My take on this is that the ethic that enables credit to function sustainably is incompatible with the corporate culture we've created. Value judgements in our economy are increasingly made by corporations who can only value what they can measure numerically, and incapable of valuing humanity.
That's why I'm working on a scalable system of interpersonal credit money:
I think the problem is less "corporate culture" and more "human nature."
This is what the socialist/communist movements didn't understand - some people are individually ambitious at all costs. In capitalism, they can start businesses. In communism, they join the Party and work up the ranks. The difference is, in capitalism, you theoretically have different people controlling the guns and prisons and courts. In socialism, the ambitious people control the economic production but also everything else.
Anyways, this is a tangent from your project. But I think it's less business culture and more human nature. In a system where you can't generally build/invest/enterprise individually, people who want power don't shrug and say "oh well, I'll work for the common good I guess" - instead the start gathering power through whatever is available.
I wouldn't necessarily say that it's human nature, but Western culture. Yes, there are those who most value surpassing others at any cost, but that is their personal culture, and not the singularity of human nature. I think that people choose which roles of their multi-faceted human nature to act upon and which ones to avoid.
It's possible that an education that teaches the values mentioned in the article would give similar advantages as those in the past. The difficulty is that a large source of people's education is the surrounding culture itself, so people pick up values that they see others pursuing. So if young people see the example of adults endlessly accumulating wealth and spending frivolously, then those observing think, "hm, maybe this is a good idea," and so they emulate, and the problem continues. And for those who have been doing and valuing the same the same thing as their neighbours for so long, just assume that it's "human nature," and not some human choice with many advantages and disadvantages.
Well, IMO, "human nature" is to vague a term. I would say, it's more like, the tendency of majority to look for simplistic numbers/variables/quantities(P/E ratio,quarterly earning etc..). which pulls the public corporations towards local optima.
If this were a feature of "human nature," though, surely it would be a constant throughout history. Maybe the main point of the linked article is that this isn't so - credit has been a part of many different human societies, but hasn't led to the particular problems we currently face.
I started reading Graeber's book [1] 3 days ago. I'm only about 1/3 into it. The author is an anthropologist and tells his story from this perspective. So far, If I understand correctly what I'm reading, I think the author would not agree that 'savings' is the opposite of 'debt'. I also don't see the author as trying to get the reader worked up. Its a very interesting and though provoking read thus far.
Are you sure? I'm fairly certain that if I accumulate savings in the form of some non-debt-backed currency and keep it buried in a box it won't be the same as debt.
If we still want to regard that as debt, I could instead buy commodities and keep them in a warehouse, but I think there would be some temptation to say that "they are not savings because they are not currency."
Its a statement of the economics accounting identity I=S.
Actually, it's even more fundamental than that. If you wish to have (different, or perishable) goods/services tomorrow by forgoing them today (i.e., increase savings) you must find someone willing to do the opposite (who'd then be in debt to you). Money functions as an abstraction to hide the vast majority of this complexity.
When you lend your money to a bank (deposit it, buy a CD or bond, etc.), you become a creditor to the bank; the bank a debtor. They then lend that money to others; this the economically central function of a bank to match savers and borrowers.
> “I’m really scared of what could happen, because I bought property here,” said Sofia, who asked that her last name be withheld because she is still hunting for a new job. “If I can’t pay it off, I was told I could end up in debtors’ prison.”
That debt is such a part of most people's lives that the idea of being jailed for not currently having the means to pay it back is literally out of the Western world of thought.
Borrowing against future earnings is so accepted that to pay cash for something substantial is seen as an exception.
I don't know that I agree with you entirely. Debt prison just seems kind of dysfunctional to me; if you imprison me because I'm late paying you back... there's no chance I'll be able to pay you back!
Recent paradox in Ireland: rates are going down on Irish bonds because Ireland is getting a better rate from their bailout borrowings. The better rate means they spend less on interest payments, which decreases the chances of default. But the rate is itself used as a measure of the risk of default! So there is a feedback loop: high rates mean higher risk of default, and high risk of default justify higher rates.
That particular objection seems easily answered by debtor's prison combined with forced labor. Hell, people could be let out for 8 hours a day to go to their old jobs. The important part is that the privilege of spending money on anything but the most basic of needs is revoked.
(Not that I support debtor's prisons or anything, there're just a few ways in which they could obviously be done more intelligently).
Remember, debtors prisons in our own culture predate things like central credit reporting bureaus and garnisheeing laws. Without these things, what's the disincentive to not pay back your loans?
That's why I'm working on a scalable system of interpersonal credit money:
http://ripple-project.org