More on Money as Debt (from the 18th C.)

Filed Under books, capitalism, class, college studies, happiness, history, questions, quotes

Never say never, indeed. It’s nearly 4 in the morning, and I’m delighting over pamphlets from 1720 about an ill-managed public land bank experiment in Massachusetts. Having just watched Money as Debt sheds some light on the subject, as did the 1953 article The Land-Bank System in the American Colonies (courtesy of JSTOR).

The best thing is that my professor (the class is Muckraking: Activists’ Role in History) provided us with a format that links passages from the Colman pamphlet to another that refutes it (by a fellow named Wigglesworth).

Colman is in despair about the middle class landowners who have taken out paper currency loans against their estates through the public land banks; they are now in dire straits because there isn’t enough paper money in circulation to pay off the debts with interest. While I sympathize with Colman (but disagree with his faith in the private bank), one of Wigglesworth’s responses is what I want to note here (emphasis is mine):

For it is easie to see, that if we had never trusted one another, the worst Husbands of us all could not have spent more than we earnt ; for when we must pay ready Mony for every thing we buy, we can’t buy more than we earn Mony to pay for; unless we borrow Mony at Interest to support our Extravagance; a thing which but few would have been so foolish as to have done. Indeed when Debts are already contracted, Do but set up a Bank to borrow of, and we have found from sad experience already, that men will be ready enough to mortgage their Estates for mony to pay their Debts. But (I say again) where Debts were not before contracted, few men would have been so foolish, as to borrow Mony at Interest to provide needless Fineries and Gew-Gaws for their Families. The Folly of so few could not have affected the Country.

Oh wow; does any of this sound familiar?

I am fascinated by these papers, and also by the fact that in our society today - 290 years later - we are encouraged as a people to buy more in order to spur the economy, to take out more loans, to spend, and spend, and spend. That is our “role” as consumer-citizens. And yet, as individuals, we are shamed and chastised if unable to pay on our debts; then we are irresponsible, foolish, and greedy.

And while that may be the case (though, not necessarily), what then, is the vice? Is the vice to borrow money (at interest) in the first place, for things we can get by without? Or is the vice to fall into a situation where one cannot pay on the money borrowed?

Comments

3 Responses to “More on Money as Debt (from the 18th C.)”

Comrade Kevin on January 11th, 2008 2:25 pm

I was reminded of this sage advice.

“Neither a borrower nor a lender be”

It is a line from the play Hamlet, by William Shakespeare.
Sara on January 11th, 2008 6:41 pm

This post fits perfectly with the short film, “The Story of Stuff” (www.storyofstuff.com). Have you seen that?
nilkanth on June 11th, 2008 10:01 pm

I want Deposit a mony in my Account and By Chack