Compound Interest on Debt

And while this is not a financial take on the crisis,marking instead an interesting journey through myth,literature,philosophy and science to understand the idea of credit and fair exchange,some introductory statistics are useful. Atwood reminds us that the first credit card was issued in 1950. “In 1955,the average Canadian household debt-to-income ratio was 55 per cent; in 2003,it was 105.2 per cent. The ratio has gone up since then. In the United States,the ratio was 114 per cent in 2004. In other words,a great many people are spending more than they’re earning. So are a great many national governments.”

But is calculation of debt the preserve of financial folks alone? How deep need the preconditions of debt be? Or,as Atwood asks: “(A) friend of mine used to maintain that airplanes stayed up in the air only because people believed — against reason — that they could fly: without that collective delusion sustaining them,they would plummet to earth. Is ‘debt’ similar?”

It better not be. And,of course,it isn’t. Well,not entirely,in Atwood’s telling. She is a Canadian novelist fabled to be a manic collector of facts,an obsessive who throws all interesting bits of news and theory into a big brown box,a grand old woman of letters who writes on ancient myth and contemporary work. In this slim book,she draws on all that to inquire into the biological and philosophical tentacles of debt. But,for those unfamiliar with her fiction,it must be immediately clarified that Atwood is also a novelist of dystopia. So,come to this book expecting at some point dark and extreme predictions of what awaits us.

She argues that for a mental construct like debt to be viable,certain preconditions are necessary,like notions of fairness and equivalent values. But could these notions be biologically wired into us? Research indicates that chimpanzees have a sense of “debts of honour” or “reciprocal altruism”: “Chimp A helps Chimp B to gang up on Chimp C and expects to be helped in turn. If Chimp B then doesn’t come through at the time of Chimp A’s need,Chimp A is enraged and throws a screaming temper tantrum.” Atwood cites other work substantiating the existence of a “cheater-detection module” among the mental organs governing reciprocal altruism. Therefore,there is a mutually dependent relationship between debtor and creditor.

Atwood harks back to myth and literature to ask who is “morally worse” — debtor or creditor? But the feistiest,the most Atwoodian and,therefore,provocative part of the inquiry relates to her view of the future. In her novels,Atwood is a great practitioner of dystopian exaggeration to make the point that truly horrid futures await us if humanity does not mend its ways. In her most defining novel,The Handmaid’s Tale,she warned of what may happen if fundamentalisms that deny women equal status win out. In the more recent Oryx and Crake,she posted a caution on blind application of biotechnology solutions. Perhaps because Payback is not a work of fiction,she is more restrained in prediction-making,but only just.

In the final sections of the book,she invokes a character called Scrooge Nouveau. He is wealthy beyond average expectations,and he owns many corporations. He believes he owes himself every way of making his life more luxurious and every shot at fulfilling his desires because,well,hasn’t he earned it? And so he goes about,till one day a Spirit visits him and takes him off on a virtual tour of the world as it now is — from the melting icecaps in the Antarctic to the fast depleting rainforests in the Amazon,from a Genoese colony on the coast of the Black Sea dealing with the ravages of Black Death in the 14th century to the food riots that rocked many parts of the world last year. SN,expert at reading corporate results,is,in other words,given a bird’s eye view introduction to Nature’s cost-benefit analysis,and the consequences of imbalances in the ledger.
In a bareboned recap,this may sound simplistic. Read in its entirety,the book certainly is not. Many readers will not agree with all of Atwood’s takes on the subject of debt,but each will be provoked into her own theories. What fun.