This chapter argues that the endemic indebtedness of the nation-state, which has now become global, is the outcome of a longue durée history which should be traced back to the particular circumstances of its emergence in Western Europe. Early European feudalism was characterised by the competitive conflicts between warlords for the possession of land, which was the main source of wealth and power. But each successful warlord was caught in a double-bind: in order to maintain and expand his power, he was compelled to alienate some of his land rights to his potential rivals. The process of the “monetisation of society”, which depended on borrowing from the long-distance traders of the time, provided the only means of exit from that double-bind. But that solution laid the basis for the eventual subordination of the emergent territorial rulers of the nation-state to the international power of their creditors.