At the end of Daniel DeFoe's 1722 novel The Fortunes and Misfortunes of the Famous Moll Flanders, the heroine flees her miserable existence in Great Britain to settle in the American colony of Virginia. The full title of Defoe's novel gives a sense of the difficult arc of Moll's all-too common life as a pauper in the 'civlized' world of the 18th century:

"The Fortunes and Misfortunes of the Famous Moll Flanders, Etc. Who Was Born In Newgate, and During a Life of Continu'd Variety For Threescore Years, Besides Her Childhood, Was Twelve Year a Whore, Five Times a Wife [Whereof Once To Her Own Brother], Twelve Year a Thief, Eight Year a Transported Felon In Virginia, At Last Grew Rich, Liv'd Honest, and Died a Penitent. Written from her own Memorandums."

Moll is an invention, but as such not an outrageous one. Though her story seems fantastic to us today, during the 18th century her life would have been uncommon only in that she survived it and made it to the Americas to start anew.

Defoe himself spent time in Newgate prison in 1692 for a debt of 700 pounds, and in 1698 went bankrupt due to some failed business ventures, but by the mid 1700s people in Britain were being imprisoned for debts as small as 20 shillings. Many famous novelists and writers of the 18th and 19th century spent time in debtor's prisons, including (to name a few) Defoe, Charles Dickens' father, and Samuel Johnson.

Being thrown into debtor's prison was much worse and more perilous than being thrown into prison for committing a crime. Debtors had to provide their own food and heat while in prison, and if they didn't have either they were left to die from cold or starvation. The thinking behind this was that if a debtor had any friends or family with any money at all, those supporters would come forward at and pay off the debt to prevent the dangerous incarceration of their loved one.

Sometimes debtors were indeed bailed out this way by friends, family, or benefactors, but just as often no money or help emerged because there was none to be had, and in these cases the debtor often died in 'gaol' (an early term for debtor's prison). The poorest debtors were placed in underground cells with street level grates through which they could extend their hands to beg for food and coins from passersby. The inhumanity and ineffectiveness of this practice gave rise to a movement to abolish debtor's prisons, but it wasn't until 1869 that Parliament actually abolished the law that allowed a debtor to be jailed indefinitely.

During the early 1700s the idea of shipping debtors overseas took hold and gained ground as reform became more of an issue. James Oglethorpe, a member of Parliament, founded the colony of Georgia as a refuge for debtors after as many as ten thousand of them (all of whom owed less than 20 shillings) were released from British prisons. Oglethorpe pushed for the passage of a reform prohibiting the indefinite confinement of persons who owed small sums of money after learning that a very close friend had died in Fleet prison over a minor debt, but he soon realized that the thousands of newly released debtors had nowhere to go and nothing to do.

So off to America it was.

The precedent of sending imprisoned debtors overseas had already been set by the practice of 'indentured servitude', which initially promised safe harbor for any debts incurred in Britain in exchange for seven years free labor in the American colonies. As many as two out of three American colonists came to the U.S to escape such debts, either through indentured servitude (and the erasure of the their debts in Britain), or by being shipped to the New World involuntarily after English reform provoked mass release from debtors prison.

When American school children are taught the reason for the founding of the United States of America, they hear a lot of talk about the quest for religious freedom and tolerance, and about the ideals of "freedom and justice for all" put forth in the Declaration of Independence and the Constitution.

That's nice talk, and those ideas certainly are contained in those documents, but focusing on that alone conveniently leaves out the fact the first British settlers of America were often not tolerant nor were they free.

Many of the fanatical 17th and 18th century English religious sects (except for perhaps the Quakers) who came to America for religious freedom left Britain because their own intolerance in the homeland made them very unpopular there. The first religious settlers in the American colonies were looking for a place where they could establish religious purity and homogeneity, not tolerance.

Nor did the first settlers have any intention of taking the equality and freedom thing all that seriously outside the rhetoric and formal discourse of political philosophy. (Jefferson himself owned slaves, women had no rights to own property, and native peoples were routinely lied to and slaughtered without remorse in order to steal their land.) Voting, even after the country declared its independence, was confined to free, white men who owned land. Women, slaves, indentured servants, and poor people were not welcome at the polls or in the early U.S. government.

In the midst of all the heated rhetoric today about patriotism and debt and government, it's important to note that the American Independence movement was fueled as much by the massive indebtedness of America's early plantation owners as it was by abstract political beliefs about equality and religious tolerance. In fact, debt was almost certainly a greater force behind the movement than any lofty set of political ideals.

By breaking free of England and forming a separate nation, Virginia plantation owners like Thomas Jefferson and George Washington cancelled out the heavy debts they owed to benefactors who helped set them up in the New World.

That's no mere coincidence.

In fact, though we hear it very little here in the U.S. today, the early American colonies were basically set up as debtors asylums; places where English people who owed a little or a lot of money could flee their creditors or, if they were very poor, flee their old creditors and gain new American ones.

As the movement to abolish debtor's prisons in Britain grew throughout the 1700s and into the 19th century, America became a dumping ground for people with no money. If you release debtors from prison, then what?

Then you send them to America.

In a recent article in The New Yorker, Harvard history professor Jill Lepore recounts the up and down saga of bankruptcy as a public institution in the United States.

Bankruptcy tends to become a reform issue during the years following a panic in the economy (such as the one we just experienced), but then quickly becomes derided again once times are more prosperous.

For the first 150 years or so in the U.S., bankruptcy was seen as a way to regulate the economy and as such was considered a necessary safety valve; releasing the top tier of the wealthiest bankers and industrialists from obligations incurred during boom times as a way to get out of bust times. Bankruptcy in the U.S. (in the beginning) was therefore available only to businesses and investors, not to individual persons.

Incredibly, even though two out of three colonists came to the U.S to escape debtor's prisons, such prisons were quickly re-established on American soil, by Americans. One of the earliest was in New York City in the garret of City Hall on Wall Street. Wealthy debtors were imprisoned on the upper floors, where they read books, penned essays, and tried to get their friends to bail them out. Poor debtors were once again consigned to the basement, just as they were in Britain, where they starved and died. Debtor's prisons were not abolished in the U.S. until 1832 (although, to be fair, that was indeed 27 years sooner than in Britain).

In spite of this two-tiered system, the long and troubled relationship of Americans to debt and to debt imprisonment created a 19th century movement not only to outlaw debtor's prisons (that movement had also taken hold in Britain), but also to extend bankruptcy protection to individual persons as well financiers and factory owners. In the past, investment debt had been seen as an economic issue, whereas personal debt was seen as a moral issue.

Rich people faced market issues. Poor people were bad.

This colonial split between the economics of debt (between what the country thought Wall Street and big business must be allowed to do to foster growth) and the morality of debt (a term usually applied to individual persons when they could not pay back what they borrowed) is evident in America even today.

We tend to see the billions in aid flying around high finance right now as a function of specific economic problems. These debts are 'clean' in the sense that they are anonymous and numerical. We may be angry about them and call for accountability, but we have no human target to pillory, and we're used to accepting business failures and problems as a natural part of economic cycles. By contrast, we tend to see the guy down the street who just lost his house as a schmuck who probably deserves it and should have been more frugal.

If you take the time to read a bit of history, just a bit, then it becomes quickly clear that banks, debt, and slavery have always been intertwined. Where you find one, you'll generally find the others close at hand. Slavery solved a practical economic problem in the early days of the United States: the labor shortage; and banks were anxious to get on board. By supplying free labor to run the tobacco and cotton plantations, slavery enabled a mercantile economy to grow, and where there's a mercantile economy there's banks loaning out money to it.

Many major banks were directly involved in the slave trade, providing 'slave insurance' to help finance slaving missions to Africa. When Abraham Lincoln realized he would have to raise a Union Army to prevent the secession of the Southern states (over slavery), the banks were so dead set against it and so powerful that Lincoln had to create the first national currency to get around them: the Greenback dollar.

By declaring the dollar the official U.S. currency (before that time banks were state-run affairs that often issued conflicting currencies of their own design), Lincoln was able to both raise the money he needed for a Union army (he just printed it) and at the same time disenfranchise the South (they had to invent their own currency, Confederate dollars, which were nearly worthless because most of the wealth was in the North).

As recently as 2004 J.P. Morgan Chase was still settling lawsuits related to its part in financing the U.S. slave trade before the Civil War.

Today, debtor's prisons are outlawed in the U.S., slavery is of course formally outlawed, and women, poor people, and minorities all technically have the right to vote and own property (if they can afford any), but debt still serves to keep people laboring at jobs they would never even consider doing if they did not have debts.

Indeed, for the past thirty years debt has been the major export and (almost) the sole commodity of the United States, which is part of the reason we are in the mess we are in right now. President Bush's post-9/11 admonition was not to conserve energy to get off foreign oil or be brave or support the war effort but rather:

"Go shopping."

(Or else the terrorists win.)

When industries default on their debts, we still tend to see that as a function of markets and free trade. As a culture we recognize that sometimes 'stuff happens' and businesses have to start over for the greater good of all; either by reorganization or selling off everything and 'going belly up'. When individual people default on their debts we still tend to judge them personally and harshy: We label them deadbeats, slackers, irresponsible lackeys.

We want it both ways. Go shopping or the terrorists win. But if you can't pay your debts because of the reckless practices of big business, high finance, credit card issuers, Wall Street, banks, government, or simply because you yourself have fallen on hard times (just like businesses do) through personal tragedy, job loss, or poor health, then rot in the street you lazy slackers you--you should have been more frugal.

We still have a double standard when it comes to debt: Justice for some.

And we still have a government of, by, and for the powerful and the monied.

Money is symbolic. It only means what we as a society and a culture agree that it means.

The history of banking in the U.S. has been a series of boom times followed by repetitive panics and banking collapses, until finally the establishment of the Federal Reserve in 1913 opened the door to a unified national monetary policy (which itself gained support only after the Panic of 1907). In fact, the history of banking in general reads like this: boom, bust, boom, bust, boom, bust--partly because banks only make money when they loan money.

Banks are debt factories.

That's what they are, seriously.

During Colonial times, currency and bank notes were so variable and volatile that sometimes debt could be created simply because the value of the asset backing the note changed dramatically between the date of its issuance and the date of its redemption.

Ironically, after Andrew Jackson ran and won on a platform which railed against the banks as purveyors of debt and social woe, the country saw 25 of the most unstable financial years in its entire history, a period called "the Free Banking Era," (1837-1862).

The title "Free Banking" sounds very inspirational and patriotic, but in actual fact it amounted to a time during which thousands of state run banks with no regulation or consistency came and went in rapid succession, each of them lasting only a year or two until bank runs killed them off like clockwork, one by one. This was back in the 'good old days' of the gold standard, and yet money often was literally not worth the paper it was printed on, regardless of what theoretically backed it. (The paper also wasn't standard, so you often couldn't be sure of where or whether a note could be redeemed. Notes were not universal.)

At the end of the poorly-named 'Free Banking Era', as mentioned earlier, Lincoln had to create a uniform federal currency in order to raise enough money to fight the Civil War.

Lincoln's 'Greenbacks' were fiat currency--meaning they were backed only by the reputation of the government issuing them, but since the government issuing them was (at that time) a wealthy one with huge and growing factories and railroads, that actually worked out better than the treacherous state-run banks with specie currency (notes backed by gold, a.k.a. 'the gold standard').

The period between 1933 (the Depression-inspired Glass-Steagall Act regulating banks and separating investment, insurance, and depository institutions) and 1999 (the Gramm-Leach-Bliley Act repealing Glass-Steagall), was the most stable financial period in American history.

Politcal ideologues have favorite scapegoats for our current situation with regard to debt and money, all of them based upon specific facets of the symbolic world of finance, facets these critics often don't understand themselves.

For example:

It's the Fed's fault. "The Fed is an evil centuries-old banking cabal." Or, it's all due to the abolition of the gold standard (which, historically speaking, did not result in less economic volatility--in fact some of the worst volatility in American history occured while the U.S was on the gold standard, but nevermind the facts). Or it's our evil socialist government (or fascist government, or whatever). Or it's the evil banks.

It's some new villain every week.

Weirdly, we now have talk of secession again over all of it, this time from Texas.

Yet it seems to me that the common thread running through all this money misery is not any specific facet of finance, but rather, debt itself, the concept and the embrace of that concept--and it also seems to me that we don't really think very hard about what debt is if we think about it at all. We just accept it. We feel it's necessary and normal and right. And we're all pretty sure that when it all goes horribly wrong it's some other guy's fault and we shouldn't have to pay for it.

I think it's time to re-examine our attitudes in the light of actual historical facts.

If money is symbolic (and it is) then debt is also symbolic.

Debt, it seems to me, is a contract between people who have means and people who do not. When debt is a function of wealthy people supporting each other in the service of creating even more wealth for themselves, then debt is seen as an economic good even though we can clearly show that, historically, debt generates intense misery and inevitable economic catastrophe and social collapse.

When debt is arranged between a person who has enough and a person who does not, debt is basically a slave contract. Debt essentially says in so many words, "I own you until you give me back 'X' amount plus interest. This agreement cements my status as a person of greater worth and power than you, and by accepting these terms you accept your inferior status."

It is the extreme inequity and the fact that basic existence is at stake that makes debt between social unequals slavery. When the creditor owns the means to sustain the life of the indebted person and uses that debt to maintain a contract of service which impoverishes and diminishes the subordinate, it is not just 'money' that is at stake.

If money symbolisms wealth, then debt (or its lack) symbolizes the power that monied persons wield over others and use to bend them to their own will. The symbolism here is like gravy over road kill. It hides something ugly, something you would never swallow unless you were very hungry--or just conditioned to think no other choice existed.

We no longer lock up debtors, but we still lock up the poor. One in every ten people in the U.S. is in prison today--the highest per capita incarceration rate in the world, higher even than China or all of the Arab nations combined.

And who fills our prisons? Petty theives, drug users, low level drug dealers, persons of no means, of no hope, of no use to society except as prisoners whose care and maintenance creates jobs in rural penal colonies. (Many are owned  by a subsidiary of Haliburton.) Almost no one wealthy has been imprisoned for the recent collapse of the U.S. economy. No laws were broken. The wealthiest Americans made the laws.

Perhaps the current collapse will be the last, and when the dust settles, we can create something less ugly out of the ashes.

I doubt it though.

When will we get to the understanding that the diminishment of one human being diminishes all? Will it happen in my lifetime? Will it ever happen?