “obligation that’s been perverted by math and violence.”

  3. I agree that the debtor should be to blame for acquiring debt they simply don’t have the money to pay off. This opinion of debtors being responsible is the moral values of debt Graeber was exactly talking about. Many tend to view debt as an obligation without realizing the individual responsibility of obtaining this debt.

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