Pillars of Debt Don’t Stand Forever

Debt is either devil or savior. Neither suggests that it is just about the numbers. In a concise but wide-ranging review essay, John Gray notes the truth about markets:

Market economies are not underpinned chiefly by economic theories. They rely for their legitimacy and continued functioning on ideas about right and wrong, fairness in society, and orderliness in the world. In the boom years many of these ideas were discarded as erroneous or redundant. Now that the boom has been followed by bust it may be useful to reexamine ideas about debt, and consider how they may fare as governments use all the instruments at their disposal to avert a slide into depression.

His piece The Way of All Debt discusses “Payback,”, a book of essays on debt by the novelist Margaret Atwood, published as the downturn was happening last October.
What does a humanist have to say about the hard and cruel world of numbers? Plenty, Gray says. By drawing on debt’s role in religion, literature and society, “Atwood has combined rigorous analysis, wide-ranging erudition, and a beguilingly playful imagination to produce the most probing and thought-stirring commentary on the financial crisis to date.”

Gray notes the obvious ojections, that her views are simply weak analogies, by saying

In fact she is advancing the contrary and more interesting claim that economic activities involving borrowing and lending are metaphorical extensions of an underlying human sense of indebtedness. Beliefs about debt are not shadows cast by processes of market exchange. They are presupposed throughout much of human activity. Economic life invokes a sense of order in human affairs, widely dispersed throughout society.

Atwood argues that debt is shifting from being fashionable to being sinful.
If so, it will happen to the angst of many governments, including the U.S. government. Gray notes that many governments want us to borrow our way out of debt. If we do go back to happily borrowing, inflation is almost inevitable, which will punish those who saved instead of borrowing.

But Atwood, and Gray, note that debts must eventually be repaid. Ultimately, the planet itself will play the heavy, Atwood argues. I don’t know about her conclusion — it sounds a bit contrived, with an updated version of Scrooge as its vehicle. But in general the book sounds like a rich and rewarding read.