thoughts on debt

UPDATE: 20 December: It seems this book is the abridged published version of  Margaret Atwood’s Massey Lectures, which will be repeated on radio national from 14 January 2010 at 6pm.

Margaret Atwood’s Payback: Debt and the Shadow Side of Wealth is a short book about the social construct of debt: where the concept comes from, the part is plays in our culture, and how it is linked to two of the strongest human emotions: desire and fear. She explores the idea of debt from different angles and traces the concept through human mythology and behaviour.

Atwood first considers fairness, arguing that borrowing and lending could not have developed without fairness.  She traces it back to the most ancient myths, such as Ma’at and Iustitia, and forward to literature, using The Water Babies as her primary example.  She explores the history of the idea of moral balances and how humans in all cultures weigh up deeds and behaviours against each other.  She also observes that a concept of cheating and fairness has also been observed in other animals.

In Debt and Sin, Atwood tries to answer the question ‘is it morally wrong to be a debtor’. She teases out the originals of the word debt (which was once used interchangeably with ‘sin’, for example in the gospel of Matthew 6:12); but also relates ‘sin’ to its origins in ideas of sacrifice, which hark back to fairness and moral balances. Much of this exploration focuses on the Christian tradition. She then brings these ideas together to establish a basis of accounting and balance sheets, pointing out their link to memory – without memory, there is no debt. She notes that the earliest written records appear to be accounting balance sheets, and notes that debt is inconsistent with oral forms of communication.

Atwood notes that, if being a debtor is a sin, then so too must be being a creditor, as one cannot exist without the other.  She remarks on several clichés here, such as Polonius’ ‘neither a borrower nor a lender be’ and ‘wiping the slate clean’ – noting that both of these encapsulate the idea that a healthy equilibrium is required between debtor and creditor in a functioning society.

Moving on to a chapter called Debt as Plot, Atwood returns to the idea of debt and memory, and that a debt is essentially a narrative, caused by a string of events and actions over time.  She traces some classic plots that use debt  as a plot device overtly (Scrooge, Vanity Fair) and covertly (Dr Faustus, Madam Bovary. She uses these to talk about non-monetary debt, how it can be conflated with monetary debt (through the idea of sin), and how we choose to ‘pay’ for our sins and bargains; and notes how, especially in 19th Century literature, debt (either money or behaviour) is a governing leitmotif of Western storytelling.

The fourth chapter is called The Shadow Side, and looks at what happens when the power equilibrium between debtor and creditor is upset – loan sharks and criminal syndicates, liquidation, rebellion and revolution, and also revenge. She notes how our cultural understanding of debt and fairness can be used to stir up hatred, using examples like Idi Amin’s expulsion of ethnic Indians from Uganda, and the experience of Chinese immigrants in various Asian countries; but also how it can be used against oppressors, such as the anti-colonial uprising around the world that have centred on tax.

In the last chapter, Atwood moves away from the non-fiction essay style of the previous four, and writes a fictional piece about Scrooge and a Spirit of Earth Day Past who appears to him; and how his ‘payback’ may have been different under the debt constructs of the modern world.  I didn’t finish this chapter because I found it annoying.

The last chapter aside, this is an interesting and thought-provoking book.  It is always healthy to explore ideas that we tend to take as given, and to understand where in our culture they come from and how we are influenced by deep-seated cultural factors in making decisions.The book was published around the time of the global financial crisis, and while it doesn’t tell you why residential mortgage-backed securities and CDOs are bad or good things, it helps to explain some of our reactions to the events of the past year.

Payback: Debt and the Shadow Side of Wealth
Margaret Atwood
Bloomsbury, 2008

the reluctant fundamentalist

Shortlisted for the Booker Prize in 2007, Mohsin Hamid’s second book The Reluctant Fundamentalist is a tale told by a young Pakistani to an unnamed, unspeaking, unknown American; about his journey from the American dream to political fundamentalism in Pakistan.

Changez is a Princeton graduate who wins a job at a prestigious management consultancy.  For a time, he lives the high life in New York, with an expenses account and a tentative romance with an upper-class American girl, Erica. Then someone flies a plane into a building.  Changez becomes an outsider in his adopted city. Erica is drawing away from him into deep depression.  America attacks Afghanistan. Changez becomes obsessed with following the news from home, and can’t find meaning in his job any more. Erica disappears.  Changez resigns, and leaves New York for his home in Lahore.

As this story unwinds, the tension slowly and imperceptibly increases as darkness falls around the cafe in which Changez and his American listener are sitting. Hamid is leading the reader somewhere, just as he leads his American listener back to his hotel, along a dark street where menacing shadows are drawing closer to the pair.  The story ends with a threat of violence which suddenly reveals what Changez has become and exactly why the American has been so interested in his story.

The Reluctant Fundamentalist is one of the best books I’ve read this year. The story seems simple but  Mohsin Hamid builds it towards a stunning and terrifying climax that left me holding my breath for the last few pages.  It is also a clear and nuanced analysis of the tensions between Islamic countries and the West as they are experienced by ordinary people. It’s a short book at only 184 pages – Mohsin Hamid has said ‘I’d rather people read my book twice than only half-way through’, and I would defintely read it again.  Highly recommended.

Further reading: ‘Why do they hate us‘ – Mohsin Hamid, Washington Post

The Reluctant Fundamentalist
Mohsin Hamid
Hamish Hamilton, 2007

all the president’s men

Written by the two journalists who uncovered the Watergate scandal, All the President’s Men is part detective story, part political thriller and part first-draft of history.  Bob Woodward and Carl Bernstein ended up on the Watergate story by accident, stayed on it despite personal difference, and ultimately uncovered one of the greatest political scandals the US has ever known, which led to the resignation of President Richard Nixon.

The book was written and published before the full story of Watergate was known, and so it’s sometimes a bit confusing.  It’s slow to start with, the significance of events and people are not clear, and the two journalists seem to uncover a lot of information that doesn’t make sense. There are a lot of names to remember, and many of these characters don’t appear again.  However, these are all natural consequences of the book being an account of real events, rather than fiction.  Once it becomes clear to the journalists who the major players are, the story begins to make more sense and the pace picks up.

The journalists are like detectives in the way they collect and assemble information, but unlike detectives, they can’t compel anyone to talk to them, which makes their job harder and the story more frustrating.  Everything they publish has to be verified by at least three sources, and many times it’s ‘obvious’ what is going on but the story can’t advance until things are verified.  The journalist’s frustration at times like these is evident.

Because the book ends before the full extent of the Watergate scandal is known, the end is a bit ambiguous and unsatisfying, I suppose because we now know what happened, and because the thread of events now looks clearer than it would have at the time.

What I found most interesting about this book was the background it gives about American politics and political institutions.  To someone from a country that is at best ambiguous and at worst deeply cynical and government and institutions, the reverence that Americans (even investigative journalists) have for the office of President seems strange. For a reader used to the Westminster system, the executive system of government looks opaque and ripe for cronyism.

The other interesting aspect of the book is the window it gives onto the world of investigative journalism and news in the days before computers, mobile phones, and internet.  The journalists meet with sources in person, they use ingenious things like reverse telephone directories to track down people, and records (both the journalists’ and those of their investigative subjects) are all single-copy paper documents that can disappear quite easily.  On the other hand, their sources in government are happy to talk on the phone from their offices – obviously the days of manual switchboards, untraceable calls, and office doors rather than open plan layouts made it safer.

All the President’s Men is a good read, and highly recommended.  I’m keen to see the movie and perhaps read Woodward and Bernstein’s other Watergate book, The Final Days.

All the President’s Men
Carl Bernstein and Bob Woodward
Bloomsbury, 1974