Debt: The First 5000 Years - autonomous learning

358 DEBT
believe this, and particularly, starts treating credit institutions as if
they really will be around forever, everything goes haywire. Note here
how it was the most sober, cautious, responsible capitalist regimesthe
seventeenth-century Dutch Republic, the eighteenth-century British
Commonwealth-the ones most careful about managing their public
debt-that saw the most bizarre explosions of speculative frenzy, the
tulip manias and South Sea bubbles.
Much of this seems to turn on the nature of national deficits and
credit money. The national debt is, as politicians have complained
practically since these things first appeared, money borrowed from
future generations. Still, the effects have always been strangely doubleedged.
On the one hand, deficit financing is a way of putting even more
military power in the hands of princes, generals, and politicians; on the
other, it suggests that government owes something to those it governs.
Insofar as our money is ultimately an extension of the public debt, then
whenever we buy a newspaper or a cup of coffee, or even place a bet
on a horse, we are trading in promises, representations of something
that the government will give us at some time in the future, even if we
don't know exactly what it is.110
Immanuel Wallerstein likes to point out that the French Revolution
introduced several profoundly new ideas in politics-ideas which,
fifty years before the revolution, the vast majority of educated Europeans
would have written off as crazy, but which, fifty years afterward,
just about anyone felt they had to at least pretend they thought were
true. The first is that social change is inevitable and desirable: that the
natural direction of history is for civilization to gradually improve.
The second is that the appropriate agent to manage such change is
the government. The third is that the government gains its legitimacy
from an entity called "the people."111 It's easy to see how the very idea
of a national debt-a promise of continual future improvement (at the
very least, five percent annual improvement} made by government to
people--might itself have played a role in inspiring such a revolutionary
new perspective. Yet at the same time, when one looks at what men
like Mirabeau, Voltaire, Diderot, Sieyes-the philosophes who first
proposed that notion of what we now call "civilization"-were actually
arguing about in the years immediately leading up to the revolution,
it was even more about the danger of apocalyptic catastrophe, of
the prospect of civilization as they knew it being destroyed by default
and economic collapse.
Part of the problem was the obvious one: the national debt is,
first, born of war; second, it is not owed to all the people equally, but
above all to capitalists-and in France at that time, "capitalist" meant,