New APPS: Art, Politics, Philosophy, Science

Tuition and the Privatization of College Education

Thomas Frank has a nice analysis up on Salon.com on college tuition and debts.  In it, he points out that the crisis is of long duration, and people have been asking for more than a generation when the “college bubble” will burst.  Along the way, he shows that a number of standard explanations (overpaid professors, insatiable student demand for gymnasiums, etc.) don’t make any sense, at least not on their own.  His concluding point, though, seems vitally important.  Here’s a good-sized chunk of text (with significant ellipses); I’ll follow with a couple of additional thoughts:

Institutional Debt and the Crisis of U.S. Higher Ed (again)

Back in March, I wrote a long piece about the effects of institutional debt on the current, destructive trends in U.S. Higher Education.  In the same vein, there's a new article by Michelle Chen up at The Nation discussing a new report by the Debt and Society group called Borrowing Against the Future: The Hidden Costs of Financing U.S. Higher Education. 

The report concerns the ways in which debt manifests itself throughout the system, and how these various forms are tied to one another—thus the titlte of Chen's piece "Colleges Are Buying Stuff They Can’t Afford and Making Students Pay For It." But Chen is right to highlight the institutional debt side of the equation, which has been overlooked despite the fact that it appears to be a structural driver for other forms of debt and institutional disinvestment in education, etc. She also emphasizes the degree to which one of the most pernicious consequenes of rising debt: the degree to which it makes even public institutions essentially subservient bond ratings agencies.

In the long run, however, these amenities often don’t pay off in terms of revenue for the schools, which grow increasingly beholden to bond investors. Those financiers, in turn, often favor not the highest-quality schools but rather “the safest prospects for investment.” Because of market pressures, the researchers warn, “bond markets can reward behaviors that generate greater revenue but are at odds with the goals of public higher education.” In other words, do you want your university’s future budget projections dictated by a Moody’s rating?

Or, as I've been arguing for awhile, rising institutional debt is what is making 'revenue at any cost' into a management imperative that trumps all others and essentially stripping institutional leaders of the freedom to make management decisions on the basis considerations like their institutions' primary missions, the best interests of their faculty, staff and students, etc.  I urge folks to read the whole piece.

Revenue at Any Cost: Institutional Debt and the Crisis of U.S. Higher Education

As Protevi likes to keep reminding everyone on Facebook, it's been awhile now since I first started arguing that we haven't been paying sufficient attention to the role of institutional debt as a driver of the increasingly alarming developments in U.S. universities, especially those in the public sector.  I've gestured in this direction before on NewAPPS, but the appearance of a new piece on the subject by Josh Freedman on Forbes.com provides a perfect opportunity to develop the point a bit more.  

Let me begin, then, by making a fairly bold claim. Taking the problem of institutional debt seriously makes it possible to provide a consistent account of many of the major problematic trends in U. S. higher education: rapidly accelerating tuition costs; significant declines in financial aid coverage; cuts to or elimination of low-enrollment departments and programs, experiments with mass-market distance learning and online education, and a general move toward 'Responsibility Centered Managment' (RCM) administrative models; dramatically increasing pressure on faculty at the level of compensation, workload, job security and working conditions; the outsourcing of many university functions to private contractors; building booms, especially those aimed at increasing campus amenities or leveraging university owned real estate for commercial purposes; and finally, continuing increases in administrative spending, especially in development offices and other areas concerned with financial management and business operations.

All of this, which may otherwise seem contradictory and difficult to make sense of, can consistently be referred back to the urgent pressure that rising institutional debt imposes upon university operations: the need to maintain a sufficiently robust revenue stream to satisfy credit rating agencies and thus keep borrowing costs, and the costs of servicing existing debt, from exploding. Freedman provides, especially in the later parts of his article, an excellent discussion of how this works. 

Excellence, Schmexcellence Part IV*: an attempt to be clearer about the main problems with assessment.

In comment #9 at this post, Susan makes a kind of canonical case I've heard from lots of assessment people.

First, I should say that I agree with 95% of the intended answers to Susan's rhetorical questions. We should be much clearer about what we want our students to get out of their degrees, and we should put in the hard work of assessing the extent that we are successful.

But "assessment" in contemporary American bureaucracies almost always accomplishes exactly the opposite of the laudable goals that Susan and I share. And there are deep systematic reasons for this. Below, I will first explain three fallacies and then explain why everyone involved in assessment faces enormous pressure to go along with these fallacies. Along the way I hope to make it clear how this results in "assessment" making things demonstrably worse.**

The Effects of Ratings Systems

There's a worrying piece over at Inside Higher Ed quoting the president of "a mildly selective private nonprofit institution that is tuition-dependent" saying that the institution has begun to reject some applicants that it would previously have admitted because of worries about meeting outcomes targets in the ratings system proposed by President Obama in his Higher Education Plan last year. Not surprisingly, the effect of this shift has disproportionately affected applicants from disadvantaged backgrounds — and while this is only one case,* it seems to neatly exemplify what many have feared will be the effect of the proposals. 

I've written before — and I plan to write more — about the effects of prestige races on the state of higher education in the U.S. Until now, these races have been fostered primarily by the proliferation of ranking systems (US News and World Report, etc.) as structuring elements of the enviornment in which institutions are operating.  It is not difficult to link competition for prestige to the sorts of spending and other institutional policy decisions that have led to rising costs of attendence and increased institutional debt loads** — all of which has also created pressure on institutions that traditionally serve less advantaged populations to abandon or de-emphasize those missions. The Obama proposals, as the article shows, seem to have already added to that pressure without even having been put into effect. 

*There are definitely reasons to think carefully about what type of institution is being disucssed here, which may not be typical of those doing the most to serve students from disadvantaged populations.

**See, for instance, this New York Times piece from 2012

Raising college tuition in the interests of fairness and access

There was a story in today's NYT about a number of colleges that are lowering tuition, sometimes drastically. The argument is that they can do this without loss of revenue, since so few pay full tuition anyway. Thus, they are lowering tuition and cutting financial aid and making a splash vis a vis the current concern over high tuition. 

The article makes a number of useful points: that colleges have done a terrible job at advertising how few people actually pay the official tuition amounts that sound so scary, or that there is a significant phenomenon of high tuition causing a perception of quality.  But one obvious point goes utterly unmentioned in the NYT coverage: that cutting both tuition and aid hurts the most economically vulnerable and benefits the less vulnerable.  (The NYT mentions that the college it most focuses on will retain mert-based scholarships, but fails to discuss the effects of cutting need-based.)

All of which leads me to float a suggestion for discussion - one that I once raised with our university president at a party, predictably being responded to with a chuckle and a raised eyebrow: let's raise tuition.  A lot.  

Prestige Races, Debt-financed Construction, and the Kitchen Sink

This story about La Salle University's (Philadelphia) plans for a new business school really has it all: a manufactured sense of urgency, the decision to spend endowment funds and take on debt to finance construction of a luxury facility, the sense that the race for prestige trumps all other considerations. 

Because of the steep competition, the university has chosen to pay for the building from endowment funds, a 2012 bond issue, and $15 million in alumni donations - 57 percent of which have been secured.

"We made the decision to do it that way rather than conduct a seven-year capital campaign," said Brother Michael J. McGinniss, La Salle president. "We wanted to get the business school up. It was more of a competitive and tactical decision."

It's almost like the Rosetta Stone...

Universities as hedge funds, volume 4623

From the Student Union of Michigan blog:

In the end, the university’s rationale for the campaign relies heavily on a narrative of state defunding. For example, as a Detroit News article relates, “President Mary Sue Coleman called the campaign ‘audacious’ and said no gift is too small since universities need philanthropy with states no longer able to support them to the degree they must for schools to be globally competitive.” This narrative seems difficult to square with the actual role of the endowment in funding university operations. The endowment contributes only 4.5% (of its total holdings) to the general operation funds of university each year. The principal stays invested. Thus, if we look at the breakdown of revenue sources at the university in 2010 the endowment contributed only $253 million. Student tuition however generated over $1 billion, while state funding totaled $315 million.

The endowment clearly has very little to do with making up for lost state funding. Its purpose lies elsewhere. And that elsewhere is in the university’s move to behave more and more like a hedge fund, mobilizing donated capital to secure new revenue streams. It does this by taking advantage of its tax-exempt status to build up a hoard of money that it then invests around the world in shady funds and places it would rather the university community did not know about. In so doing, the university is slowly becoming an important player on Wall Street but to play with the “big boys” it needs more and more capital, which requires constant fundraising campaigns. This money is destined for investment not students. Little of it will ever reach students in the form of scholarships or be used to offset increases in tuition.

The SUM seems to be the sort of thing many universities should have: 

Inspired by the Quebec student movement of 2012, the Student Union of Michigan (SUM) is an organizing platform based at the University of Michigan dedicated to fighting the privatization of higher education and instead building a truly democratic, open university run by students and workers. We stand in solidarity with student and worker struggles around the world.

Sometimes a good snarky tone will enliven a post the content of which is already well known

For instance. 

(1) Denigrate public education, and public institutions in general, as drains on private wealth and “job makers” to the point that no one would dare ask for increased support. This will assure that public universities are relegated to second-rate status with inferior facilities and loads of part-time faculty members, and will forever have a negative stigma placed on them relative to private universities.

(2) Take advantage of economic downturns to instigate “taxpayer outrage” in order to remove support from public universities so that they must either raise tuition or cut back on their programs. Afterward, condemn those institutions for raising tuition in order to support lazy, socialist professors teaching irrelevant subjects like anthropology and philosophy.

(3) As state support recedes, encourage a student-loan system that will create a “market for higher education.” Saddling students with lots of debt will make them enterprising and rational consumers of educational products and will encourage them to safeguard their economic interests. Refer to these changes as “empowering students.”

It goes on. Some of the comments aren't bad either. Emphasis on "some," however. 

The debt - joy connection

Some public HE students go into debt in part in order to participate in collective joy and thereby compensate for the negative affects of indebted life. 

Let me explain, and in so doing tie some things together in and around some favorite themes: student debt as feature of neoliberal HE, political affect, and the grotesque nature of the NCAA. 

A compendium of nostrums, scams, buzz words, and trial balloons, with an awesome mixed metaphor

Obama's new HE policy includes this gem:

A rising tide of innovation has the potential to shake up the higher education landscape.

Top that, Elmore Leonard!

Though I guess I shouldn't rock the boat, since this proposal is a game-changer on steroids.

"Student loans aren't hope. They're despair."

That's the closing line to this very important article from Matt Taibbi. Everyone in HE in the States (and in countries heading toward a US-like system) should read the piece. The take-away is something like this: "it's not the interest which crushes student loan debtors, it's the principal."

This is why the issue of student-loan interest rates pales in comparison with the larger problem of how anyone can repay such a huge debt – the average student now leaves school owing $27,000 – by entering an economy sluggishly jogging uphill at a fraction of the speed of climbing education costs. 

Other important excerpts below the fold. 

Are there any philosophical problems that our age instantiates?

I've been reading Walter Cerf's wonderful preface to the Harris and Cerf edition of Hegel'sDifferenzschrift. The nicest thing about it is the long speech that Cerf imagines Schelling and Hegel making upon a visit to Kant, explaining to the snoozing man how critical philosophy leads to speculative philosophy. It's just a wonderful pulling together of so many important dialectical strands in German Idealism.

Another thing kind of weirded me out though. Cerf really interestingly notes how the conceptual divisions that Hegel attempted to overcome were not some kind of abstract game but in some sense constitutive anxieties of the age. The root distinction between particular and universal has all sorts of historical resonances such as issues concerning the relation between an autonomous, yet alienated, individual and the community that both nurtures and stifles him (and it is a "him" with Hegel). In order to be able to be intellectuals, the young Hegel and friends lived in a kind of painful monastic self-denial that exacerbated these tensions (cf. Kierkegaard), and they (unlike Soren) really did for a time at least hope that the French Revolution would somehow be the historical overcoming of them.

Of course existentialism turned necessity into a virtue, taking the very tensions that Hegel and friends analyzed to not be things that could be sublimated, but instead things just constitutive of the human condition. Some strains of Speculative Realism go this one better, and see these tensions as inscribed in the non-human universe itself. Tristan Garcia is to some extent a metaphysical (that is British, not American) Hegelian with no Aufhebung.

Reading Garcia and Cerf together made me wonder if our current time has any constitutive tensions analogous to all of the particular/universal dichotomies that haunted Hegel. With Garcia, I think many of Hegel's are still with us. But to some extent we are used to many of them now. Again, the tension between liberal autonomism and communitarianism, and crap aspects of both, are just facts of life we all unsuccessfully navigate now in ways big and little. What interests me tonight is whether there is anything like this that future Walter Cerfs might describe as distinctive of our point in history? I realize that this is probably a silly game, but I'm interested if anyone has any suggestions.

Can academics organize around attacks on academia?

Various sorts of attacks on academia have been a theme at Newapps since the beginning: Increasing corporatization of the university, growth of administration, take-over of administration by non-academics, funding cuts, increasing student debt, uses of MOOCS that are contrary to goals of education, increasing use and abuse of adjuncts, hyper-emphasis on "evaluation", anti-intellectualism, federal attacks on academic freedom and research independence, legal attacks on faculty and graduate student organizing, and here's a new one - "outsourcing" grading to Bangalore (coming in a pilot project from a director of business law and ethics studies, as probably was just inevitable.) 

Anyway, I've been saying for some time that I'd start a thread in which we might think collectively about what can be done. Should we work within existing organizations like AAUP and APA, or give them up as hopeless?  Should we take an activist/organizing approach or focus on legislation and lobbying?  Should unionization be a focus - whether legally or not?  Creative new ideas would be most welcome.

Pity the star academic

I bet the academic anthropology job-market is no better than the one in academic philosophy. So, what can one conclude about the politics of that field in light of the fact that after a stint at Yale, a scholar applies to "the City University of New York Graduate Center, the New School, Cornell University, and the University of Chicago (all of these twice)...Hunter College, Emory, Duke, Columbia, Stanford, and Johns Hopkins—as well as the University of Toronto," and then fails to land a job?

One can conclude that it is not easy to land a job in academic anthropology, especially if you apply (ahum) rather narrowly (not to say, snobbishly)...but such a sober assessment would undermine, of course, the mythic narrative of "exile" attached to being..."From 2008 through this spring, Mr. Graeber was a lecturer and then a reader at Goldsmiths College and, just last month, he accepted a professorship at the London School of Economics and Political Science."

Ah, yes, London...that academic wasteland...must be very tough being David Graeber.

On the need to get one's sh*t together

Professor Galloway could probably moonlight writing dialogue for David Mamet. Student e-mail and his response HERE. Even though every thing he says is true I could never in a million years respond the way he did:

1. My baseline of cowardice with respect to interpersonal conflict is too high, 
2. Students are already accommodating my inability to get my own sh*t together as far as various neuroses (mostly gum chewing and leg bouncing), so who am I to lecture them?
3. Sometimes what we take to be evidence of the student not having their sh*t together is really just the detritus of them fighting the good fight too many fronts.

As far as the third one goes, an increasing problem I've seen since the great recession began is students missing class because of their work schedules and then showing up often not during your office hours asking you to teach them half a semester's worth of material. Nobody I know has a good policy to deal with this, and when you are teaching something like logic, this can entail giving the same lecture over and over and over again in the course of semester. I can imagine writing a letter like Galloway's in response to this kind of thing, but I just think it would be wrong. Many of these students are the first to go to college in their family and they happen to be going at a time when the social contract has been rewritten expressly to screw them over. I mean, I can't say that they should be taking out unsubsidized loans instead of working. On the other hand, if enough students do it, it can crowd out everything else you might get done that day.

I'd be really interested in what people think of Galloway's letter and any policies people put in place to deal with students who don't have their sh*t together in various ways.

14N: European Day of Action and Solidarity -- against austerity

UPDATE: 14 November, 2:40 PM CST: Amazing 14N photos at Riot TV's Facebook page.

Guardian Business Blog live coverage / A Tumblr / The #14N Twitter feed. 

European Trade Union Confederation (ETUC), who called for the action: 

• ETUC Strategy and Action Plan.
• List of ETUC proposals:

Pepper Spraying Fallout and the Right to Protest

The pepper-spraying of seated, nonviolent protesters at my university, the University of California, Davis, made international headlines in November 2011, complete with pictures and videos.  Now that some of the major consequences have shaken out, I thought people might be interested in hearing how things currently stand.

First, though, I think it's important to remember what the protests were about.  In part, they were (ironically) about the right to protest.  Just a few days earlier, a protest at our sister school, UC Berkeley, degenerated when campus police jabbed nonviolent protesters with nightsticks.  So, the UC Davis protest was meant to be a show of solidarity with the Berkeley protest.  The UC Davis protests were also meant to highlight the problems with repeated tuition hikes at the university.  Not only have these tuition hikes made getting an education difficult for many students, but also, they represent the steady erosion of a public university into a private one and an abandonment of California's promise to educate all qualified applicants (the so-called "Master Plan").  Finally, the UC Davis protests were held during the height of the nationwide Occupy protests, and thus to some extent echoed many of those more general concerns, not to mention the tactic of occupying a common area overnight with tents.

The proposed Québec HE fees hike analyzed in a way which can and should be generalized

This Montreal Gazette column, among whose authors are friends of the blog Hasana Sharp and William Clare Roberts (see here and here), is an excellent example of concise and insightful analysis of HE privatization issues; as the post title claims, it need not be limited to the Québec case. Among the highlights: 

The second assumption is that increasing tuition reduces a subsidy to students from high-income families. But if tax rates are progressive, where's the subsidy? The bulk of university costs are paid on April 30 [the Canadian income tax day -- though part of the issue is the effect of different provincial tax rates / HE fees], not when the tuition bill comes due, so any concern with the unfair distribution of burdens ought to express itself in shoring up the progressiveness of the income tax, not in hitting students with increased fees....

Most everyone agrees, at some level, that justice involves those who enjoy the benefits of education bearing also the burdens of education. Where we differ is in our identifications of the primary beneficiaries of university education. Those in favour of the hikes, like Principal Munroe-Blum, believe that students are the primary beneficiaries of university education....

First, the more we stress the future economic benefits that will accrue to those with higher degrees, the more university looks like job training that employers are lucky enough to get employees to pay to undertake....

Panagiotis Sotiris on Greece: From Despair to Resistance

We previously published a guest post by Panagiotis Sotiris on Linda Katehi and the neoliberal reform of Greek Higher Education. Here we just link to his analysis of the current Greek situation: "From Despair to Resistance." Excerpts: 

Greece is becoming the test site for an extreme case of neoliberal social engineering. The terms of the new bail-out package from the European Union, the European Central Bank and the International Monetary Fund, the so-called Troika, equal a carpet bombing of whatever is left of collective social rights and represent an extreme attempt to bring wage levels and workplace situation back to the 1960s....

According to the dominant narrative the problem with Greece is a chronic lack of export competitiveness which demands a new approach based on cheap labor and doing away with any environmental restrictions, urban planning regulations and archeological protections that could discourage potential investors. It aims at turning Greece into a big Special Economic Zone for investors. What is not mentioned in this narrative is that not only the social cost is going to be tremendous but also that low labour cost competitiveness necessarily would lead to a hopeless 'race to the bottom', since there are always going to be countries, even in the close vicinity such as Bulgaria, with lower wages. Moreover, it is a well known fact that competitiveness does not rely only on labour cost but also on productivity and this has to do with infrastructure, knowledge, collective experience and ability, exactly what is being dramatically eroded by the current economic and social situation in Greece.

NYU course on OWS

A brief interview with NYU professor Lisa Duggan is here. She will teach a course on “Cultures and Economies: Why Occupy Wall Street? The History and Politics of Debt and Finance” in the NYU Department of Social and Cultural Analysis this spring.

New APPS readers are invited to discuss in comments how they might include any of the social movements of 2011, from the "Arab Spring," through the indignados to the Occupy movement, as a topic in their courses. As well as the instigating processes for those movements: the Global Financial Crisis; the Shock Doctrine austerity policies adopted on the basis of not letting a good crisis go to waste; the debt crises of students, workers, and indeed nations; and so on.

Bob Meister on "Debt and taxes"

The essay by the superb Robert Meister is available here; although focused on the University of California, its analyses of privatization as a revenue enhancement strategy whose window is now closing are applicable elsewhere. An excerpt conveys the incisive nature of the piece.  

Most of UC’s top administrators probably know that privatization is failing. Its internal documents no longer assume that students will pile on educational debt to avoid a lifetime of stagnant earnings as income growth becomes limited to an ever-smaller percentage of college graduates. In retrospect, privatization now seems like an attempt to leverage taxpayer funding so as to benefit from a late twentieth-century pattern of income growth and distribution that has turned out to be transitional rather than permanent. But public universities cannot simply go back to taxpayer funding as though decades of excessive debt, including student debt, had not already been incurred by taxpayers who bought more education, healthcare, and housing than their current incomes could sustain. As debt service eats up a growing portion of expected future income, many middle-income families who resist higher borrowing are likely to resist higher taxes, especially if they also have to set aside more money for defined contribution pensions. Is setting aside hundreds of dollars each month to pay off the compound interest on student loans that average $24,000 on graduation over fifteen years (or more) a better use of that income than earning tax-free compound interest on savings for retirement? It’s not if the incomes of many graduates are likely to be stagnant.

(Another of Meister's must-read pieces is "They Pledged Your Tuition," where he shows how the UC Regents pledged rising tuition as security for real estate deals for which the term "conflict of interest" is much too weak.) H/T Christopher Newfield's blog, Remaking the University.

[UPDATE: Newfield is co-author of this piece "Humanists and the Public University." Its abstract: "The precarity of the humanities today is symptomatic of the broader reassessment of the value and utility of the public university. This helps explain the prevalent role of humanists in the recent struggles for public education, but it now also demands from humanists a new level of institutional engagement and reflexivity about the conditions of their labor."]

David Graeber's "Debt": Quote of the day

Well, it doesn't look like there will be Debt quote of the day every day, but when there is one, it is the quote of that day! Here's today's quote, from page 79: 

The best response to anyone who wants to take seriously Nietzsche's fantasies [in GM] about savage hunters chopping pieces off each other's bodies for failure to remit [debts] are the words of an actual hunter-gatherer.... [Danish writer Peter] Freuchen tells how one day, after coming home hungry from an unsuccessful walrus-hunting expedition, he found one of the successful hunters dropping off several hundred pounds of meat. He thanked him profusely. The man objected indignantly: 

"Up in our country we are human!" said the hunter. "And since we are human we help each other. We don't like to hear anybody say thanks for that. What I get today you may get tomorrow. Up here we say that by gifts one makes slaves and by whips one makes dogs."

David Graeber's "Debt": Quote of the day

I have just finished reading David Graeber's immensely interesting and much commented upon book, Debt: The First 5,000 Years. I thought I'd pull out some passages and post them now and again. Here's the first one, from page 382, on what else did you expect?, political affect:

the last thirty years have seen the construction of a vast bureaucratic apparatus for the creation and maintenance of hopelessness, a giant machine designed, first and foremost, to destroy any sense of possible alternative futures. At its root is a veritable obsession on the part of the rulers of the world--in response to the upheavals of the 1960s and 1970s--with ensuring that social movements cannot be seen to grow, flourish, or propose alternatives; that those who challenge existing power arrangements can never, under any circumstances, be perceived to win[35]. To do so requires creating a vast apparatus of armies, prisons, police, various forms of private security firms and ... propaganda engines of every conceivable variety, most of which do not attack alternatives directly so much as create a pervasive climate of fear, jingoistic conformity, and simple despair that rends any thought of changing the world seem an idle fantasy. 

[35] Graber's note on p 453 reads: "I have observed this first hand on any number of occasions in my work as an activist: police are happy to effectively shut down trade summits, for example, just to ensure that there's no possible chance that protestors can feel they have succeeded in doing so themselves."

16 tons

We're adding a new category: "Debts: student, national and otherwise." We've discussed many aspects of debt here at New APPS, theoretical and practical; it's time for it to have its own category as we struggle against a "generation of debt."[UPDATE: as if on cue, here's Rortybomb on "Reinventing debtor's prisons for the 21st Century." H/T Aaron Bady, who writes here of the one-day Dec 12 Oakland port shutdown.]

Jason Read: I Owe You an Explanation: Graeber and Marx on Origin Stories

Jason Read offers us this post as a teaser for a series at his excellent blog, Unemployed Negativity.

---

This is the first of a few posts on debt and literature on debt.

The story of so-called primitive accumulation is well known to readers of Marx. This story was political economy’s way of understanding the origins of capitalism, explaining how the world was divided into workers and capitalists. The story is a kind of grasshopper-and-ant tale, of those who save and those who squander, although Marx gives it a different literary spin. As Marx writes:

This primitive accumulation plays approximately the same role in political economy as original sin does in theology. Adam bit the apple, and thereupon sin fell on the human race. Its origin is supposed to be explained when it is told as an anecdote about the past. Long, long ago there were two sorts of people; one the diligent, intelligent, and above all frugal elite; the other lazy rascals, spending their substance, and more, in riotous living. The legend of theological original sin tells us certainly how man came to be condemned to eat his bread by the sweat of his brow; but the history of economic original sin reveals to us that there are people to whom this is by no means essential. Never mind! Thus it came to pass that the former sort accumulated wealth, and the latter sort finally had nothing to sell except their own skins.

Marx argues that this story is inadequate to account for the origin of capital. It is not enough to simply save money, because the accumulation of money does nothing to produce those with nothing to sell but their labor power. In order to get workers, a huge population must be separated from the means of production, cast off the land and out of the commons. The origin of capitalism is not a moral story of thrift, but a bloody story of expropriation; a story which eventually encompasses the whole history of slavery, colonialism, and even the reformation.

Marx ended Volume One of Capital with this critique, David Graeber opens his book, Debt: The First 5,000 Years with a critique of another contemporary fable. This fable concerns the origin of money.