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Abstract

The trust is, by definition, a hybrid between rights in rem and rights in personam. It is also an English legal concept that distinguishes the English common law from the Roman law tradition of continental Europe. The trust is largely absent in the classical writings of Karl Marx and Max Weber on the origins and nature of capitalism. This essay demonstrates that the trust is central to an adequate understanding of capitalism — including the capitalist institutions of modern banking, corporations, and representative democracy — and demonstrates that modern banking and politics are mirror images of each other. Before capitalism, credit economies created institutions to protect debtors or often revived the social order by cancelling debts. The capitalist credit economy, by contrast, considers strict debt obligations a supreme moral good and a way of securing social order. It creates a political scheme to ensure that debt obligations are strictly fulfilled. This essay argues that this scheme is a trust. The trust turns the debts of individuals, whose death can cancel their debt obligations, into the debts of imaginary groups such as the modern state, whose identities and obligations are permanently maintained by replaceable trustees. The essay further holds that without the politics of the trust, modern banking could not have developed.