Debt: The First 5000 Years

David Graeber’s Debt: The First 5000 Years is a magnum opus, with a scope so vast that any attempt to summarise it exhaustively, in a review such as this one, is unlikely to do it justice. This resistance to summary is partly due in straightforward fashion to its 544 page length, but length alone is an insufficient explanation for its expansive defiance—and it defies much more than mere summary. It begins with seemingly simple questions: “Must one pay one’s debts? If so, why?” The answers seem obvious, even self-evident, until, that is, one tries to justify them. Even within standard economic theory, it is not the case that all debts must be repaid: interest rates reflect the risk that the creditor assumes that the debtor might default. So whence the pervasive sense that all debts must be repaid? Very quickly one starts to see the looming spectres of moral judgment and threats of violence, in just two basic questions. With even a tiny bit of scrutiny, the complex relationship between economic questions and morality, which is central to this book, begins to surface. 

The book is perhaps first and foremost a reassessment of received economic wisdom of this kind, those assumptions so ingrained that one may never have noticed one had assumed them at all. In this domain Graeber’s heterodoxy, verging often on iconoclasm, impresses, and sometimes devastates. An early and central point of contention is the fact that many of Adam Smith’s thought exercises have a total dearth of historical or anthropological evidence. Since much economic theory still rests on Smith’s thought, this has serious implications. For example: The inescapably common story from Adam Smith is that there was once a barter economy, out of which money, then markets, then credit, then complex financial instruments naturally emerged. The problem is—and apparently anthropologists and economists for the past century have quietly known—that there is not a shred of evidence that such a society has ever existed. Instead, Graeber argues, so-called primitive societies have always had complex credit arrangements, out of which currency can arise only when power is centralised, and into which currency sometimes fades back when those central powers disappear (e.g. in the wake of the Roman Empire). It is intuitive and not difficult to see that credit arrangements are the real means of managing relationships within small groups; one does not keep ledgers or tallies for family or friends. This type of relationship, then, rather than those of barter or currency, is closer to the state of nature. Graeber mobilises a wide variety of anthropological evidence to argue that markets tend to arise in tandem with a state or other central power (like a religion), and not in any way naturally or inevitably from human interactions.

Early on in his arguments one can get the uneasy feeling, no doubt intentional, that much of modern economic thought amounts to a house of cards. But even if one retains one’s faith, the extent to which economic thought is constrained in its own thinking by certain assumptions is at the very least provocative, and sometimes seems quite groundbreaking. The book, through a highly literate exposition of the historical and anthropological evidence, shows that many of the assumptions that undergird modern economics about the state of nature, philosophy, and human nature itself rely on evidence which is a result of, rather than a precursor to, that very system of economics. The position one is in, then, can look a bit like an attempt to assess a building’s architecture without leaving the room in which one happens to find oneself. From such a vantage point, it can be easy to forget that many economic paradigms are impractical or impossible to apply to a large part of history.

As for history, in an absolutely brilliant and original stroke, Graeber shows how cycles of credit and market economies have alternated over the centuries. He divides history into a period of credit lasting from 3500 BC to 800 BC, followed by the “Axial age” (so-called by German philosopher Karl Jaspers, in the sense of “pivotal”) which used bullion, between 800 BC and 600 AD. This led on to the Middle Ages, between 600 – 1450 AD, a reversion to credit but definitively not, as is often claimed, to barter. This was followed by the Age of the Great Capitalist Empires (1450-1971, again using bullion). Graeber then demarcates the beginning of the current era at 1971, when Nixon cancelled international convertibility of US dollars to gold, as “The beginning of something yet to be determined.” As it takes him hundreds of pages to argue, these divisions are difficult to summarise; suffice it to say that they are absolutely captivating.

Even more provocatively Graeber seeks to explain the strange coincidence that the major world religions and systems of thought—Judaism, Confucianism, Buddhism, Hinduism, Jainism, as well as Greek philosophy—all arose virtually simultaneously, around 600 BC. Graeber points out that this is precisely the same time that coinage, and thereby a cycle of currency that would last until the Middle Ages, arose, and that the period between coinage appearing and philosophies about the nature of reality is tightly correlated. He argues intriguingly that world religions formed in reaction against materialist philosophies, now mostly forgotten, which submitted that everything (notably human life) was material and therefore fair game to be bought and sold with newly-minted coins. Once again, a summary cannot do justice to this argument.

It would be easy to point to any of a multitude of other engrossing areas that Graeber investigates, from Primordial Debt theory, to a history of slavery in Ireland, to the etymological relationships in many languages between financial debt and moral guilt, to whether saving someone’s life ought to make them indebted to you or vice-versa, to why kings tend to dislike gifts, to how The Wizard of Oz is really an allegory about monetary policy. But once again, your time is better spent reading his book than my summary. Above all he explores from an abundant anthropological knowledge the huge variety of arrangements by which humans have endeavoured to help and harm each other throughout history. If I have any criticism of the book it relates to this staggering breadth (and it could equally be called my own failing): Graeber’s viewpoints, always supported by a bewildering array of evidence, are often so novel and so contrary to received wisdom that it can be difficult for a layperson to assess their viability or veracity. On the other hand, a book that so compellingly challenges its reader and raises such fundamental questions about economics, politics, history, philosophy, and religion, must be considered a masterpiece. As a whole, the book could be seen as an interrogation into why our collective imaginations so dismally fail to provide us with any conceptual alternatives to either the current economic status quo or unimaginable catastrophe—and if even the catastrophe can’t be imagined, it can look very much like we are incapable of imagining anything outside of exactly what we have. While the book shies away from prescriptions, its impressive erudition and little-known histories provide fertile ground for inspirations of their own. I rarely re-read books but I feel almost obligated (dare I say indebted to the author?) to do so here.

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