Debt (58 page)

In other words, he’d been living beyond his means, got himself in trouble, and decided, like a reckless gambler, to double down and go for broke. Unsurprising, then, that when the governor at the last minute decided to cancel the expedition, Cortés ignored him and sailed for the mainland with six hundred men, offering each an equal share in the expedition’s profits. On landing he burned his boats, effectively staking everything on victory.

Let us skip, then, from the beginning of Díaz’s book to its final chapter. Three years later, through some of the most ingenious, ruthless, brilliant, and utterly dishonorable behavior by a military leader ever recorded, Cortés had his victory. After eight months of grueling house-to-house warfare and the death of perhaps a hundred thousand Aztecs, Tenochtitlán, one of the greatest cities of the world, lay entirely destroyed. The imperial treasury was secured, and the time had come, then, for it to be divided in shares amongst the surviving soldiers.

Yet according to Díaz, the result among the men was outrage. The officers connived to sequester most of the gold, and when the final tally was announced, the troops learned that they would be receiving only fifty to eighty pesos each. What’s more, the better part of their shares was immediately seized again by the officers in their capacity of creditors—since Cortés had insisted that the men be billed for any replacement equipment and medical care they had received during the siege. Most found they had actually lost money on the deal. Díaz writes:

Spanish merchants soon arrived charging wildly inflated prices for basic necessities, causing further outrage, until:

These were the men who ended up in control of the provinces, and who established local administration, taxes, and labor regimes. Which makes it a little easier to understand the descriptions of Indians with their faces covered by names like so many counter-endorsed checks, or the mines surrounded by miles of rotting corpses. We are not dealing with a psychology of cold, calculating greed, but of a much more complicated mix of shame and righteous indignation, and of the frantic urgency of debts that would only compound and accumulate (these were, almost certainly, interest-bearing loans), and outrage at the idea that, after all they had gone through, they should be held to owe anything to begin with.

And what of Cortés? He had just pulled off perhaps the greatest act of theft in world history. Certainly, his original debts had now been rendered inconsequential. Yet he somehow always seemed to find himself in new ones. Creditors were already starting to repossess his holdings while he was off on an expedition to Honduras in 1526; on his return, he wrote the Emperor Charles V that his expenses were such that “all I have received has been insufficient to relive me from misery and poverty, being at the moment I write in debt for upwards of five hundred ounces of gold, without possessing a single peso towards it.”
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Disingenuous, no doubt (Cortés at the time owned his own personal palace), but only a few years later, he was reduced to pawning his wife’s jewelry to help finance a series of expeditions to California, hoping to restore his fortunes. When those failed to turn a profit, he ended up so besieged by creditors that he had to return to Spain to petition the emperor in person.
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If all this seems suspiciously reminiscent of the fourth Crusade, with its indebted knights stripping whole foreign cities of their wealth and still somehow winding up only one step ahead of their creditors, there is a reason. The financial capital that backed these expeditions came from more or less the same place (if in this case Genoa, not Venice). What’s more, that relationship, between the daring adventurer on the one hand, the gambler willing to take any sort of risk, and on the other, the careful financier, whose entire operations are organized around
producing steady, mathematical, inexorable growth of income, lies at the very heart of what we now call “capitalism.”

As a result, our current economic system has always been marked by a peculiar dual character. Scholars have long been fascinated by Spanish debates that ensued, in Spanish universities like Santander, about the humanity of the Indians (Did they have souls? Could they have legal rights? Was it legitimate to forcibly enslave them?), just as they have argued about the real attitudes of the conquistadors (was it contempt, revulsion, or even grudging admiration for their adversaries?)
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The real point is that at the key moments of decision, none of this mattered. Those making the decisions did not feel they were in control anyway; those who were did not particularly care to know the details. To take a telling example: after the earliest years of the gold and silver mines described by Motolinia, where millions of Indians were simply rounded up and marched off to their deaths, colonists settled on a policy of debt peonage: the usual trick of demanding heavy taxes, lending money at interest to those who could not pay, and then demanding that the loans be repaid with work. Royal agents regularly attempted to forbid such practices, arguing that the Indians were now Christian and that this violated their rights as loyal subjects of the Spanish crown. But as with almost all such royal efforts to act as protector of the Indians, the result was the same. Financial exigencies ended up taking precedence. Charles V himself was deeply in debt to banking firms in Florence, Genoa, and Naples, and gold and silver from the Americas made up perhaps one-fifth of his total revenue. In the end, despite a lot of initial noise and the (usually quite sincere) moral outrage on the part of the king’s emissaries, such decrees were either ignored or, at best, enforced for a year or two before being allowed to slip into abeyance.
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All of this helps explain why the Church had been so uncompromising in its attitude toward usury. It was not just a philosophical question; it was a matter of moral rivalry. Money always has the potential to become a moral imperative unto itself. Allow it to expand, and it can quickly become a morality so imperative that all others seem frivolous in comparison. For the debtor, the world is reduced to a collection of potential dangers, potential tools, and potential merchandise.
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Even human relations become a matter of cost-benefit calculation. Clearly this is the way the conquistadors viewed the worlds that they set out to conquer.

It is the peculiar feature of modern capitalism to create social arrangements that essentially force us to think this way. The structure of the corporation is a telling case in point—and it is no coincidence that the first major joint-stock corporations in the world were the English and Dutch East India companies, ones that pursued that very same combination of exploration, conquest, and extraction as did the conquistadors. It is a structure designed to eliminate all moral imperatives but profit. The executives who make decisions can argue—and regularly do—that, if it were their own money, of course they would not fire lifelong employees a week before retirement, or dump carcinogenic waste next to schools. Yet they are morally bound to ignore such considerations, because they are mere employees whose only responsibility is to provide the maximum return on investment for the company’s stockholders. (The stockholders, of course, are not given any say.)

The figure of Cortés is instructive for another reason. We are speaking of a man who, in 1521, had conquered a kingdom and was sitting atop a vast pile of gold. Neither did he have any intention of giving it away—even to his followers. Five years later, he was claiming to be a penniless debtor. How was this possible?

The obvious answer would be: Cortés was not a king, he was a subject of the King of Spain, living within the legal structure of a kingdom that insisted that, if he were not good at managing his money, he would lose it. Yet as we’ve seen, the king’s laws could be ignored in other cases. What’s more, even kings were not entirely free agents. Charles V was continually in debt, and when his son Philip II—his armies fighting on three different fronts at once—attempted the old Medieval trick of defaulting, all his creditors, from the Genoese Bank of St. George to the German Fuggers and Welsers, closed ranks to insist that he would receive no further loans until he started honoring his commitments.
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Capital, then, is not simply money. It is not even just wealth that can be turned into money. But neither is it just the use of political power to help one use one’s money to make more money. Cortés was trying to do exactly that: in classical Axial Age fashion, he was attempting to use his conquests to acquire plunder, and slaves to work the mines, with which he could pay his soldiers and suppliers cash to embark on even further conquests. It was a tried-and-true formula. But for all the other conquistadors, it provided a spectacular failure.

This would seem to mark the difference. In the Axial Age, money was a tool of empire. It might have been convenient for rulers to promulgate markets in which everyone would treat money as an end in itself; at times, rulers might have even come to see the whole apparatus
of government as a profit-making enterprise; but money always remained a political instrument. This is why when the empires collapsed and armies were demobilized, the whole apparatus could simply melt away. Under the newly emerging capitalist order, the logic of money was granted autonomy; political and military power were then gradually reorganized around it. True, this was a financial logic that could never have existed without states and armies behind it in the first place. As we have seen in the case of Medieval Islam, under genuine free-market conditions—in which the state is not involved in regulating the market in any significant way, even in enforcing commercial contracts—purely competitive markets will not develop, and loans at interest will become effectively impossible to collect. It was
only
the Islamic prohibition against usury, really, that made it possible for them to create an economic system that stood so far apart from the state.

Martin Luther was making this very point in 1524, right around the time that Cortés was first beginning to have trouble with his creditors. It is all very well, Luther said, for us to imagine that all might live as true Christians, in accordance with the dictates of the Gospel. But in fact there are few who are really capable of acting this way: