288 of 318 people found the following review helpful
Future Classic in Economic Anthropology,
This review is from: Debt: The First 5,000 Years (Hardcover)
This is a very interesting and important book. Graeber's writing style is engaging and provocative, enjoyable and fascinating.
Graeber has been accused as being overly political in his interpretation of history and anthropology. There is a warrant of truth to this accusation, but Graeber is dealing with highly political, and deeply moral, dilemmas which dominant history and have implications for contemporary circumstances, an apolitical book would be impossible (many philosophers of science (right and left), including myself, reject Hume's Law or the radical distinction between facts and values, really that is all Graeber has done).
At the same time Graeber is conducting anthropological science at its best and scholarship that is interesting to all human beings concerned with the distributional inequalities within the United States and between nations.
Below I attempt to divide the book into six major theses, in so doing it can be seen that the first five theses are historical and scientific, only the last is political. In other words, the politics and science can be logically separated.
Given Graeber politics should non-leftists read this book, Yes! Graeber's book is destined to become a classic text. Graeber has the spirit of F. A. Hayek, not politically, but rhetorically. Hayek's <<The Road to Serfdom>> (1944), is a highly political book (from the right) but with a very important major thesis, namely if the (philosophical) <<ends>> of intervention cannot be agreed upon, predatory politics will be the manifestation. Hayek's economics are impeccable, his social theory intriguing, his analysis of politics second to none, and his understanding of history impressive. If a leftist cannot learn from Hayek, and if a rightist cannot learn from Graeber, the impoverishment and the political bias is much more the reader, not the author.
What does one find in Graeber's book? The primary thesis can be identified as `the duality of debt' (my term not Graeber's). On the one hand debt has a type of ontological expression, i.e. debt is what binds us as a species, e.g. we are indebted to our parents, family, culture, society for our well-being and personal development, and more theologically an indebtedness to the Cosmos/God. This side of debt is found in its expression (i.e. language) and development. On the other hand debt has an historical existential tendency to be employed to enslave or create circumstances of debt peonage.
Graeber's interpretation of contemporary debt is that it has this "duality," it binds us socially (enabling many people to start a life) and has a tendency to (too often) put borrowers in a debt peonage relationship, not with the plantation owner, but with contemporary banks.
If the primary thesis can be expressed as "the duality of debt" there are several other major theses of considerable interest. I identify six major theses.
(1) Debt predates money
This is important for several reasons. I will mention three. First money does not emerge with markets, which means that markets and money can be differentiated and analyzed independently. Second, if money was not needed for market activity, this begs the question of why it was invented. Third, the social properties, i.e. non-market properties of money may be crucial to understand it as a phenomenon (actually this historical interpretation impressively compliments Post-Keynesian theories of money and the contradictions of its functions, which is not mentioned by Graeber); (this thesis is borrowed and developed from the anthropological work of Mauss and "definitive" work of Humphrey).
(2) Government construct national markets
Public intervention is the root of markets. Non-intervention, or laissez-faire is an historical oxymoron (this thesis is borrowed and developed from the work of Karl Polanyi).
(3) Primordial debt theory
The argument here is that debt is the basis of social-being. This is the ontological/theological side of debt (i.e. we owe our parents, etc.). Money is invented to quantify certain types of debt. Now the tricky part is that monetary policy and social policy are necessarily linked and cannot be differentiated (this thesis is borrowed and developed from Aglietta and Orlean).
(4) Military-coinage-slavery complex
Historically the emergence of coinage (i.e. money) is linked with military efforts, which in turn tend to manifest debt peonage situations and enslave. The most simple example is a monarch, in order to pay a traveling army, issues a token/coin and proclaims all subjects of the kingdom must return a said amount of these coins to the monarch. The only way to get these coins is from the soldiers by providing them with some provisions, the soldiers pay in coin, and the subject/agent gives the coin as a tax back to the monarch (this thesis is borrowed and developed from Ingram). What Graeber adds to this story is that it is quite common that the tax generates indebtedness, the indebtedness generates circumstances of debt peonage and enslavement (sometimes temporarily, sometimes for life). He also demonstrates this is not simply a European phenomenon, but global throughout history.
(5) Historical attitudes toward debt/World cycles.
Whereas the first four theses were borrowed from various theorists, that Graeber then helps to confirm from anthropological studies, which he then synthesize and develops, thesis five is quite unique to Graeber. His thesis is that attitudes toward debt not only change over time (he identifies four the Axial Age 800 BC - 600 AD, Middle Ages 600 - 1450, Capitalistic Age 1450 - 1971, Something Yet to Be Determined Age 1971 - future), but attitudes are also cyclical and global (Europe, China, India, Africa, etc.). Broadly Graeber argues that the Axial Age tended to emphasize the quantification of debt, whereby debt peonage and slavery from debt was common; the Middle Ages were a time when the primordial debt was emphasized, and debt peonage tended to be resisted; the Capitalistic Age is a return to the quantification and systems of slavery and debt peonage; in the SYBD Age we see a resistance toward debt peonage and the dominance, not of monarchs, but toward financiers and banks begin to slowly emerge. Whether the resistance will continue or a return to debt peonage (e.g. owing money to a bank for life) will continue or whether there may be some new institutional arrangement whereby the importance and dominance of financiers and banks is reduced is yet to be determined.
(6) History removes the veil of debt as road to servitude and peonage
The idea here is that when we witness different existential debt peonage throughout history, this helps to shift our own thinking on debt. Why is it we must borrow money from a bank to start our life? Although this aspect of Graeber's argument is not anthropology, it is a highly important implication from the scientific and historical investigations of debt. If the contemporary circumstances are not analogous to the past, why not? (Notice: it really is only here that Graeber is purely normative. But it is a normative question that must be asked. His answer makes it political. However, his anthropology and scholarship strongly supports his politics).
This is a very powerful book on several fronts. It is a very impressive synthesis of several different theories in economics, history, anthropology, literature and sociology (this part constitutes a very impressive scholarship) and develops a uniquely Graeberian interpretation and implication. I highly recommend it and predict it will become a classic in economic anthropology.
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Showing 1-10 of 26 posts in this discussion
Initial post: Jan 6, 2012 12:06:12 AM PST
David Graeber says:
Thanks for such a generous and thoughtful review!
Posted on Mar 10, 2012 9:07:20 AM PST
Posted on May 7, 2012 9:06:15 PM PDT
I don't want to give this book a low rating, but this is one of those books where the author has to rail against everything. This is why I am leaving a comment instead of a review. The author spends a whole chapter arguing against economic theory set forth by Adam Smith. It is akin to arguing flaws in Darwin's Theory of Evolution. Both of these theories have had over a century to develop into more robust forms and it felt almost silly to devote a chapter to this endeavor. After listening to the audiobook version of this title, I think that the book is a little long winded for my tastes. (The narration was fine). It is a decent book, but this review is pretty much what you will take away from the book.
In reply to an earlier post on May 8, 2012 7:48:30 AM PDT
Last edited by the author on May 8, 2012 7:54:21 AM PDT
Thanks for your comment. My reaction to this book is quite different from yours; however, I can understand your reaction.
Although not Graeber's focus in the book, the economic and social policy implications of Graeber's anthropology are huge. It is this aspect of book which made it a page burner for me (although it sat on my shelf for nearly 6 months, because I did not realize the degree of its importance).
Three broad fundamental implications, (1) economic, (2) socio-historical, and the last (3) more philosophical/psychological/theological.
First the economic. Graeber makes this quite simple and convincingly, money *is* debt, but debt *is not* necessarily money. Indeed debt is the basis of money (Graeber demonstrates this fact historically and contrastively, although not so theoretically).
This has economic policy implications, (a) balanced budgets are a pipe dream and if taken serious will destroy a market economy, (b) taxes back debt, hence taxes have a lower limit, which the U.S. is probably pushing up against, (c) the monetary authority cannot ultimately control the money supply, because it cannot control debt (e.g. CDOs and CDSs, but also includes other forms of credit/debt), (d) stability of a market economy radically depends on employment policy, not monetary policy. (Graeber's work and Modern Money Theory tie together brilliantly; the best single introduction to the latter, being Randall Wray's "Understanding Modern Money: The Key to Full Employment and Price Stability." Understanding Modern Money:The Key to Full Employment and Price Stability
Second, debt is coercive. Taxes are imposed to create debt, debt is then used to enslave, obligate, and exploit. This is easy to see historically, but often missed, i.e. taken for granted, in its contemporary forms. With this we can better understand the historical incidence of slavery and imperialism, and better understand the (un)intended consequences of contemporary globalization and the role of the international debt institutions in the IMF, World Bank and WTO.
Third, debt has a type of cosmic warrant. Graeber suggests we existentially are indebted to (immediately) our parents, but ultimately more philosophically/theologically to the cosmos for our life (which we *pay* for with our death). This *always present* qualitative sense of debt (i.e. guilt) makes us as human beings liable to the imposition of a quantitative (i.e. monetary) debt (i.e. to hustlers, swindlers, economic hit men, and bankers).
It is very difficult for me to understand why the majority of Americans are indebted to banks and bankers for their entire life. How does such a social phenomenon manifest? Graeber helps to explain and demonstrate this
In reply to an earlier post on May 8, 2012 8:20:43 PM PDT
Dear Hans, You continue to improve the quality of your review and I must commend you. While in college, I dabbled in a few different majors including Finance, Economics and Accounting. While I appreciated much of the book, I eventually grew weary of the economist bashing and anthropolgist praising. Both fields have their strengths and weaknesses and I often felt that Mr. Graeber held a grudge. I agree that there are major flaws with standard economics theories (see the books on behavioral economics by Dan Ariely Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions to see a great example of what could improve. I just wish there was more building on the shoulders of others than trying to knock them down. Thank you again for your additional insight and review.
In reply to an earlier post on May 9, 2012 10:35:26 AM PDT
Last edited by the author on May 9, 2012 10:36:38 AM PDT
Thanks for your reply and kind words. Ariely's book is quite good, however, he is really chipping away at the margins. I fully agree with you that behavioral economics is a rather serious amendment to mainstream textbooks, but Ariely's work is a rather friendly amendment, but an excellent and enjoyable read.
Also I believe that Graeber would agree there is very good economic theory, moreover, Adam Smith fairs quite well in Graeber's account. In context, Smith mistakes are indeed quite minor, especially in comparison to exaggerated interpretations and misrepresentations of what is actually found within Smith's writings.
Finally, it should be added that Graeber's complaint is not aimed just at economics, but indeed at anthropology. The problem is that anthropologists assume, via economic postulates of universal human nature, competitive market activity whenever there seems to be exchange and interaction. The great economist Karl Polanyi demonstrated this is a major mistake in anthropology. For example, if a future anthropologist were to assume monetary exchange relations in contemporary American households, there would be great misunderstanding of family relationships of 2012, between spouse and spouse and between parent and child. Contemporary family relationships have little to do with monetary exchange relations.
The issue is that there is a symbiotic relationship between economic theory and anthropology; when the economic theory informing the anthropologist is faulty, the interpretation of the anthropologist is faulty; in turn when anthropology is faulty it helps to reproduce faulty economic theory.
In short, what I am attempting to suggest is that Graeber's critique of economics is simultaneously a critique of anthropology.
The real problem here is that Graeber's critique is really a deep philosophical position, but Graeber has not provided us with the letter of his philosophy. I am not critiquing Graeber for this, but I am saying that the absence of an articulated philosophy of science can indeed make Graeber's book rather difficult.
In reply to an earlier post on Jun 5, 2012 10:25:47 AM PDT
Your review and reply here, both very incisive, drove me to search this last hour for whether you might have reviewed somewhere Glyn Davies' History of Money: from Ancient Time to the Present Day. A History of Money: From Ancient Times to the Present Day It appears you have not. I would be especially interested in any observations you might have on this book's treatment of medieval Middle Eastern and Central Asian development of financial instruments, as well as those, if any, on "The Islamic Moral Economy: A Study of Islamic Money and Financial
Instruments" by by Shafiel A. Karim, or any other such sources you might recommend for a history course I am gestating on finance in the era between Mohammed and Khubilai Khan. Thanks, J. B. Schlubach
In reply to an earlier post on Jun 5, 2012 1:22:53 PM PDT
Thanks for your kind comment. I have read Davies book quite some time ago, but frankly it is not fresh enough in my mind for comment. I am not familiar with Karim's book.
I come to monetary issues from a more monetary theory prespective which than pushes into the history. I very much like the work of Randall Wray, he has an new article (May 2012) on alternative histories of money available free on online at the Levy Institute (I already recommend his book above).
Nonetheless your course seems to be going in a different direction. I do have some suggestions. However, let me preface these suggestions with the cavet that I come across this material because it tends to lend strong historical support to Modern Money Theory, but really I flirt with the history.
The first book has lots of history:
Islamic Capitalism and Finance: Origins, Evolution and the Future (Studies in Islamic Finance, Accounting and Governance)
The second book, limited history, but places finance in the context of western religion:
The Art of Islamic Banking and Finance: Tools and Techniques for Community-Based Banking (Wiley Finance)
The next two books may not be of direct interest to your course, but otherwise you may find them both of personal interest
The Third book, basic introduction to alternative forms (i.e. islamic) of finance:
The Stability of Islamic Finance: Creating a Resilient Financial Environment for a Secure Future (Wiley Finance)
Finally, I also very much enjoyed this book, which may or may not be of interest to your project, but to be sure a PostWWII account of Global finance:
The Global Minotaur: America, The True Origins of the Financial Crisis and the Future of the World Economy (Economic Controversies)
In reply to an earlier post on Jun 5, 2012 7:12:31 PM PDT
Last edited by the author on Jun 5, 2012 7:13:45 PM PDT
Many thanks. The Cizakca is exactly what I have been looking for, the Randall Wray piece proved very useful indeed, and the Varoufakis I will read to help me out in a discussion, to be resumed, at brunch last Sunday in which I argued that there is not a conspiring cabal meeting in secret to drive the fruits of the world economy into their collective pocket as they wring their few several hands in greedy glee.
In reply to an earlier post on Aug 13, 2012 4:27:20 AM PDT
Christopher R. Travers says:
I have often thought that the reason why the third Norn in Norse cosmology is named "Skuld" ("debt") is that we repay the lot of life granted to us in our death. I did a talk about this entitled "Fate and Time, Life and Debt in Norse Mythology."