Living Wisely/Genesis of Debt

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In the beginning the earth formed, and people arose upon the earth, and it was good.[1]

The people hunted and gathered food to feed their families. They built shelters and tools, and they sang, and danced, and worked and played together in small groups, tribes, and villages, and it was good.

Some groups had plenty, others suffered shortages, so the people were happy to share and help one another. Everyone could remember a time when they had suffered shortages and others generously shared, and it was good.

Some people were naturally better at hunting, some better at gathering, some better at making tools, and still others better at using tools. They were happy to share among each other, and it was good.

Great explorers brought back stories of other people, living in strange and distant lands, with their own ways and their own skills and their own things. The adventuresome and the curious visited. We gave them our gifts, and they gave us their gifts. Culture flourished, and it was good.

As the territory expanded the exchanges became too many to remember, so they began a tally to record each gift. Some used small stones, others gathered distinctive shells, some used beads, and still others recorded the tally as notches carved on animal bones. These records helped the people remember each exchange, and it was good.

Exchanges of food, clothing, tools, trinkets, materials, and help among people became more important as the culture became more enriched, skills specialized, and people became more interdependent, and it was good.

Eventually various signed notes were accepted in exchange for food, clothing, and other goods to record the agreement to repay later with something similarly valuable. The notes recorded the agreement to repay and after a time the notes themselves became recognized within the community as representing value. These promissory notes were valuable because they made exchanges so much easier, and it was good.

In some villages an elder would make several distinctive metal disks decorated with various noble symbols. The elder would exchange these tokens at a standard rate for genuine notes signed by trustworthy villagers. The tokens were more durable, had a standard value, were recognizable, and were easier to exchange. Because they were trusted and accepted as readily as the signed promissory notes, they became widely used, and it was good.

Sometimes a family was unsuccessful in hunting and gathering; they needed food, and had no tokens. Other people were fortunate in having enough food and also had tokens they could share. The people with tokens to spare were generous in lending tokens to those in need. A record was made of this loan, backed by an earnest promise to repay the loan as soon as the misfortune passed. Conditions eventually improved, hunting became successful, food was exchanged for tokens, and the loan was repaid. This happened often enough that certain people became skilled in the exchange of tokens and recording loans. They became known as bankers, named for the benches where they worked counting tokens, and it was good.

Of course the people who worked as bankers also needed food, clothing, and shelter. What they had to offer in exchange were tokens. So it soon became the custom to lend ten tokens today for an agreement to return eleven tokens one year later. The eleventh token paid to feed, clothe, and shelter the bankers. It was called interest and this seemed fair.

One year ten hungry villagers each borrowed ten tokens with the promise to each repay the banker with eleven tokens next year. They used the tokens to buy food for their families. Throughout the year they worked hard, their crops were successful, and they ate well. They even grew enough food to sell some surplus in exchange for tokens. But only 100 tokens were available throughout the entire village while 110 tokens were owed to the bank, and it was not good.


  1. This essay first appeared as a blog post on globalcircle. It has been adapted here with permission of the author. See: