Peter Frase’s great post on some of the issues raised in the Graeber-Henwood exchange on debt reminded me of a point that kept cropping up in their discussion. The moral and political dimensions of the debtor-creditor relationship, Graeber observed, do not possess the same characteristics in all times and places. They are mediated by the system of class relations and the social location of each of the parties to the debt contract. A debt contracted between two members of the ruling class tends to be qualitatively different than a debt contracted between a graduate student and a student loan provider, or between a guy who likes to bet on the ponies and his bookie.

For one thing, the grad student and the gambler are expected to actually pay the debt back — in full and with interest — or experience the full force of the law. In the event of non-payment, the student will be dragged into court and have his or her wages garnished for years, and the gambler is lucky if he can still walk after the whole thing is over. Contrast that with the Bush-Obama bank bailouts of 2008–2009, when vast sums of money were conjured out of thin air and thrown at the big banks with rather little in the way of government oversight or control. At the height of the financial panic Treasury Secretary (and former Goldman Sachs executive) Henry Paulson delivered a three-page ransom note to Congress, demanding $700 billion in public money to be disbursed to the banks in whatever fashion he sought fit. Before a public outcry forced a revision of some of the most egregious aspects of the original bailout plan, his decisions were to be non-reviewable by any court of law or regulatory agency. None of the banks were nationalized, many of the Dodd-Frank regulations will be eviscerated by financial industry lobbyists, and none of the major players on Wall Street have been prosecuted for nearly destroying the global economy three years ago (though that could change soon). The “too big to fail” banks are even bigger and more systemically important than they were before the crisis. Tellingly, of all of the participants in the bailouts of 2008–2009 only the United Autoworkers were forced to accept major concessions, with workers giving up cost-of-living increases, bonuses, paid holidays, tuition assistance, dental coverage, and some prescription drug coverage.

After all, what’s a few hundred billion dollars among friends?