C H R I S A .

G R E G O RY

On money debt and morality: some reflections on the contribution of economic anthropology

Peebles, in a recent review of the anthropology of debt and credit, found an astonishing consistency in the moral valuation of credit which is everywhere given a positive evaluation relative to debt. But why is this? Does it apply to creditors as well? What are the theoretical implications of these questions for economic anthropology? Key words debt, credit, economic anthropology, demand sharing

The problem
In this paper I offer some reflections on the ethnographic and theoretical contribution of economic anthropologists to the vexed question of money debt and morality, on what we have achieved, the present state of the question and future directions. The first and obvious contribution of anthropological research has been to considerably broaden our understanding of the notion of debt. Oceanic scholars have given us extremely detailed ethnographic accounts of the peculiar notions of debt that moka, kula, potlatch and other classic forms of ceremonial exchange create. Indianists, for their part, draw our attention to the three theological notions of debt that a Hindu male acquires to the sages, the gods and to the ancestors which have to be repaid throughout his life through the performance of special rituals. In order to narrow the scope of this essay, I will exclude these classic anthropological notions of debt and focus on that simple notion of debt that the lending of money creates and that the bookkeeper records. To narrow my focus even further, I will restrict myself to household debt and leave aside the notion of sovereign debt. The focus of my attention, then, is the domestic moral economy (DME), not the national political economy as classically understood. The DME is that domain where profit and loss and virtue and vice form an inseparable whole; or, to use Polanyis (1944: Chapter 4) famous formulation, where the economy is embedded in kinship and other social relations. Anthropologists have also made an important contribution to our understanding of money debt in this narrow sense. Their detailed ethnographic studies have charted
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the extraordinary diversity in the social organisation of the domestic moral economy across time and place; they have shown how familial relationships have shaped the qualitative form of money-lending transactions and its substantive content. Theoretical reflections on these data in comparative content have yielded important general insights, problematised old theories and posed new questions. This much is apparent from Peebless recent comprehensive review article, The anthropology of credit and debt (2010). He states his key finding in the following terms. When one surveys decades of anthropological literature on credit and debt, an astonishing consistency shines through much of the ethnographic data. Seemingly everywhere that credit and debt are discussed, we find many informants who enunciate a moral stance that credit is considered beneficial and liberating for the creditor . . . whereas indebtedness is more likely to be seen as burdensome and imprisoning for the debtor. (Peebles 2010: 226) Peebless important contribution has been to identify this astonishing consistency, one that poses two sets of questions. The first set are of a sceptical and clarifying kind: Does this moral valuation really transcend geographic place, historical time and the cultures of people? If so, what is the reason for this astonishing consistency? Why is it that people everywhere value credit as a good thing and debt as a bad thing? The second set of questions assumes the validity of the finding: Does the transcultural consistency of the moral evaluation of debt and credit also apply to the moral evaluation of money lender and borrower? Does it follow that creditors are always considered virtuous and debtors vicious? This essay is a rumination on these questions. In the first part I address the sceptical questions and argue that Peebless astonishing finding is indeed sound, that people everywhere at all times regard debt as a bad thing and credit as a good thing. I suggest some reasons for why the consistency of this moral judgement may not be so astonishing. In the second part of the paper I address the second set of questions and argue that the moral evaluation of the transactors is inconsistent, that it varies over time and place. I also consider some of the theoretical implications of this apparent paradox for future ethnographic research using illustrative material from the Pacific.

Is credit to debt as vir tue is to vice?

At first glance Peebless key finding about the generality of the moral stance people take on debt and credit seems implausible. Anthropologists are renowned for being merchants of cultural difference. The history of our discipline is defined by our success in revealing the cultural basis of natural explanations. In the sub-discipline of economic anthropology our founding fathers Malinowski, Mauss, Polanyi all developed their theories of exchange in opposition to the theories of natural economy propounded by free-market economists like Adam Smith and others. Given this history of our discipline, Peebless finding about the transcultural nature of this moral valuation does indeed appear astonishing. Could it be that he has made a mistake? Has he misinterpreted the literature? Has he unconsciously smuggled an assumption of his own into his review of the literature?
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The answer to these questions is an emphatic no. Peebless astonishing consistency is not an assumption. It is an empirical generalisation gleaned from a vast body of ethnographic literature. Furthermore his review, because it only deals with ethnographic material, only covers a small fraction of the evidence available. The historical archive from different countries around the world contains overwhelming evidence of the consistency of this finding. The sacred texts of the major religions of the world, as we shall see below, contain evidence of the generality of the moral evaluation as debt as bad and credit as good. It would be a tedious exercise to assemble this extra material to substantiate his claim because the relevant inquiry to be made concerns the nature of this empirical generalisation. The key point is that the finding is a generalisation, not a statement about a universal truth. It is analogous to the proposition Homo sapiens are bipedal, which is to say it admits exceptions. Thus the specific proposition Some men only have one leg does not deny its validity but is fatal for a universal affirmative proposition of the kind All men have two legs. But if biological anthropologists can give us a generalisation of this kind from a study of the comparative anatomy of animals, from whence does the generalisation of the virtues of credit spring? We are not astonished by the proposition Homo sapiens are bipedal, so why should we be astonished by an analogous proposition derived from the comparative analysis of money-lending practices? It is not obvious that credit is generally regarded as good, but why? One reason is the generalised confusion one finds in the ethnographic record and society in the world at large about the relationship between debt and credit. This confusion is very widespread. The double-entry bookkeeper even gets it muddled up sometimes. The first thing one learns in Bookkeeping 101 is that for every debit there is a credit; in Bookkeeping 201 one learns about the distinction between a debit and a debt and also about the distinction between a credit that is opposed to a debit and another sort of credit that is opposed to a debt. These issues are complex and it is no wonder that finance companies report that most customers are often very confused about the distinction between a debt and a credit (see http://finance.mapsofworld.com/credit/ vs-debt.html). The people who are most confused, though, are the subaltern members of the domestic moral economy, the sub-prime borrowers. Studies of women in the squatter settlements of the Pacific, for example, have found that financial illiteracy is almost total. Many do not even know the meaning of the word interest, let alone the distinction between credit and debt. An additional problem is that many development experts brought in to teach them about debt and credit are themselves muddled; among other things, they have failed to understand the subtle semantic changes that have occurred in the word interest over the past three decades. Anthropologists often overcome the confusion between debt and credit by holding conferences that privilege one term or the other. Thus the theme of Firth and Yameys conference in 1960 was credit. This much is clear from the title of their subsequent edited collection, Capital, saving and credit in peasant societies: studies from Asia, Oceania, the Caribbean and Middle America (Firth and Yamey 1964), where the word debt does not even appear in the index. Some 50 years later, this special issue arose from a conference that had debt as its central theme. Peebles, for his part, entitled his survey article The anthropology of credit and debt and noted that because debt is always already a dyadic relation that requires its opposite, I henceforth refer to credit/debt rather than trying to distinguish the two (2010: 226). But if we are to understand why Peebless finding is not so astonishing, then we must distinguish the two.
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But what is the difference between debt and credit? It is hard to find anyone who is able to answer this question coherently. The exceptions are money lenders. Successful money lenders are never confused about the distinction because their daily bread depends on it. Having a customer who is confused about the matter serves their interest, which is why they have tended to monopolise their knowledge of the topic. There are exceptions and it is from these more scrupulous money lenders that we must get a native point of view. Credit, as one finance company-funded website puts it, is the earlier portion of a debt transaction. An individual should have credit prior to obtaining a debt. This is one area where people become puzzled regarding credit and debt. The automobile loan or mortgage loan is offered in the form of a credit, nevertheless, it is converted to a debt as soon as it is obtained by an individual . . . When a person is looking for a mortgage loan of $200,000, he is actually searching for credit for purchasing his new home. At that point in time, he is seeking credit. (http://finance.mapsofworld.com/credit/vs-debt.html, emphasis added) Credit, then, is a shape shifter. Credit is something a person must request. Credit exists as a potentiality, as something belonging to the future. When the requestor is deemed trustworthy and is granted the loan, the credit becomes history and takes the form of debt. But this is not all there is to the story because there is a liminal phase, the present, the moment of commercial reincarnation when credit is reborn as debt and is exactly identical to it. The double-entry bookkeeper lives for this moment; he occupies the liminal space and records the exact time of its rebirth twice in his books, once on the left hand side of his ledger, once on the other side but always in exactly the same monetary terms. He does this using the language of debit and credit, an opposition that sounds confusingly similar to that between debt and credit. As Victor Turner reminds us, a person cannot occupy a liminal space without themselves becoming liminal persons. The double-entry bookkeeper is, therefore, a threshold being who is betwixt and between, neither here nor there; he is himself a double-entity who exists in mirror-image form. One part of his being records the debits and credits from the perspective of the money-lender, his mirror image alter-ego from the perspective of the money-borrower. The books of the double-entry bookkeeper are based on a liminal number, the infidel symbol zero. This number, which is neither positive nor negative, is a necessary product of the rule that for every debit there must be a credit. This was a revolutionary moment in the history of commerce and arithmetic, a fact developed by Rotman (1987) in his book Signifying nothing: the semiotics of zero. The central role occupied by double-entry book-keeping (principle of the zero balance) and the calculational demands of capitalism broke down any remaining resistance to the infidel symbol of zero, he notes (1987: 8) and ensured that by the early seventeenth century Hindu numerals had completely replaced Roman ones as the dominant mode of recording and manipulating numbers throughout Europe. We must therefore distinguish between three states in the money-lending process the preliminary, the liminal and the postliminary and keep these in mind when we are talking about debt and credit. We are in a Hegelian-type world were debt is identical to credit, the opposite of credit and the composition of the preceding position and opposition. However, Hegelian logic is not the key to grasping the essence of the difference between debt and credit, for time is the essence of it all. Potential credit
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(call it creditp ) is opposed to nothing if the request for credit is refused, but to actual debt (call it debta ) for the borrower when granted. This appears in the books of the lender as actual credit granted (call it credita ). The latter type of credit, credita , has an altogether different temporal relationship to debta than does creditp . In the case of a bank loan credita and debta , both can grow at exactly the same rate depending on the rate of interest agreed, and fall in unison as repayments are made. Familial loans at zero or negative interest rate behave in different ways over time. It is no wonder that most people are in a muddle about the issue, for it is confusing. For users of credit cards the difference between debt and credit seems to be the simple accounting shown in ones statement: debt is the amount owed, credit is the amount of unused limit, and the two amounts are not identical. The fact is, however, that credit cards are a form of financial invention that has complicated the relationship between debt and credit. The granting of a request for credit does not result in an immediate debt but allows the borrower to take up the offer of credit when they need it. Credit cards also abolish the notion of a fixed term of a debt by rendering it effectively perpetual. The ideal borrower, from the banks point of view, is one who maintains actual debt at the maximum allowable and pays off the interest accumulated on a regular basis. This enables banks to maximise its profits because interest charged on credit cards is always much higher than other forms of bank loans. The central point to be made about credit is that it must first be requested, be it bank credit or familial credit. This notion of request, we shall see below, is crucial for understanding familial money lending among the relatively poor in the world today. Historically the onus has been on the borrower to initiate this move. The recent development of sub-prime lending an epoch-making event in the economic history of money lending has temporarily reversed the situation as financial institutions have aggressively, and recklessly, extended credit to sub-prime borrowers who cannot repay. This has led to a boom and bust in the financial world, the effects of which we are still living through today. The question of the morality of money debt is now back on the agenda, but in a new way. It is one thing to talk about the morality of a money lending transaction the relative moral evaluation of credit and debt but quite another to talk about the morality of the transactors, the relative moral evaluation of lender and borrower. We now speak of banksters, a derogatory term that echoes terms used to describe the usurer of old. This raises issues that I will address in the next section. To understand the astonishing consistency of Peebless empirical finding, then, it is necessary to focus on the preliminary and postliminary states of a money-lending transaction: on credit as the future in the form potential debt and on credit as history in the form of actual debt. Once we do this it becomes obvious, I hope, why credit has a positive moral valuation and debt a negative one. The relationship is almost true by definition, almost because the relationship arises from the history of commerce not a priori from logic. This much can be established from an examination of dictionary definitions of credit and debt, from the etymology of these words, and from proverbs that, as Mauss (2007: 157) noted, can tell us much about the morality of a society. The word credit has many meanings in the dictionary, but all bear the words birthmark: credible, honour, repute, trustworthiness, etc. Lenders throughout the ages have looked for these qualities in their potential borrowers. Debt is not negatively valued by dictionary definition, but a deep history of impecunious debtors and importunate creditors has given us the notion of a bad debt. The operation of the law of contagious magic has ensured that the vicious moral quality of the adjective has cast its evil shadow
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over its accompanying noun. Strictly speaking, what is called a bad debt is, logically speaking, a loan at negative interest. The negative interest on a loan that is not repaid is minus 100%, one that is half paid back minus 50%, one that is fully paid back 0%, and one paid back with interest is plus x%, where x is the interest rate in question. The debtor is, by definition, someone who needs money and history tells us that they are ever-ready to receive money, but not always ready to pay it back. The Fijian villagers of today who flee in fear when the microfinance debt collector arrives are re-enacting an ancient postliminary debt ritual. Stories of this kind are so widespread that they have become fossilised in our proverbs. Some debts are fun when you are acquiring them, but none are fun when you set about retiring them. Running into debt isnt so bad. Its running into creditors that hurts. Credit is dead, bad pay killed it. The astonishing consistency that Peebles has found in the ethnographic studies of money and credit comes about because the whole history of the intertemporal relationship between a request for credit and the subsequent recovery of the debt has coloured the meaning of these terms with moral overtones. The moral valuation is a general one because the commercial principle on which it is based is general. To make a profit one must buy cheap and sell dear. This commonplace of economic anthropology is analogous to the biological anthropologists homo sapiens is bipedal. As Geertz noted in his study of the market economy of Morocco, the bazaar is more than another demonstration of the truth that, under whatever skies, men prefer to buy cheap and sell dear (1978: 29). The money lender be it the ancient village money lender or the modern bank also likes to buy his commodity cheap and sell it dear. As such, he is concerned to find the good creditor who repays his loan with interest and to avoid the bad debtor who doesnt. The history of money debt and morality, then, is the history of the pragmatics of commercial language usage. We use the word credit when we want to say money lending is a good thing and the word debt when we want to say that money lending is a bad thing. The language used to describe the work of Muhammad Yunus, the founder of the Grameen Bank, illustrates this. Grameen, it should be noted, means village and Yunus is a village money lender who lends money on interest to the poorest of the very poor. What distinguishes him from other village money lenders is his success both financially and socially: he is probably the biggest village money lender in human history (8.32 million borrowers in 2010) and perhaps the only one in human history who is not looked down upon as an exploiter of the human misery of the masses. Thus he is the managing director of a village bank, not a village money-lender; the 20% he charges for income-generating loans is called interest not usury as any rate over about 8% was called in the good old days; the loans he gives are called micro-credit rather than micro-debt; the people to whom this micro-credit is extended are called borrowers not debtors, 97% of whom are women. My point here is not that Yunus is a bad guy, but that because he is celebrated as a good guy the word debt is not used when talking about his money-lending activities. Needless to say, when he was awarded his Nobel Prize for Peace in 2006, he got it not because he has sent millions of the poorest of the poor women into debt but because he extended them micro-credit. Micro-credit, the Nobel Prize citation says (http://nobelprize.org) has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions. If this statement is true, then it is also true that micro-debt has proved to be a liberating force, but this language would not sound convincing.
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If the semantic valuation of the words credit and debt is always and everywhere associated with virtue and vice, then the use of these words is an altogether different matter. When we want to say that a money lender is a good guy, we use the language of credit; when we want to say that he is a bad guy, we use the language of debt. Valuations of this kind are historically specific and must be investigated on a case-bycase basis. Again the work of Muhammad Yunus can illustrate this. As people begin to question the success of his Grameen Bank, so too does the language begin to change. The title of a recent film, The micro debt: a critical investigation into the dark side of microcredit (Heinemann 2010), says it all: the dark side of micro-credit is micro-debt. And what does the investigation into the dark side reveal? Case studies of people for whom loans did not get them out of poverty, of instances where people paid interest rates from 30 to 200%, and allegations of corrupt dealings. Again, the truth or falsity of these claims is not my concern. It is the filmmakers use of the terms credit and debt that interests me, for it is yet another illustration of Peebless finding. This case illustrates the semantic contrast that is at the basis of his, by now, not-so-astonishing finding: credit is to debt as virtue is to vice, as light is to dark, as good is to bad, and so on. The case also illustrates the limits of this finding because the pragmatics of debt and credit poses much more interesting ethnographic questions. The move from semantics to pragmatics changes the terms of the debate from transaction to transactor, from the commonplace moral evaluations of credit and debt to the historically specific moral evaluation of lenders and borrowers.

Is lender to borrower as vir tue is to vice?

The answer to this question is an emphatic negative. There is no transcultural consistency in the moral valuation of creditors and debtors. To the contrary, the answer has varied over time and across place and across discipline. Most economists of today, for example, would argue that the question is badly posed because the commercial contracts involving money are morally neutral. They would concede, of course, that it has not always been this way, noting that money lending has long been considered a vicious activity and the money lender the epitome of evil. But such thinking, they argue, is a relic from the medieval dark ages of economic theology rather than modern political economy. Smiths classic text, An inquiry into the nature and causes of the wealth of nations (1776), they argue, turned thinking of this kind upside down. For the economist, then, Smith is an icon of freedom, a solid-gold statue of liberty. For the economic anthropologist, on the other hand, Smith is a straw man whose theories of natural economy provided the antithesis for their theories of domestic moral economy. Neoclassical economic theory is premised on the assumption of homo economicus, a rational calculating individual faced with the problem of satisfying unlimited wants with limited means. Economic anthropologists have substituted moralis personae, a person confronted with the moral dilemma of having to locate him or herself on a continuum of reciprocity that has the warmth of the caring and sharing household at one extreme and the cold, hard world of higgling and haggling with strangers in the market place at the other extreme. The former is the domain of positive reciprocity and the latter of negative reciprocity. The virtuousness of the former and the viciousness of the latter are implicit in the adjectives, but is also a moral judgement derived from a faithful reporting of the native point of view and Malinowskis informants are oft quoted
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here. When scornfully criticising bad conduct in kula, or an improper giving of gifts, Trobrianders say it was done like gimwali [barter] (Malinowski 1922: 189). While the notion of natural economy was used as a convenient antithesis for Malinowski and Mauss in the development of their theories, it was Polanyi (1944: 434) who was the first to identify Smith as the real target of attack. In his classic work, The great transformation: the political and economic origins of our time, he identified the period of the Industrial Revolution in England (roughly 17501850) as the period of the Great Transformation when the market economy emerged dominant. His grand narrative of this event is a variation on themes developed by Marx, Morgan, Dumont and many others. Adam Smiths two great works, The theory of moral sentiments (hereafter ToMS) and Wealth of nations (hereafter WoN), were published in various editions over the period 1759 to 1790. As such, he is viewed as an ideological revolutionary, a positive evaluation in the eyes of neo-liberals, a negative evaluation in the eyes of critics. However, a closer examination of Smiths writing, especially his ToMS, reveals a number of surprises. When it comes to the morality of money lending, he was by no means a revolutionary. That status belongs to Bentham, who came shortly after him. Furthermore, what Smith had to say about the morality of money lending anticipates much of what economic anthropologists up to the time of Sahlinss (1972) Stone age economics had to say about the matter. If we are to move forward in our theoretical understanding of domestic moral economy, it is necessary to understand Smiths role in the Great Transformation of the moral approach to money lending in Christian Europe. Benjamin Nelsons The idea of usury: from tribal brotherhood to universal otherhood (Nelson 1969) provides the historical context. His book covers the ethical evolution of the West in three phases: the kinship morality of the tribal brotherhood; the universal brotherhood of medieval Christianity; and finally the utilitarian liberalism of today. Nelson is a story teller in the classic narrative tradition. His story has five parts and it chronicles the vicissitudes of his prime protagonist as he wanders through the Western Christian World. And who is his prime protagonist? The Deuteronomic double standard, the Old Testament commandant on usury that formed the cornerstone of the blood brotherhood of the Hebrew tribesmen. 23:19. Thou shall not lend upon usury (neshek) to thy brother (lahika) . . . 23:20. Unto a stranger (nokri) thou mayest lend upon usury; but unto thy brother thou shall not lend upon usury . . . (Nelson 1969: xxxxi) Or to use more modern colloquial language, Screw the other not your brother. This Deuteronomic double standard of the Hebrew tribesman stands opposed to the New Testament passage in Luke 6:35, which provided the basis of a different morality rooted in the Brotherhood of Man under the Fatherhood of God: But love ye your enemies, and do good, and lend, hoping for nothing again; and your reward shall be great, and ye shall be the children of the Highest: for He is kind unto the unthankful and to the evil. (Nelson 1969: 8) This formed the cornerstone of the universal brotherhood of medieval Christianity. Nelsons book chronicles, in fascinating detail, how negative moral ideas about debt and usury became transformed into positive moral ideas about credit and interest as
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the notion of a Tribal Brotherhood was replaced first by the Universal Brotherhood of medieval Christianity then by the Universal Otherhood of today. His story takes us up to the time of Adam Smith and beyond, to the time of the emergence of industrial capitalism in England. Today the neo-liberal consensus is that the interdiction on usury was the work of the Dark Ages when commerce was at its lowest ebb. A commercial society must be supported by interest for interest is the soul of credit and credit is the soul of commerce (Nelson 1969: 119), language which suggests that the economic theology of old lives on. What Nelson gives us, then, is a moral history of the transition from money lending as debt creation and something bad, to money lending as the extension of credit and hence something good. I will not even try to summarise this history because I am interested in the moral valuation of different numerical rates of interest. We tend to think of interest as a positive number. The fact is, however, that it is a quantity whose value ranges from minus infinity to plus infinity and includes the infidel number zero betwixt and between these two extremes. All of these numbers have different moral valuations that have varied throughout history. Four cases must be distinguished: negative interest rates, zero interest rates, low interest rates and high interest rates. Usury is the name for a positive rate of interest that is deemed high, but the magnitude of the positive rate of interest considered bad clearly varies from culture to culture. Implicit in the Deuteronomic double standard is the idea that only a zero rate of interest is good and anything above this is considered bad. In Luke 6:35 we get the idea that negative interest is good, i.e. the loan that is not repaid, the bad debt as it is called today. The moral evaluation of the negative interest rate and zero-interest rate cases are of the greatest interest to anthropologists for they are ambiguous states that admit of a range of non-commercial interpretations. For example, the negative-interest rate case can be interpreted as a one-way gift or an alienated gift, as Parry (1986) has suggested that the Hindu gift called daan might be glossed. Indeed, the ideology in Luke 6:35 has resonances with the Hindu theology. Gifts of the daan-type, Trautmann (1981: 279) has noted, involve a theology of reciprocity rather than a sociology: the giver is repaid with religious merit rather than a material object in a like-for-like transaction. The receiver, the Brahmin, acquires material objects such as food grains and money free of any obligation to repay. This, at least, is the Brahmanic theology; subaltern economic theologians, Ranajit Guha (1985) reminds us, often see things differently. The ancient Indian moral codes dealing with the morality of positive rates of interest is also an interesting variation on Deuteronomic double standard. The Laws of Manu (VIII, 1412) define 2% a fair rate for a Brahman, 3% for a Warrior, 4% for a Merchant, and 5% for a Sudra. Lending above these stipulated rates was called usury. This is a quadratic standard rather than a double standard and suggests that sub-prime lending may have been an ancient Indian invention. The Christian and Hindu moral codes are all variations on the same theme: lending at low, zero or negative rates of interest is a virtuous activity; lending at relatively high rates of interest a vice. But what of Adam Smith? He transformed ancient economic theology into modern moral economy, but was not a revolutionary when it came to money debt and morality. To the contrary, he merely restated the ancient theology in a new language.
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Smith is celebrated as the father of modern economics, but only a cursory familiarity with his work is needed to reveal the real kinship relation. For a start, the theory of economic value developed in his An inquiry into the nature and causes of the wealth of nations (Smith 1776) is a labour theory of value not a marginal utility theory of the kind that was later developed by Bentham, Jevons and others. On this account, Smith is the father of Ricardian economics and the grandfather of Marxian economics. Secondly, the theory of moral value he developed in his other great work, The theory of moral sentiments (Smith 1759), is a theory of affective individualism, not the rational individualism of 20th-century homo economicus kind. As the title of his book suggests, he was concerned with moral sentiment rather than moral reason. He was one of the last great sentimental moral philosophers. There is a sense, too, in which economic anthropology is the bastard offspring of this unacknowledged father. Smiths theory of affective individualism has the figure of the impartial spectator at its centre. In Nelsons terms, this is an Other who has become at one with the Self. The impartial spectator is the internalised Other who takes up residence in the breast of the affective individual. Smiths favourite image for the impartial spectator is that of the great inmate of the breast (ToMS: III.I.43). In other words, the impartial spectator takes up residence in the heart and soul of the non-participant observer, where he moderates the passions of his host and guides him in right conduct: it is only by consulting this judge within, says Smith, that we can ever see what relates to ourselves in its proper shape and dimensions; or that we can ever make any proper comparison between our own interests and those of other people (ToMS: III.I.43). This affective individual is a cool-headed character whose judge within is familiar with Aristotles table of virtues and vices, and is able to act with equanimity in all spheres of action and feeling. Thus in the sphere of pleasure and pain, he opts for temperance, the mean between the excess of licentiousness and the deficiency of insensibility; in the sphere of getting and spending, he opts for liberality rather than prodigality or illiberality; and so on for all the other spheres of action and feeling. Anthropologists have been very selective in their reading of Smith. Few get beyond the oft-quoted paragraph in the WoN about the natural propensity of homo sapiens to truck, barter and exchange. However the ToMS has many surprises in store for the economic anthropologist, for here we find that the morality of the affective individual varies with kinship distance and along with it the morality of the interest rate that should be charged on a money debt. The affective individual is, of course, concerned with himself in the first instance. Next his family: After himself, the members of his own family, those who usually live in the same house with him, his parents, his children, his brothers and sisters, are naturally the objects of his warmest affections. They are naturally and usually the persons upon whose happiness or misery his conduct must have the greatest influence. He is more habituated to sympathize with them. (ToMS: VI.II.5) Within the family it is more strongly directed towards ones children. The first friendships are with brothers and sisters; with cousins the mutual sympathy weakens. The children of cousins, being still less connected, are of still less importance to one another; and the affection gradually diminishes as the relation grows more and more remote. (ToMS: VI.II.9)
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Thus what is called affection, he argues is in reality nothing but habitual sympathy (ToMS: VI.II.10) and this continues to weaken as the net widens to include the neighbourhood, the community and the state. The rise of the state and of commercial society did not signal the advent of the rugged self-interested individual for sympathetic feelings are developed with neighbours and friends within the workplace. (ToMS: VI.II.19) Thus the form of money lending between people who are kin, neighbours and friends will be governed by the sympathetic relationship that exists between them. On the question of money debt and morality, he notes that moral sentiment varies with kinship distance in a way that can only be fully understood by means of concrete analyses of particular cases. If your friend lent you money in your distress, ought you to lend him money in his? How much ought you to lend him? When ought you to lend him? Now, or to-morrow, or next month? And for how long a time? It is evident, that no general rule can be laid down, by which a precise answer can, in all cases, be given to any of these questions. (ToMS: III.I.121) Money lending of a commercial kind between non-kin is governed by a different morality based on mercantile common sense. Ask any rich man of common prudence to which of the two sorts of people he has lent the greater part of his stock, to those who, he thinks, will employ it profitably, or to those who will spend it idly, and he will laugh at you for proposing the question. (ToMS: II.4.2) The two obvious points that Smith make then are, firstly, that lending money to friends and relatives at negative and zero rates of interest raises all sorts of dilemmas and a host of questions for which there are no simple answers and no general rules to guide us. The second obvious point that Smith makes is that lending money at interest to a merchant who will use the money productively is a good thing because credit is the life blood of commerce; but lending on a commercial basis to someone who will spend it idly is a stupid thing to do because they will not be able to repay the loan. This raises the question of the amount of interest to be charged on commercial loans. Smith had strong illiberal views on this. The rate must not be usurious he said; it must not be set at a rate higher than the going rate of profit on capital because that would prevent sober people from using it to venture into competition. If the legal rate of interest in Great Britain, he said, was fixed so high as eight or ten per cent, the greater part of the money which was to be lent, would be lent to prodigals and projectors, who alone would be willing to give the high interest (WoN: II.4). Smith, then, did not turn the pre-history of thinking of money debt and morality upside down; rather, his two great works provide a synthesis of it. Bentham was the true revolutionary and it was precisely on the point of high interest rates for commercial loans that he took leave of Smith. A person should be at liberty to make their own money-bargains said Bentham. no man of ripe years and of sound mind, acting freely, and with his eyes open, ought to be hindered, with a view to his advantage, from making such bargain, in the way of obtaining money, as he thinks fit: nor (what is a necessary consequence)
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anybody hindered from supplying him, upon any terms he thinks proper to accede to. (Bentham 1843: Letter 1) The general acceptance of this valuation was the death of the notion of usury. Hitherto usury was generally defined as a rate of interest in excess of around 58%. The revaluation of rates of interest in excess of 8% as virtuous meant that the word usury no longer had meaning for the Big End of town. Economic anthropologists have targeted the wrong man in Adam Smith, for it is Bentham who is the true straw man and quite literally so. In his will he requested that his body be dissected as part of a public anatomy lecture. His head and skeleton were then stored in a wooden cabinet called the auto icon, with the skeleton stuffed with hay and dressed in Benthams clothes. University College London acquired the auto icon in 1850, where it is still on public display. Benthams head is now made of wax, but his spirit lives on in the neo-liberal ideas that dominate the world today. Contemporary moral philosophy and political economy owes much to him. For example, Peter Singers moral philosophy builds on Benthams work on animal liberation, but it was Jevons mathematical formulation of his theory of pleasure and pain in the 1870s that revolutionised economic theory, leaving little space for those who argue that economics should be wedded to the softer disciplines of history and anthropology. Mandevilles famous maxim, private greed, public good, was given a new twist: rational selfinterest, public good. Thus greed, a vice, was replaced by a new found virtue, rational self-interest. Smiths moral sentimentalism was rationalised and a new moral philosophy and political economy was born. Smiths rhetoric of the invisible hand of the market was appropriated and given new meaning within this new theory of value. As for the theoretical contribution of economic anthropologists, it can be seen that our most celebrated achievement, the theory of reciprocity, is Smithian and pre-Smithian rather than post-Smithian. The theory of gift exchange we have developed is nothing more than a fully fleshed out version of the Deuteronomic double standard of the tribal brotherhood. But is this all we have achieved? Has all our careful ethnographic work simply lent credence to Mausss notion that credit and debt stand as an inseparable dyadic unit, as Peebles notes (2010: 226)? Peebless review of the literature correctly notes that Mausss classic text on the gift has been foundational, but he did not address there the emerging critique of the Maussian paradigm and the implications of this for our understanding of debt and credit as an inseparable whole. What is this emerging critique? What new questions does it pose?

The emerging critique of the Maussian paradigm: some evidence from the Pacic
The classic Maussian theory of reciprocity as developed by Polanyi, L evi-Strauss, Sahlins and others has its origins in the early ethnography of the Australian Aborigines and other indigenous peoples who lived in remote communities and whose exchanges were made between moieties and informed by cross-cousin marriage rules. Contemporary ethnography among Aboriginal people in urban areas whose economy has become completely monetised has contributed to an emerging critique of the Maussian tradition. Thus when Peterson heard an informant say I want to owe you five
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dollars (1993: 860) and coined it demand sharing, he realised that requests for credit of this kind posed new questions for the theory of domestic moral economy. These were taken up and developed by MacDonald (2000), who noted that the obligation to give in response to demands, without expectation of return, sets up a different dynamic in social relations. The Maussian legacy, she argues, blinds us to the reality of demand sharing and its implications. The fact that the demand-sharing literature has escaped inclusion in Peebles review is proof of her argument [but see Peebless contribution to this volume]. But what are the implications of demand sharing for the anthropology of money debt and morality? Demand sharing is not something the Australian Aborigines have discovered. To the contrary, it is very widespread throughout the Pacific, where different countries have special names for it. In Fiji, for example, it is called kerekere, from the verb kerea, to request. Sahlins (1962: 20314) devoted a chapter of his ethnography Moala to the analysis of this notion. Interestingly, neither the word nor the idea rates a mention in his classic work on reciprocity (Sahlins 1972). However, he returned to the issue recently in response to an article by Nicolas Thomas (1993). Sahlins (1993) argues that kerekere was a feature of pre-colonial Indigenous Fijian society. This was undoubtedly true, but it is also true, as Thomas argues, that the idea has flourished in the colonial and post-colonial era. And so too have the debates about its morality (Spate 1959: 24): Is it familial theft? Is it a barrier to economic development? When it comes to the question of money debt and morality in the Pacific today, there can be no better starting point than Marilyn Stratherns No money on our skins: Hagen migrants in Port Moresby (1975). This book is one of the unrecognised classics of economic anthropology. The method she followed here could be no better illustration of Smiths point that no general rule can be laid down when it comes to understanding lending money between friends and relatives. Recording a transaction is not a simple matter of double-entry booking, but rather one of collecting family histories and other case studies that help us make sense of what is going on in concrete cases. Stratherns book was way ahead of its time and it as an absolutely necessary manual for those who want to understand some of the pressing issues that face people living in the Pacific and elsewhere today. In the 40 years since Strathern wrote her book, the Pacific has been transformed beyond recognition. While the values of the tribal brotherhood of old still linger on, they now must adapt to a world where the transnational family has become a reality. If money and the morality of market exchange defined the boundaries of the tribal community of old, then money constitutes the internal essence of the transnational family today. This is because the development and growth of the transnational family has gone hand-in-hand with the growing importance of remittances globally. Official figures reveal that global flows of money are now twice the size of overseas development aid. Remittances have grown at an annualised growth rate of 36 per year in the Pacific since 2000 (AusAID 2008: 312). These official figures, it is generally agreed, are serious underestimates because they ignore informal flows. There is now a vast literature on the transnational family and remittances in the postcolonial Pacific (Lee and Francis 2009). The micro-sociology of DME can not only help us understand the macro-economics of international remittances, but also of intranational inter-household money flows. The values informing these money flows are complex, but requests for money and credit from kin play a central role. These requests to receive money raise questions that overlap with the classic problems of gift exchange and the obligations to give. A request for money of this kind is a request for credit from
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someone who wants to be in debt. But when these requests are prefaced, as they often are, with a Hey brother or a Hey sister, the addressee knows they are confronted with a money loan of the negative-interest or zero-interest kind and the principal concern is how to negotiate the request, a problem that will vary from case to case. I illustrate the issues at stake with some data I have collected in Suva. Single motherhood, my genealogies show, has grown in importance in recent times and mothers rely on their natal clan for support in kind in raising their children. When single mums need money for everyday expenses, they have two options: informal loans from family and friends or formal loans from the banks and retail outlets. Money of the former kind for the very poor is limited in size to $5 or $50 at negative and zero interest rates respectively; if they want to borrow larger amounts, then they must go to the banks. The language used to get a $5 or $50 loan involves the use of the verb kerea, to request, but in two quite distinct ways. The first is Au kerea $5, Give me $5. This, my consultant said, is a demand that can only be made of very close relatives and friends. This transaction is a one-way flow. The person giving in to the demand knows that the money will not be returned, i.e. the interest rate is negative. One does not ask for more than $5 this way because the requestor knows that it will be refused. To get up to $50, my consultant said, one needs to rephrase the request using the polite form of the verb. Kerekere meu dinautaka e $50. Au na qai sauma tale. I humbly request you give me a loan of $50. I will pay it back. This is a request for an interest-free loan and use of the polite form of the verb, kerekere, is essential. Again one must not ask for more, because it will be refused. For the elite Fijian, the matter is, of course, very different. Much larger sums can be obtained via the kerekere system. For example, Ratu Sir Kamisese Mara, the paramount chief who was Chief/Prime Minister from 1967 to 1992, had his education at Oxford financed by members of his close kindred group. Ratu Mara tells the tale of how in 1949 his uncle, Ratu Dovi, visited him in Oxford and asked for some money. Mara replied that he had none, to which Ratu Dovi replied: Yes you have. You have three hundred pounds in the Bank of NSW. The money has been deducted from my salary until 1948 to pay for your education. Well take it. Its yours, replied Mara. Well I would like to buy you something, he said and bought Mara a dinner suit (Mara 1997: 27). Needless to say, Fijians, like the Australian Aborigines, have turned the art of requesting and dodging requests into a high art form. So too have the Indo-Fijians among whom the art takes on an altogether different form that reflects their distinctive culture and economy. When I asked one well-to-do Indo-Fijian about the practice of kerekere among them, he laughed. No, he said giving me the rich relatives point of view, Indo-Fijians are different. We look around for the tall timber and work out a strategy to strip it bare. The first move is to soften up the rich relative by pleading for a loan on compassionate grounds. There are three types of compassionate loan we cannot refuse: those for funeral expenses, marriage expenses and health-related purposes. Having got loans from you for these purposes they then keep laying it on. We receive no gratitude for the money we give them and they often dont repay. Indo-Fijians and elite Fijians can get large interest-free loans for school fees from relatives, but poor Indigenous Fijians cannot. They must take out sub-prime loans at super-prime interest rates from banks. Such is the case with women like Lydia, who needed $1,000 for her sons first year at a boarding school. It is useful to look closely at this case because it provides some insights into the profitability of sub-prime lending and also of the moral semantics of commercial language usage today.
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The interest on unsecured loans in Fiji in 2012 was about 10% flat, which is by no means usurious by the global standards of today. However, Lydia was also charged a bank establishment fee of $125, which added another 12.5% to her debt instantly. The term of her contract was 12 months and she was obliged to pay twelve $5 monthly service charges for the electronic deduction from her bank account. This added another $60 to her cost of borrowing. Like all low-income earners, a month is a long time and out of harmony with the weekly rhythms of the economic life of the poor. Lydia therefore agreed to make 26 fortnightly payments, which meant an additional fourteen $5 service charges, i.e. another $70. She also had to pay $12 in other expenses, making her total cost of borrowing to $378. In other words, to borrow $1,000 for one year she had to pay $378 in bank charges, an effective flat interest rate of 37.8%. This is well in excess of the rates deemed usurious by the Bible, Manu and Adam Smith. But notice that the banks only label 10% of this as interest; the extra 27.8% is called bank charges, which is nothing more than a new name for usury. This is the big semantic shift in the word interest that has occurred over the past 30 years. Bentham, for his part, would say, So what, noting that Lydia is a free agent who is under no obligation to receive this money. The law, for its part, is on Benthams side: caveat emptor, let the buyer beware; ignorance of the law is no excuse. Sub-prime interest rates like this excite little or no emotion, but mainly, I would suggest, because few people know about them. Lydia, for example, had no idea that she was paying $378 to borrow $1000. It took me over a day of working through her accounts to work it all out, and I did Bookkeeping 101. Lydias case gives us an insight into the profitability of sub-prime lending. The bank makes 37.8% here, but this is the absolute minimum. The key term in the contract that makes sub-prime lending so lucrative is the arrears provision. Once sub-prime borrowers get into arrears, as they habitually do, this provision kicks in. I have another case where the borrower ended up paying 48% flat per annum because of arrears. It is for this reason that private finance companies have swarmed the micro-credit world of the poorest of the poor, the sub-subprime borrower. Companies compete to recruit sub-subprime borrowers, many of whom get saddled with multiple debts. Of course, high returns come with high risks, as many imprudent lenders are now finding out as defaults become common and interest rates slide towards the negative side of the ledger. The explosive growth of Indias private micro-credit industry is facing imminent collapse of the classic sub-prime lending kind as borrowers default and tales of the sexual harassment and suicide of female debtors accumulates (Lee and David 2010). The morality of the micro-credit lender is now being questioned and with it the language used to describe the loan: micro-credit is becoming known as micro-debt, as the case of Muhammad Yunus quoted above revealed.

Conclusion
The theory of moral economy is the theory of the just price. An interest rate is the price of money and this poses the question of the just interest rate. The question of the just interest rate, in turn, poses the question of the morality of the credit and debt on the one hand and that of the morality of debtor and creditor on the other. The former question, I have argued, is a relatively simple one of transcultural semantics. Peebless finding of an astonishing consistency in the positive moral evaluation of credit across cultures
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is grounded in the commonplace that traders in money everywhere must buy cheap and sell dear if they are to survive. Widespread confusion of the relationship between debt and credit has blinded us to the obviousness of the moral meaning of credit. The question of the morality of borrowers and lenders, I have argued, is an altogether different matter concerning the pragmatics of commercial language usage. This varies over historical time and geographic place, depending on the values of the speaker, the social context of the transaction and the social status of the transactors. Borrowers have the right to request loans and lenders have the right to refuse but different motivations to grant loans. Banks are motivated by profit to grant loans at positive rates of interest, but familial lenders have much more complex motivations, which may result in granting loans at zero or negative rates of interest. Loans of both types have grown dramatically in recent decades and raise new theoretical questions about the morality of demand sharing and sub-prime money-debt that the Maussian legacy, and its straw men, have blinded us to. These questions can only be answered by ethnographic studies informed by an understanding of economic history and the history of ideas about morality and money.
Chris A. Gregory School of Archaeology and Anthropology The Australian National University Canberra, ACT 0200 Australia chris.gregory@anu.edu.au

References
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