Payback: Debt and the Shadow Side of Wealth

Great writers sometimes sound like prophets of the old. They predict the coming of things with uncanny precision. More than a century ago, Karl Marx predicted that the capitalists may start lending so much to the consumers that debt instruments will pile up and then collapse and that their falling debris may choke the economic system as cholesterol can choke the arteries. Does his observation totally depend upon the sophistry of reasoning or are there other factors at play?

These thoughts are inescapable if you come across Margaret Atwood’s lectures, a series titled and published as a book, “Payback: Debt and the Shadow Side of Wealth�. The lectures were delivered by the Canadian Broadcast Corporation Massey Lecture Series in 2008. However, the idea was perceived and well developed way before the present financial meltdown. The series is not about how to manage debt or your accounts, “rather, it is an investigation into the idea of debt as an ancient and central motif in religion, literature, and the structure of human societies�. To appreciate the range of her thoughts on this topic, it is interesting to note that a good part of the book “focuses on humanity's indebtedness to nature, as told through a parody of A Christmas Carol and the stark, post-apocalyptic reality that awaits Scrooge if he does not change his ways and listen to the Ghost of Earth Day Past.� In the words of the New York Times, “Atwood has combined rigorous analysis, wide-ranging erudition, and a beguilingly playful imagination to produce the most probing and thought-stirring commentary on the financial crisis to date.�

When clouds were gathering on the economic horizon hardly any economist or politician gave any warning of a coming debacle. Yet, a mere poet and novelist sees and shows it all. If we want to see an example where a literary genius surpasses all experts of the field, all economists, bankers and politicians combined, this is the one. It is Margaret Atwood’s ability to see and herald the unfolding future with the clarity of a hawk that places her above all others. While the experts were blinded by the data as they hid their heads in them like ostriches, she looked at them from the heights of mount Olympus and that is where she takes her readers with her. “In her wide-ranging, entertaining, and imaginative approach to the subject, Atwood proposes that debt is like air - something we take for granted until things go wrong. And then, while gasping for breath, we become very interested in it.�

What she said in an interview in November 2008 is interesting, “We put it together about 3 years ago when none of this meltdown was happening yet, and what interested me in the subject was several things. Debt is a motif in 19th century literature, with which I'm quite familiar. The second thing was all the debt ads that were suddenly on the subway. They suddenly were appearing everywhere. They hadn't been there before, so it inspires one to wonder why there are suddenly so many organizations that are making their living by helping people get out of debt. That leads one to realize that there must be a lot of debt around. Then, when you start looking, there it is. What is this system that we have, and what are its founding principles?�

She does not treat the subject in the style of an expert or professional. She writes like a person is talking with another person in the relaxed atmosphere of a back yard or coffee house, and still makes it instructive. Though the subject is highly scholastic, she deals with the subject not as a subject of academic inquiry, but treats it like a subject of a short story or a novel. The characters in this story are lenders and debtors of various age groups and various backgrounds. All human life—even animal life to some extent (there is reference to chimpanzees’ social behavior where they are shown to understand the value of commerce)—can be seen as a series of transactions where debt is continuously created and paid off or not paid off. It is an extremely useful metaphor to understand the dynamics of social as well as personal life. The New York Times commented, “She discusses the nature of sin, the structure of plot in fiction, the practice of revenge, and the ecological payback that occurs when human beings take from the planet more than they return.�

Atwood brings up an interesting point by pointing out how in religion often the relationship between humankind and the divine is represented in terms of borrowing and lending: “Christ is called the Redeemer, a term drawn directly from the language of debt and pawning or pledging.... In fact, the whole theology of Christianity rests on the notion of spiritual debts and what must be done to repay them, and how you might get out of paying by having someone else pay instead.� Obviously, had she read Quran, she could cite a few examples from it as well, e.g.,� … those who … give charity, secretly or openly, from that We have provided them, bargain for a commerce that will never fail� (35.29). Atwood shows the archetypical nature of debt and notes that there is a two-way relationship between religion and economics – both shape each other. “Religious beliefs about sin and redemption draw on patterns of thinking that partly derive from the practices of borrowing and lending.�

In dealing with the present phenomenon, she explains how debt that was considered dangerous in the past was touted as an instrument of wealth creation. Creditors by providing cheap credit were able to inflate their profits, and people of the lower or middle echelons of society, to their own peril, used credit under the illusion of building assets. She says, “Now that this structure of debt is unwinding, older ideas may be on their way back: We seem to be entering a period in which debt has passed through its most recent harmless and fashionable period, and is reverting to being sinful."

Some commentators have, at length, discussed the angle of portraying the wisdom of traditional fiscal responsibility. However, that does not seem to be the real contribution of her work. It is the help that she provides towards understanding the fiscal psyche at an existential level. Atwood, at length, deals with leitmotif of debt in Western fiction. Citing examples such as Doctor Faustus, she enables the reader to see how the capital system has led people to incur more and more debt.

People kept living on borrowed terms. They kept piling up debt, thinking that they are building their assets. Yet, when the edifice of credit tumbled, they found their life in shambles. The end part, where Atwood parodies A Christmas Carol, narrates what is happening in Scrooge’s mind, “I don't really own anything, Scrooge thinks. Not even my body. Everything I have is only borrowed. I'm not really rich at all, I'm heavily in debt. How do I even begin to pay back what I owe? Where should I start?�

Many of us may have to start all over again.

Mutaal Mooquin
May 20, 2009
Ontario, Canada.