Review of “Debt: The First 5000 Years” by David Graeber

The history of debt is a vast and consequential topic that remains understudied. So there is no way this book could live up to its title. Much work remains to be done before anyone could produce a satisfying summary of debt history in 400 pages, if that will ever be possible. Graeber’s book is however a remarkably original achievement, and even the hubric title is well chosen. The ultimate value of this work depends on its reception, and whether it becomes a departure for further critiques and research. Hopefully this book will someday be re-written in several volumes, but this is a good start for now.   

In typical anthropological style, Graeber assembles a hodge podge of loosely connected aspects. He plays conversationally with empirical data, philosophical ideas, and polemical arguments – what you might call transitional ethology.  Sometimes these aspects don’t sit comfortably together, but that discomfort seems intentional. This is a history of problematic entanglements, and the author is not afraid to get himself tangled up in the problem.  His polemics are concise and fall within the expected norms of humanist academia. 

He advances a criticism of economics in the tradition of Marcel Mauss. The book begins by debunking the myth of original barter that founds classical economics. He claims that mythology obscures the universality of credit systems. So primitives do not barter one thing for another, they keep tabs. This elegantly establishes the conceptual key for the history that follows. In a later chapter, he locates the discipline of economics historically, examining the classical theories as they fit into social transformations. His critique highlights the economist’s zero-sum models of exchange, which he links with the use of national currencies based on metals, and with philosophical materialism. So this is a history of the ontology of transactions in broad strokes.     

In the early chapters, he distinguishes three kinds of human relations – hierarchy, communism, and exchange.  These terms have no moral values when he writes analytically, but they suddenly take on a political sense when he becomes polemical. The oscillation in the sense of these terms – between conceptual analysis and moral critique – is a remarkable feature of contemporary anthropology. Graeber is writing in the Maussian tradition that disparages the neutrality of monetary exchange relations, and favors the generosity and compassion of organic communities. His moral criticism emphasizes how humans are “ripped out” from communities into neutral exchange relations. He analyzes the extraction of slaves in the early modern period, and attempts to link this extraction with the zero-sum models of exchange in economics.

The term “human economy” is introduced to distinguish primitive currencies (shells, feathers etc.) from national metal-based currencies. Primitive currencies are apparently not used for the exchange of everyday commodities, but rather are exclusively used in the transaction of humans. Shells and such objects are used for the exchange of wives between villages and to settle disputes. And he says these are not actually even payments, but symbolic gestures that indicate something is owed – they are insufficient payments because humans are without price.  A village receiving a woman may give some shells to the village she comes from, but those tokens will be returned when a woman moves in the opposite direction. So these are less like modern currencies, and more like a system of debt accounting. Or the shells might be given to the victims of a serious violation by the family of the perpetrators, indicating that something is owed to them. These primitive currencies can be used in this way to mitigate the danger of blood feuds.  But they are not used to buy shoes or bars of soap, which he says villagers purchase on credit.  The author provide many fascinating and suggestive examples, but lots remains to be said about how these human economies interfere with systems based on currency calculation. 

I am inclined to call Graeber a ludic moralist. He dislikes the cold calculation associated with modern metal-based currency, and favors the playful reciprocity of informal credit systems. The problem is that currency allows for precise calculations where relationships gets cancelled out to zero.  When payments are made in exact amounts, then transactions gets completed, and there is no further relation between the participants.  Whereas, in traditional credit systems, when values were not represented in currency, there would always be some outstanding debt, and so relations would continue. So in this way it would seem that Greaber prefers debt to currency, though not when debts are calculated in currency.

According to the author, everyday transactions have always mostly been done on credit, and the use of currency for procuring everyday goods is exceptional. This means that debt should be taken as the fundamental economic model. His other main argument – which also seems quite original – is that there is a long historical oscillation between systems of credit and systems of currency. This is reminiscent of arguments made in world systems theory by the likes of Ferdinand Braudel and Immanuel Wallerstein, who are briefly mentioned.  Lots remains to be done on how these sorts of longue durée theories are developed and presented, and I feel this kind of writing is still in its infancy.  

Graeber says the earliest civilizations, such as Sumer, used credit and not currency, which seems uncontroversial. According to him, currency originated in the ancient kingdom of Lydia. The key innovation there was a system where soldiers were paid in metal coins, and those same coins were demanded as taxes from the peasants. This institution was adopted by the Alexandrian empire, and then spread throughout the Hellenistic world. This was the beginning of what he calls the Axial Age, a violent time when kingdoms paid their soldiers in metals which led to plundering and slavery.  There was a circular system of violence surrounding the use of metal currencies in the ancient world: metals were plundered by soldiers and mined by slaves, and then melted down into coins, and paid to soldiers, who plundered metals and conducted slave raids. He highlights how the Roman institution of private property (dominus) was linked with both slavery and metal currency, and how this concept returns in modern property law. This adds metaphysical complexity to the old Marxist notion of primitive accumulation, so that it was not just a matter of accumulative symbolic wealth, but also part of an institutional evolution.

The institution of metallic currency is linked with ancient materialism, which he associates with the emergence of the classical philosophies and religions around 400BC. His concept of the Axial Age is rough and schematic, and leaves huge questions open. I think he is on the right track, but this part of the book has its weaknesses.  He doesn’t provide enough data on where exactly metallic currencies were issued, and so there isn’t enough empirical basis for evaluating his model of the Axial Age metaphysics. We would need to see exactly where currencies had spread, and compare that with the spread of the materialist philosophies. He does highlight the coinage at Meletus, the home of materialist philosophers like Anaximander and Thales, but that is only a drop in the bucket. And there are large questions left open concerning classical materialist dialectics and its relation with imperial barbarism. He cites lots of research on the archaeology of the ancient world, though his erudition on this topic is questionable. His discussion of the emergence of Abrahamic religion is suggestive and intriguing, particularly what he says about honor and the rise of ascetic desert patriarchs against urban credit system of Babylon, but this discussion remains undeveloped. For instance, he suggests that the Semitic ban on usury was part of a broad swing away from credit, but then there is the question of why the Israelite never issued their own metallic coins.      

The metallic currencies of the Axial Age were followed with the credit systems of the Medieval Age. This was the age where religious institutions took over – the Roman Catholic Church, the Eastern Church, the Abbasid Caliphate, and Buddhism in China. Religious institutions rejected the violent systems of metallic currency which predominated in the ancient world, and coins were melted down and made into devotional statues. Transactions were done on credit again, even though they were sometimes calculated in currencies that no longer circulated.  Relations based on credit were promoted by theologies that described the human situation in terms of sin, redemption, karma and similar concepts. He suggests the Chinese state grew weary of Buddhist monasteries that were melting down its currency and forging golden Buddhas. As the monasteries accumulated wealth, they lent it out to peasants, who then became indentured servants – so there were debt systems which emerged around religious institutions.  Where the materialist ontology of the axial age worked on currencies, the idealist ontology of the medieval period worked on debt. This is an elegant model, though I am curious how it will behave if considered more dialectically, and how it would interact with the historical models of Jan Patocka or Hegelian Marxism. 

The early modern period saw a swing back to materialism and national currencies. Unsurprisingly, he targets the zero-sum exchange models in John Locke and Adam Smith.  But more remarkably, he groups Frederic Nietzsche into this set, and does a strikingly original and convincing criticism of the philosopher. This is a very remarkable engagement with the anthropological field. In the 1970’s, Deleuze and Guatarri nominated Genealogy of Morals as the founding text of ethnography.  But, it seems Graeber would criticize their complicity with the utopianism of modern materialists, and perhaps he is asserting Marcel Mauss as founder of the discipline. The idea is that materialists assume zero-sum exchange relations, and he finds this relation in Nietzsche’s models of barbaric ancient justice. What the philosopher called the “morality of the mores” seems similar to the violence of the Axial Age, and so perhaps he took barbaric imperialism as a norm for human relations. The Dionysian philosopher certainly indulged in violent fantasies, and Graeber offers a valuable clue for contextualizing those fantasies. I would emphasize that Nietzsche was a writer, and not an historian, and so his work should be defended as literature, in the same way critics defend Sade’s writing. So I agree with his argument, but think there is still a case for Nietzsche’s phantasmagoria of the Axial Age. This is again the question of introducing more advanced dialectics.

The final chapter does not say much, but his argument is fairly self-evident. He says that when Nixon took the US dollar off the gold standard in 1972 that was marks a shift back towards a credit economy. This means we are heading away from the materialist ontology of national currencies. This links together various trends in the world today. There is the integration of national currencies into foreign exchange markets, along with widespread dollarization. And national currencies are getting replaced with the US dollar, the dollar itself is getting ever more connected to credit markets. For instance, it is being evaluated relative to US national debt, which is even more the case for other currencies. So currency itself is transforming into debt, which you could say it always was, but then the fact is becoming more salient. Then there is the opening of new credit markets that effect every person on the planet, from microcredit to complex derivatives. Beside all these economic transitions, there is the return of religion, particularly Islam, which is ending the age of secularism materialism. And there are people like David Graeber writing books that say human transactions in the next age of history will run on credit and not metallic currency! Of course, the gold-bug movement today is quite strong, but that may just be resistance to the pendulum of history. 

The author seems to think the present violence in the world is a legacy of the metallic currencies of the modern period, and that the credit systems of the future will be more humane as they drift away from the zero-sum logic of monetarism. This opens some fascinating and hopeful lines of speculation concerning the future of credit and religion. It seems the credit system that predominates today (i.e. neoliberal finance) is getting discredited. But if we are moving into a general epoch of credit, then what sort of credit system might replace it?  If the present system is being discredited specifically because of its exploitative interest rates, then the Islamic prohibition of usury could become significant. Maybe we’ll see the rise of some Islamic systems of credit, because they are a natural antithesis to the system that is on its way out. Then there is the question of what becomes of currency, and how quickly the changes take place. How long will the brutal monetarist ethics of calculation and high-interest rates persist? Are some populations demonetizing more quickly?  Are human relations getting recodified by an ethics of non-calculative ludic reciprocity? 

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One Response to Review of “Debt: The First 5000 Years” by David Graeber

  1. Messythinker says:

    I take issue with a few of your interpretations.
    “So in this way it would seem that Greaber prefers debt to currency, though not when debts are calculated in currency.” You clearly read the text, but I think you overlook a glaring issue that Graeber states about Debt, namely, it’s tendency to be the perversion of a contract between two people that are supposedly in equal standing. Those who entered into the contract are supposedly equal, but the Creditor rigs the system in favor of themselves. Who wouldn’t? This then creates institutional violence for example having a bad credit rating chasing someone long after the debts are paid.
    “The author seems to think the present violence in the world is a legacy of the metallic currencies of the modern period, and that the credit systems of the future will be more humane as they drift away from the zero-sum logic of monetarism.” I don’t think he makes this jump. In fact, I would take a contrary position that by showing the nature of Debt to not have really changed in 5,000 years, that it’s been a vast facet of “Civilization” and it’s growing totality, I believe he is gravely worried about the possibilities the future holds. Furthermore, he shows how traditional systems become perverted by the “market logic” and it eventually boils down to Power.

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