Inflation is a kind of slow debt relief that may have largely replaced the need for jubilees.

True. Lenders oppose inflation, debtors favor it.

Which is why corporate media has apoplectic fits whenever interest rates go up or unemployment goes down.

It's more complicated than lenders opposing inflation but debtors favoring it. That only works if people are pure lenders or pure debtors.

In reality most people carrying significant debt are people who are strongly affected by inflation of the prices of goods and services, and most people and institutions who are in a position to lend are not as affected by such inflation.

The most at-risk people are those who are both in a lot of debt and also affected by the rising cost of goods in services. This can be anyone carrying a significant mortgage payment (as a % of income) and supporting a family simultaneously. High inflation hits these people especially hard because pay raises and real-debt-dilution often do not keep up with the rising costs of goods and services.

This can cause a great deal of financial fragility in the short term, even if the individual has good long term prospects due to inflation-based debt dilution.

1. https://en.wikipedia.org/wiki/Marginal_utility#Law_of_dimini...

No? Interest rates can simply exceed inflation.

I am quite rabid as far as libertarians go, but even I acknowledge the necessity of bankruptcy protection.

Without it, lenders can lend to anyone regardless of whether it's likely to be paid back, or even whether or not it's possible for them to pay it back. Then those lenders turn around, and demand that all of society pays for debt enforcement through the court system (or in extreme scenarios, through punishment).

Lenders have a responsibility to only extend credit in narrow circumstances, or they need to lose protection for it. The easiest way to do that is with bankruptcy. Borrowers are still discouraged from using it (it's limited to once every 7 years, and punishes besides), so there's little moral hazard there.

Lenders that are businessmen rather than scammers are more than capable of the diligence necessary to avoid bad loans (and the few that are inevitable are a cost of doing business). Lazy, incompetent, or unethical lenders deserve the losses incurred from those practices.

I don't think any of this is a mark against capitalism.

Of course it requires debt relief, things go _wrong_ all the time, that’s just life and how the world works.

Debt relief is also necessary for a peaceful society. If you can’t legally discharge debt in some manner we’d have companies hiring enforcers like a shark loan would.

It’s not a problem of capitalism, it’s a problem of reality.

> It’s not a problem of capitalism, it’s a problem of reality.

I'm really not sure about that.

> Of course it requires debt relief, things go _wrong_ all the time, that’s just life and how the world works.

Yet funnily enough the people on top of all these vast structures sail away from their sinking ships on parachutes of gold (if they're even sinking: a lot of times they just sit and collect vast sums of unearned wealth because they had a lot of wealth already).

If debt is such a bad business why are so many massive institutions in it, not discharging debt, and raking in the profits by the shovelful?

> Debt relief is also necessary for a peaceful society. If you can’t legally discharge debt in some manner we’d have companies hiring enforcers like a shark loan would.

This however we can agree on. As the amount of debts that can be accrued and not discharged (student loans being the biggest) goes up, the economy seems ever more unstable and unsustainable. As it turns out when you strip mine your consumers wallets from every angle, eventually they seem to be unable to buy things for some reason. Then demand craters and your economy stalls.

And just to head off this reply I always get in these discussions about useless degrees and STEM and etc. etc., I think to be frank, if indeed we're only interested in financing "worthwhile" educations, then that should be enforced by the financier, no? A bank wouldn't loan you $200,000 to buy a single-wide trailer on rented land, the asset is not now nor would it ever be worth that, so why is a student able to borrow six figures for a again in quotes, "worthless" literature degree, and be strapped to that one decision they made for life?

I think you mistook my comment as a defense of capitalism. Although I do believe a system based on private property and individual freedom is superior to the alternative, I wasn’t making that statement. I was just pointing out something at a much lower level: we need debt relief because we don’t live in a perfect world, things go south and we need for people to be able to move on. That’s it.

We could talk about the inequalities built into the system, but that would be a different conversation.

> we need debt relief because we don’t live in a perfect world, things go south and we need for people to be able to move on. That’s it.

We need debt relief (AKA bankruptcy) to avoid actual debt-slavery, which is what preceded bankruptcy laws.

Ah that's very fair. My apologies.

Yes and: As an anthropologist, Graeber details historical examples of capital, markets, debt, currency, etc.

TLDR: They're all ancient.

Graeber doesn't try to define capitalism much less Capitalism. He cares about social structures and relations, not finance and monetary policy.

But absolutely do not take me as an authority on Graeber or these subjects. He spent decades researching and refining. I'm just relating my noob understanding of his writing.