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Debt - Updated and Expanded: The First 5,000 Years Paperback – October 28, 2014
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“Written in a brash, engaging style, the book is also a philosophical inquiry into the nature of debt — where it came from and how it evolved.” —Thomas Meaney, The New York Times Book Review
“Debt [is] meticulously and deliciously detailed.” —Ben Ehrenreich, Los Angeles Times
"Exhausting...Engaging...An authoritative account of the background to the recent crisis. Both erudite and impertinent, [Graeber's] book helps illuminate the omissions of the current debate and the tacit political conflicts that lurk behind technical budget questions." —Robert Kuttner, The New York Review of Books
"Fascinating... [An] extraordinary book, at once learned and freewheeling." —Benjamin Kunkel, London Review of Books
“One of the year’s most influential books. Graeber situates the emergence of credit within the rise of class society, the destruction of societies based on ‘webs of mutual commitment’ and the constantly implied threat of physical violence that lies behind all social relations based on money.” —Paul Mason, The Guardian
"An alternate history of the rise of money and markets, a sprawling, erudite, provocative work." —Drake Bennett, Bloomberg Businessweek
“[A] formidable piece of anthropological scholarship... [Graeber] demonstrates how a new understanding of debt might provide us with some clues for the future.” —Justin E. H. Smith, Bookforum
“An absolutely indispensable—and enormous—treatise on the history of money and its relationship to inequality in society.” —Cory Doctorow, BoingBoing
"[A]n engaging book. Part anthropological history and part provocative political argument, it's a useful corrective to what passes for contemporary conversation about debt and the economy."
—Jesse Singal, Boston Globe
“The book is more readable and entertaining than I can indicate... It is a meditation on debt, tribute, gifts, religion and the false history of money. Graeber is a scholarly researcher, an activist and a public intellectual. His field is the whole history of social and economic transactions.” —Peter Carey, The Observer
“Graeber helps by exposing the bad old world of debt, and clearing the way for a new horizon beyond commodification.” — The New Left Review
"Terrific... In the best anthropological tradition, he helps us reset our everyday ideas by exploring history and other civilizations, then boomeranging back to render our own world strange, and more open to change."
—Raj Patel, The Globe and Mail
"Fresh... fascinating... Graeber’s book is not just thought-provoking, but also exceedingly timely."
—Gillian Tett, Financial Times (London)
—Giles Fraser, BBC RADIO 4
"An amazing debut – conversational, pugnacious, propulsive"
—Times Higher Education (UK)
"Graeber's book has forced me to completely reevaluate my position on human economics, its history, and its branches of thought. A Marxism without Graeber's anthropology is beginning to feel meaningless to me."
—Charles Mudede, The Stranger
"The world of borrowing needs a little demystification, and David Graeber's Debt is a good start."
—The L Magazine
"Controversial and thought-provoking, an excellent book."
"This timely and accessible book would appeal to any reader interested in the past and present culture surrounding debt, as well as broad-minded economists."
Praise for David Graeber
"A brilliant, deeply original political thinker."
—Rebecca Solnit, author of A Paradise Built in Hell
“I consider him the best anthropological theorist of his generation from anywhere in the world.”
—Maurice Bloch, Professor of Anthropology at the London School of Economics
“If anthropology consists of making the apparently wild thought of others logically compelling in their own cultural settings and intellectually revealing of the human condition, then David Graeber is the consummate anthropologist. Not only does he accomplish this profound feat, he redoubles it by the critical task—now more urgent than ever—of making the possibilities of other people’s worlds the basis for understanding our own.”
—Marshall Sahlins, Charles F. Grey Distinguished Service Professor Emeritus of Anthropology and of Social Sciences at the University of Chicago
About the Author
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The author spends a lot of time at the beginning critiquing the "myth" of barter (that two paragraph parable at the beginning of 8th grade economics manuals - of how people would try to barter and thus discover it would be easier to use money). He builds this two paragraph parable into a huge straw-man, calling it the "founding myth of economics" which he proceeds to attack. That's his attempt to take down the discipline of economics (pls. note I am not calling it a science). That's like taking down anatomy because the anatomy drawings in the 6th grade manual are not accurate.
The barter parable is meant to illustrate that any transactions (barter, credit, taxes etc) are nearly impossible without a universal unit of measure for value exchanged. Which is money. The parable uses the example of barter for a transaction because it is much easier for 8th graders to imagine that rather than more complicated transactions such as credit and taxes.
He argues that anthropologists found no societies without money in which significant volumes of barter exists. Of course they did not. Without money it is impossible to keep track of the price of everything against everything. Which is the point the barter parable is trying to make in a simplistic way.
Next the author argues that money is tied to credit transactions (including taxes) and that credit and money are really like the chicken and the egg. Of course they are. Credit transactions are exchanges of value with a time lag. Without a way to quantify the value exchanged they are nearly impossible to make (just like barter). And of course money is not coins. Coins are just symbols for money just like bank notes.
The radical idea found by the author is that exchanges of value (trading goods, trading value in time as in credit, paying taxes) are impossible without a way to measure that value. Which btw. is exactly what the economists' parable of barter is trying to say too.
All of this is peppered with random anthropological accounts, quotes from Nietzsche, quotes from some french economists about our primordial debt to gods, cries that our lives have become a "series of commercial transactions", and nonsensical expressions such as "bourgeois assumptions" (really? bourgeois?).
The intent is to argue that money was involved in almost everything bad people did to each other through history and therefore there's something mysterious and bad about money (debt = money = slavery = capitalism = bad, or something like that). But wooden sticks, metals, clothes, and pretty much everything else including language were also involved in pretty much everything bad some people did to some other. So why single out money? Because it is an abstract concept, and abstract and invisible things draw weak minds like candles draw moths.
Ever wonder why loonies come up with perpetual motion machines involving electricity and magnetism a lot more often than involving mechanics or thermodynamics? For the same reason - electricity and magnetism, just like money, are invisible and mysterious. Easier to make up fantasies about.
I saw a few critical reviews while reading this book, and now that I have finished, my opinion is that anyone who negatively reviews this book only read a portion of it. Most of the critical reviews are dismissive of his "point-of-view" as being "wrong." However, anyone who has actually read the whole book realizes that he has stepped back and looked at these issues from multiple perspectives and through the lens of multiple disciplines. People who are upset by this book (or by the introductory chapters) are upset because today's economics teaching focuses only on a small piece of the "economics thought pie" (my term) which is out there. Graeber steps out into discussing pieces which are less covered (or not covered at all) in typical economics classes in the West of today. So, rather than reading through his arguments, and seeing where they wind up by reading the whole book, I am certain these people gave up only part-way into the book, and then wrote a negative review because the ideas are different (much wider and more complicated) than they have been taught, and they find it "out of their paradigm" and just can't accept reading further. Yet, anyone should be able to read alternative ideas that challenge traditional ideas in order to see if their beliefs really stand up under scrutiny.
So much information is packed into Debt: The First 5,000 Years, that it could easily have been written as five separate stand-alone books. As an anthropologist at the London School of Economics, Graeber wrote a massive, sprawling history of debt, credit, and the development of markets and money; he ties it to war, slavery, taxes, tribute, government bureaucracy, religious thought, and both local and international trade, by looking at societies from ancient Mesopotamia, to India, to China, to ancient Greece and Rome, to Latin America, to the Middle Ages, and to the Modern Ages.
Why did he do it this way? Several reasons. First, as an anthropologist, he felt he was in a unique position to help us completely rethink our sense of the rhythms of economic history. Economists and historians, he points out, normally come at history in opposite directions. "Economists tend to come at history with their mathematical models--and the assumptions about human nature that come along with them--already in place: it's largely a matter of arranging the data around equations. Historians .....often refuse to extrapolate at all; in the absence of direct evidence.....they will not ask whether it is reasonable to make (certain) assumptions....this is why we have so many "histories of money" that are actually histories of coinage....Anthropologists, in contrast, are empirical--they don't just apply preset models--but they also have such a wealth of comparative material at their disposal they CAN actually speculate about what village assemblies in Bronze Age Europe or credit systems in ancient China were likely to be like. And they can reexamine the evidence to see if it confirms or contradicts their assessment." Second, as a admirer of French anthropologist Marcel Mauss, by writing this book, Graeber feels he has put to rest the real "pet peeve" of anthropologists everywhere--the myth of barter. I found this a shocking idea when introduced to it at the beginning of the book, but he has really convinced me as a reader through his extensive and comprehensive looks at every possible facet of this question.
I will try to summarize in one paragraph the large sweeping ideas covered in this book. What is money, really? What determines what gets used as money, and why? Certain historical ages operated on mutual credit systems, with practically no coinage at all in circulations (for hundreds or even thousands of years at a time); other ages operated with coin made out of various precious metals. What were the differences between the types of ages when these different types of systems occurred in societies around-the-world, and what were the causes of these differences? Historically, when did these various ages occur, and why? What is happening now, and is the current situation in the world changing? We seem to have recently entered a new age of credit, but in many ways, completely unlike past ages of credit, with historical trends now completely reversed between creditors and debtors compared to past credit ages. How does war and slavery factor into all of this? What is capitalism and how did it come about? Does it really work as it claims to? What are the problems and myths associated with capitalism? What does faith and credit in government and society mean, and what has it meant throughout all historical ages around-the-world? These are just a few of the book's largest questions.
Now I will touch on what this book meant to me personally. As an American living overseas in North Africa, I really enjoyed his discussion of how credit was handled during the Middle Ages in Europe, with most people living on credit in regards to each other. It reminded me of the system we even continue to use in North Africa, even in cities, with the merchants at the corner stores (which are our societal equivalents of 7-11 stores). Each family has a notebook which they bring with them to the store each time they want to purchase something. The merchant notes it in the book, and accounts are settled up at the end of the month. Without cash or coin available to most of the populace in the European Middle Ages, everyone operated on such bases with their neighbors, everyone kept accounts, and accounts were settled up in the whole village once or twice a year, usually at specific times or festivals. I found this really interesting. Many such examples from the book meant something to me in my own life, but they would be too numerous to list here.
The price of this paperback was one for which I got more than my money's worth, many times over, for the many pleasurable hours of reading, and all I learned, in a highly-enjoyable and extremely well-written text. I wish I could sit in on David Graeber's class. Be prepared--you will want to discuss this book with friends, so try to get a friend or a book club group to read it with you.
At the same as reading this book, I was also reading books by Fools Crow, Crow Dog and Bear Heart. Each of these authors describe how the Federal Government set out to use debt to subjugate and eradicate Native Americans just as described in Graeber's book.
Top international reviews
By June of this year, I as a UK public servant will have worked for the equivalent of one year for the Government for free because of austerity policies on the public sector brought about in 2010 that have reduced my wages and conditions of service. Yes - that's right - I have lost nearly the equivalent of a year's take home pay - after tax - since 2010. That's a loss of real money (wages) that I would have used for myself but also would have benefited the economy in general as I would have been purchasing things with it (holidays, food, travel, services, education for my kids, saving money) that would have kept other people in jobs.
This austerity was not caused by me, nor any of my colleagues (some of whom have lost their jobs) or the public sector as whole, but a deliberate act by politicians to deal with the consequences of global private bankers whose greed and stupidity caused the credit crunch of 2008 - all because the debts created by the selling of debt, and the insurance pay outs that covered those obligations became too big to pay - hence the US and UK Government bailing out private banks.
It is also because politicians blame their austerity policies on debt - the debt they say the State has written up in just providing services - never mind the £300 billion plus that the Bank of England pumped into the UK banking sector just to enable us to get at our own money through quantitative easing.
But why do the innocents - the wider public, public sector workers (like me), NHS users, the elderly who need care, the young who need services - why do they have to suffer for elite banking's mistakes? Why not get those banks to pay the bail out back - with interest?
This then is the backdrop for Graeber's book - and explains why he does condemn the current way in which is debt is treated today - something that some reviewers here seem to think is jaundiced. Is it? Should the cause not be prosecuted, and not those who were just getting on with their lives and actually doing something productive ( I for one help to build new affordable houses for example for people on low wages)?
This is a wide ranging book - it is trying to cover 5,000 years up to 2009/10 and succeeds. Rather than being an economist, Graeber is an anthropologist. I've been impressed by anthropologists since becoming aware of Gillian Tett at the Financial Times whose summations of our current woes are very well observed. Graeber is in the same vein - he looks at our current woes from different, long-term historical perspective informed by what we know about how past cultures dealt with debt, how money became to be created (he debunks the myth that money was just created for barter) and how credit and money work together (or rather, not how they work together). Graeber suggests that there are long epochs of credit/debt, punctuated by long periods of money creation and at the moment the world is in the former. The fact that this seems to be cyclical means that the book ends on a high note and encourages us to think differently next time - and we are - the green shoots of modern monetary theory (MMT) abound and even Boris Johnson's Government is thinking about spending money again (even though the Tories have pursued harsh austerity beforehand).
Graeber's is a colourful journey with much changing scenery - but don't worry - rather than going for a list of suggestions at the end, he conclusions sum up the journey - he tells you where you have been because there is a lot to take in. This for me is good writing.
For example - Feminists please note - from about p. 176 - he explores the rise of patriarchy in ancient society and how at one stage in the ancient world men and women were more equal in terms of jobs and status and seems to suggest that it was economic pressures that brought about the rise in patriarchy and the subjugation of women.
What happened to the status of women is illustrative to me of what happens in societies under stress where there are problems with debt and money - that people begin to look for substitutes for exchange in order save face or just to meet their obligations to others or to pay their way. One of those substitutes was slavery - letting people have members of your family to settle debts. Another, resulted in the subjugation of women - their fecundity , nurturing instincts and sexuality becoming something not as a value of itself within the family unit but now to be traded by society openly and also is given an equivalent value with other commodities. Today - during austerity - a lack of money based on being told that we are paying down real or imagined debts that we did not create - means that more women are selling their bodies for cash and children are being paid to run drugs around the country and people are hiring out their sheds as places to live or their drives for others to park on. Slavery is now something we are becoming aware of again. Also, debt is being used to justify the loss of common wheal assets such as land and natural resources into the private sector.
Another refreshingly honest aspect of Graeber's work is that he establishes the concept of debt as real, legitimate, natural, desirable even in societies and that humans do attach importance to giving and receiving in kind. He explores how this concept of debt helps to provide stability in society - the concept can be associated with communism - not the Soviet State organised kind, but the natural solidarities that occur across class boundaries in societies. Debt is about what kindnesses and considerations we owe to each other as our paths cross. This signifies lucid and balanced writing to me.
But Graeber also shows us how debt can be weaponised and used in a negative way by human greed and or the need to make war (both abroad and at home on the very same people we share our space with) , and how the monetisation of debt has become such a big problem.
The clincher for Graeber though is why - if the principle is that debts are to be paid - did the banking sector seem to get off scot-free? Ok - many lower pecking order banking staff got laid off - sure - they paid the price, but how many of those CEOs kept their ill-gotten gains? How many went to court over selling sub-prime loans or taking out insurance on financial instruments they knew would fail? Why were too few banks wound up?
It's inconsistencies like this that causes Graeber to question the morality of debt - yes, debts should be paid in a good society (such as the kindnesses we owe each other, our human obligations) - but what about the monetised debts created from immoral motives such as predatory mortgage lending, insuring things that we have a keen interest in seeing fail (like credit default swaps) or betting speculation ? How can the reciprocal motive/morality be justified there?
Graeber questions rightly in my opinion if such immorally obtained debts should be honoured. Instead he echoes and advocates the work of Michael Hudson about debt jubilees - where rulers in ancient times wiped the slates clean of debt because it got out of hand (except mercantile debt) in order to re-set the economy for the good of society ('.....And Forgive them Their Debts', 2018). There is such a jubilee mentioned on the Rosetta Stone itself according to Hudson - something not widely shared.
So, I come back to my opening story of the loss of my income because of the alleged indebtedness of my employer - the Government. If the bankers paid back the £300 billion + to the Government and the CEO's were made to liquidate their ill-gotten assets in order to do so, the payment of that debt would make the national debt go away wouldn't it? And then there would be no austerity. The NHS might very well be funded properly as would care for the elderly and our libraries would reopen and my pay conditions restored (all of this ignores of course that the Bank of England is nationalised and can print the money anyway if instructed by the Government - as it did when the Government told it to print £300 billion + quantitative easing (QE) in to the moronic banking sector or a billion pound bung to the DUP to prop up Theresa May - but that is a whole different theoretical perspective dealt with by other writers elsewhere).
So - who then are the REAL financial and moral debtors in our society right now? Clue: They are not those who are suffering austerity like me, my public sector colleagues, you or the average man or woman in the street who do not work in the upper rungs of the financial sector - that is for sure.
The only bit that lets the book down is the conclusion, which asks whether we shouldn't just stop worrying about being in debt, rather than asking why , for instance, private banks, who can create money out of thin air, have any right to get it all paid back or not. It fails to ask how it's just for people paid low wages to be in debt as a result, while bank executives who are paid insane wages get paid far more than they could ever possibly have earned in any meaningful sense. By not questioning the causes of debt enough, and whether a lot of it is really owed in any moral sense, it lets itself down. But that shouldn't take away from the 95% of the book that is a brilliant history and analysis of money and debt throughout history.
On my second listening of the audio version!