Payback: Debt and the Shadow Side of Wealth

LIBRARY AND ARCHIVES CANADA CATALOGUING IN PUBLICATION
Atwood, Margaret, 1939–
Payback : debt and the shadow side of wealth / Margaret Atwood. — Limited ed.
(CBC Massey lecture series)
Includes index.
eISBN: 978-0887848728
1 . Debt — Social aspects. 2. Debt in literature. I. Title. II. Series.
PS8501.T86Z463 2008A 306.3 C2008-904070-8

Cover design: Bill Douglas
Cover photographs: Getty Images

We acknowledge for their financial support of our publishing program the
Canada Council for the Arts, the Ontario Arts Council, and the Government
of Canada through the Canada Book Fund.

For Graeme and Jess,
and Matthew and Graeme the younger

( One )
Ancient Balances

CANADIAN NATURE WRITER
Ernest Thompson Seton had an odd bill presented to him on his twenty-first birthday. It was a record kept by his father of all the expenses connected with young Ernest’s childhood and youth, including the fee charged by the doctor for delivering him. Even more oddly, Ernest is said to have paid it. I used to think that Mr. Seton Senior was a jerk, but now I’m wondering, What if he was — in principle — right? Are we in debt to anyone or anything for the bare fact of our existence? If so, what do we owe, and to whom or to what? And how should we pay?

THE MOTIVE FOR
this book is curiosity — mine — and my hope is that the writing of it will allow me to explore a subject I know little about, but which for this reason intrigues me. That subject is debt.

Payback
is not about debt management, or sleep debt, or the national debt, or about managing your monthly budget, or about how debt is actually a good thing because you can borrow money and then make it grow, or about shopaholics and how to figure out that you are one: bookstores and the Internet abound in such materials.

Nor is it about more lurid forms of debt: gambling debts and Mafia revenges, karmic justice whereby bad deeds trigger reincarnation as a beetle, or melodramas in which moustache-twirling creditors use nonpayment of the rent to force unwanted sex on beautiful women, though it may touch on these. Instead, it’s about debt as a human construct — thus an imaginative construct — and how this construct mirrors and magnifies both voracious human desire and ferocious human fear.

Writers write about what worries them, says Alistair MacLeod. Also about what puzzles them, I’d add. The subject of
Payback
is one of the most worrisome and puzzling things I know: that peculiar nexus where money, narrative or story, and religious belief intersect, often with explosive force.

THE THINGS THAT
puzzle us as adults begin by puzzling us as children, or this has certainly been the case for me. In the late 1940s society in which I grew up, there were three things you were never supposed to ask questions about. One of them was money, especially how much of it anyone made. The second was religion: to begin a conversation on that subject would lead directly to the Spanish Inquisition, or worse. The third was sex. I lived among the biologists, and sex — at least as practised by insects — was something I could look up in the textbooks that were lying around the house: the ovipositor was no stranger to me. So the burning curiosity children experience vis-à-vis the forbidden was focused, for me, on the two other taboo areas: the financial and the devotional.

At first these appeared to be distinct categories. There were the things of God, which were unseen. Then there were the things of Caesar, which were all too material. They took the form of golden calves, of which we didn’t have many in Toronto at that time, and also the form of money, the love of which was the root of all evil. But on the other hand stood the comic-book character Scrooge McDuck — much read about by me — who was a hot-tempered, tight-fisted, and often devious billionaire named after Charles Dickens’s famous redeemed miser, Ebenezer Scrooge. The plutocratic McDuck had a large money bin full of gold coins, in which he and his three adopted nephews splashed around as if in a swimming pool. Money, for Uncle Scrooge and the young duck triplets, was not the root of all evil but a pleasurable plaything. Which of these views was correct?

We kids of the 1940s did usually have some pocket money, and although we weren’t supposed to talk about it or have an undue love of it, we were expected to learn to manage it at an early age. When I was eight years old, I had my first paying job. I was already acquainted with money in a more limited way — I got five cents a week as an allowance, which bought a lot more tooth decay then than it does now. The pennies not spent on candy I kept in a tin box that had once held Lipton tea. It had a brightly coloured Indian design, complete with elephant, opulent veiled lady, men in turbans, temples and domes, palm trees, and a sky so blue it never was. The pennies had leaves on one side and king’s heads on the other, and were desirable to me according to their rarity and beauty: King George the Sixth, the reigning monarch, was common currency and thus low-ranking on my snobby little scale, and also he had no beard or moustache; but there were still some hairier George the Fifths in circulation, and, if you were lucky, a really fur-faced Edward the Seventh or two.

I understood that these pennies could be traded for goods such as ice cream cones, but I did not think them superior to the other units of currency used by my fellow children: cigarette-package airplane cards, milk-bottle tops, comic books, and glass marbles of many kinds. Within each of these categories, the principle was the same: rarity and beauty increased value. The rate of exchange was set by the children themselves, though a good deal of haggling took place.

All of that changed when I got a job. The job paid twenty-five cents an hour — a fortune! — and consisted of wheeling a baby around in the snow. As long as I brought the baby back, alive and not too frozen, I got the twenty-five cents. It was at this time in my life that each penny came to be worth the same as every other penny, despite whose head was on it, thus teaching me an important lesson: in high finance, aesthetic considerations soon drop by the wayside, worse luck.

Since I was making so much money, I was told I needed a bank account, so I graduated from the Lipton tea tin and acquired a red bank book. Now the difference between the pennies with heads on them and the marbles, milk-bottle tops, comic books, and airplane cards became clear, because you could not put the marbles into the bank. But you were urged to put your money in there, in order to keep it safe. When I’d accumulated a dangerous amount of the stuff — say, a dollar — I would deposit it at the bank, where the sum was recorded in pen and ink by an intimidating bank teller. The last number in the series was called “the balance”— not a term I understood, as I had yet to see a two-armed weighing scales.

Every once in a while an extra sum would appear in my red bank book — one I hadn’t deposited. This, I was told, was called “interest,” and I had “earned” it by having kept my money in the bank. I didn’t understand this either. It was certainly interesting to me that I had some extra money — that must be why it was called “interest”— but I knew I hadn’t actually earned it: no babies from the bank had been wheeled around in the snow by me. Where then had these mysterious sums come from? Surely from the same imaginary place that spawned the nickels left by the Tooth Fairy in exchange for your shucked-off teeth: some realm of pious invention that couldn’t be located anywhere exactly, but that we all had to pretend to believe in or the tooth-for-a-nickel gambit would no longer work.

However, the nickels under the pillow were real enough. So was the bank interest, because you could cash it in and turn it back into pennies, and thence into candy and ice cream cones. But how could a fiction generate real objects? I knew from fairy tales such as
Peter Pan
that if you ceased to believe in fairies they would drop dead: if I stopped believing in banks, would they too expire? The adult view was that fairies were unreal and banks were real. But was that true?

Thus began my financial puzzlements. Nor are they over yet.

DURING THE PAST
half-century I’ve spent much time riding around on public transport. I always read the ads. In the 1950s, there were a lot of girdle and brassiere ads, and ads for deodorants and mouthwashes. Today these have vanished, to be replaced by ads for diseases — heart problems, arthritis, diabetes, and more; ads to help you stop smoking; ads for television series that always feature a goddesslike woman or two, though these are sometimes ads for hair dye and skin cream; and ads for agencies you can call if you have a gambling addiction. And ads for debt services — there are a lot of this kind.

One of them shows a gleefully smiling woman with a young child. The caption says, “Now I’m in charge . . . and the collection calls have stopped.” “Like hell money doesn’t buy happiness — debt is manageable,” says another. “There
is
Life after Debt!” punningly chirps a third. “There
can
be a happily ever after part!” trills a fourth, catering to the same belief in fairy tales that inspired you to shove the bills under the rug and then make believe they’d been paid. “Is someone on your tail?” queries a fifth ad, more ominously, from the back end of a bus. These services promise, not to make your burdensome debts vanish in a puff of smoke, but to help you to consolidate them and pay them down in bits and pieces, while learning to avoid the free-spending behaviour that got you so deeply into the red in the first place.

Why are there so many of these ads? Is it because there are unprecedented numbers of people in debt? Very possibly.

In the 1950s, the age of girdles and deodorants, the adsters evidently felt that the most anxiety-making thing imaginable was to have your body lolloping about unconfined, and stinking up the place into the bargain. It was the body that might get away from you, so it was the body that had to be brought under control; if not, that body might get out and do things that would bring a shame upon you so deep and sexual that it could never be mentioned on public transport. Now things are very different. Sexual antics are a part of the entertainment industry, and thus no longer a matter for censure and guilt, so your body is not the main focus of anxiety unless it gets one of the much-advertised diseases. Instead, the worrisome thing is the debit side of your ledger.

There’s good reason for this. The first credit card was introduced in 1950. In 1955, the average Canadian household debt-to-income ratio was 55 percent; in 2003, it was 105.2 percent. The ratio has gone up since then. In the United States the ratio was 114 percent in 2004. In other words, a great many people are spending more than they’re earning. So are a great many national governments.

On the microeconomic level, a friend tells me of an epidemic of debt among over-eighteens, especially college students: credit card companies target them, and the students rush out and spend the maximum without stopping to calculate the consequences and are then stuck with debts they can’t pay off, at very high interest rates. Since neurologists are now telling us that the adolescent brain is quite different from the adult one, and not really capable of doing the long-term buy-now, pay-later math, this ought to be considered child exploitation.

At the other end of the scale, the financial world has recently been shaken as a result of the collapse of a debt pyramid involving something called “sub-prime mortgages”— a pyramid scheme that most people don’t grasp very well, but that boils down to the fact that some large financial institutions peddled mortgages to people who could not possibly pay the monthly rates and then put this snake-oil debt into cardboard boxes with impressive labels on them and sold them to institutions and hedge funds that thought they were worth something. It’s like the teenage credit card ploy, but at a much greater level of magnitude.

A friend of mine from the United States writes: “I used to have three banks and a mortgage company. Bank One bought the other two and is now trying hard to buy the mortgage company, which is bankrupt, only it was revealed this morning that the last bank standing is also in serious trouble. Now they are trying to renegotiate with the mortgage company. Question One: If your company is going broke, why would you want to buy a company whose insolvency is front-page news? Question Two: If all the lenders go broke, will the borrowers get off the hook? You can’t imagine the chagrin of the credit-loving American. I gather that whole neighbourhoods in the Midwest look like neighbourhoods in my hometown, empty houses with knee-high grass and vines growing over them and no one willing to admit they actually own the place. Down we go, about to reap what we sow.”

Which has a nice Biblical ring to it, but still we scratch our heads. How and why did this happen? The answer I hear quite often —“greed”— may be accurate enough, but it doesn’t go very far toward unveiling the deeper mysteries of the process. What is this “debt” by which we’re so bedevilled? Like air, it’s all around us, but we never think about it unless something goes wrong with the supply. Certainly it’s a thing we’ve come to feel is indispensable to our collective buoyancy. In good times we float around on it as if on a helium-filled balloon; we rise higher and higher, and the balloon gets bigger and bigger, until —
poof!
— some killjoy sticks a pin into it and we sink. But what is the nature of that pin? Another 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 instantly plummet to earth. Is “debt” similar?

In other words, perhaps debt exists because we imagine it. It is the forms this imagining has taken — and their impact on lived reality — that I would like to explore.

OUR PRESENT ATTITUDES
toward debt are deeply embedded in our entire culture — culture being, as primatologist Frans de Waal has said, “an extremely powerful modifier — affecting everything we do and are, penetrating to the core of human existence.” But perhaps there are some even more basic patterns being modified.

Let’s assume that all of the things human beings do — the good, the bad, and the ugly — can be located on a smorgasbord of behaviours with a sign on it reading
Homo sapiens sapiens
. These things aren’t on the smorgasbord labelled
Spiders
, which is why we don’t spend a lot of time eating bluebottle flies, nor are they on the smorgasbord labelled
Dogs
, which is why we don’t go around marking fire hydrants with our glandular scents or shoving our noses into bags of old garbage. Part of our human smorgasbord has actual food on it, for, like all species, we are driven by appetite and hunger. The rest of the dishes on the table contain less concrete fears and desires — things such as “I’d like to fly,” “I’d like to have sexual intercourse with you,” “War is unifying to the tribe,” “I’m afraid of snakes,” and “What happens to me when I die?”

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