David Graeber’s Debt: The First 5000 Years is a difficult book to review. Is the standard for evaluation the quality of Graeber’s scholarship of the coherence of his narrative? Do you judge a book by its ability to spark independent thinking or by the soundness of its own arguments? Debt is a book that will appeal to the sympathetic reader and annoy the skeptic. Critical readers will find a grab bag of intriguing bits and pieces to play with. Unfortunately, the whole is less impressive than the sum of its parts.
The Good
As a historical survey Debt provides valuable perspective to the contemporary ideologically driven economic debate. Graeber convincingly demonstrates that that markets have not historical been opposed to government planning so much as they are a product of it. Modern markets and financial mechanisms emerged most readily when and where governments encouraged them, usually as a means to coerce citizens into funding and supplying military campaigns. Monarchs, despots and warlords throughout history have instituted taxes, payable only in official currency of the realm, in order to force captive populations to produce goods salable for currency of the realm – typically weapons and other war supplies.
Along the way Graeber thoroughly debunks the barter myth common to every introductory economics textbook ever written. As the story goes, at some indeterminate point in the past, proto-economic man grew frustrated with the inefficiencies of barter and decided a common currency was needed to facilitate more fluid trading relations. Hence money was born…and gdp grew grew happily at 4% per annum ever after. Graeber’s research reveals the absurdity of this fairy tale, documenting the long evolution of debt relations that preceded the use of transactional currency.
For the skeptic this point may be a bit of a straw-man. In my experience, through both formal education and informal learning, the barter myth has been presented more as a thought experiment than a historical fact. For what it’s worth, Graeber claims that Adam Smith was the originator of the myth and that Smith fully expected contemporary explorers to stumble upon proto-economic tribes living out his ideal-barter fantasies.
Suffice it to say, if the barter myth is foundational to any of your economic principles you might want to do some soul searching.
The Questionable
The trouble with Graeber’s historicist approach is that it restricts him to relatively limited modes of argumentation. Graeber clearly intends to cast doubt upon the foundations of modern capitalism, however, casting doubt on certain bits of conventional wisdom is about all that the historical record is able to accomplish.
Demonstrating that the earth was not created 6,000 years ago does not disprove the existence of a biblical God. Likewise, the mythical origins of primordial barter are only tangentially relevant to modern applications of monetary theory.
Much of the book takes the form of describing the morally distasteful origins of specific institutions and thereby insinuating that the reader ought to doubt the credibility of those institutions. Because this approach is necessarily inconclusive, Graeber is forced to lead the reader in the intended direction via the tone of his language:
The story of the origins of capitalism, then, is not the story of the gradual destruction of traditional communities by the impersonal power of the market. It is, rather, the story of how an economy of credit was converted into an economy of interest; of the gradual transformation of moral networks by the intrusion of the impersonal – and often vindictive – power of the state.
Unfortunately, Graeber never steps outside his own perspective long enough to integrate the many indictments, like the one presented above, into a coherent narrative.
If the origins of capitalism are so repugnant why has it proliferated so successfully?
Debt offers myriad case histories but fails to extract a compelling thesis from them. The vigorous success of capitalism cannot be so easily dismissed as simple dogmatic adherence to historical myth. The best Graeber can manage is to document in great detail how the “impersonal power of the market” has been advanced through violence.
But, why so successfully?
Throughout history, unsavory characters have attempted to violently disseminate countless vile ideologies. If impersonal markets are such a bad deal, why have so many people so readily been suckered into playing along? When dispassionate analysis runs out of steam, Graeber reverts to begging the question:
It is the secret scandal of capitalism that at no point has it been organized primarily around free labor. The conquest of the Americas began with mass enslavement, then gradually settled into various forms of debt peonage, African slavery, and “indentured service”…Needless to say, indentured servants were recruited largely from among people who were already debtors…
The serialized accounting of forced labor relations continues for the better part of another page. To be fair, Graeber does defend his historical claims rigorously. It is the framing of his arguments that is lacking.
Does the passage above truly describe a scandal of capitalism?
It should come as no surprise that the real world is more complex than the tidy thought experiments offered in textbooks. The same is true of all human institutions. Graeber elaborates further:
This is a scandal not just because the system occasionally goes haywire…but because it plays havoc with our most cherished assumptions about what capitalism really is – particularly, that, in its basic nature, capitalism has something to do with freedom.
This would be a sound point if not for the glaring absence of contextual subtlety. Obviously capitalism is not a system of pure unrestrained freedom. It would be naive to contend that a wage laborer is more free than a hunter-gatherer tribesman. But that would be the wrong comparison. We associate capitalism with freedom due its 20th century dialectical rivalry with communism – a system that was decidedly less free. In that context capitalism surely does have something to do with freedom.
Characteristically, Graeber overextends himself, further indulging in a tenuous analogy between wage labor and slavery:
There is, and has always been, a curious affinity between wage labor and slavery. This is not just because it was slaves on Caribbean sugar plantations who supplied the quick-energy products that powered much early wage laborers’ work; not just because most of the scientific management techniques applied in factories in the industrial revolution can be traced back to those sugar plantations; but also because both the relation between master and slave, and between employer and employee, are in principle impersonal: whether you’ve been sold or you’re [sic] simply rented yourself out, the moment money changes hands, who you are is supposed to be unimportant; all that’s important is that you are capable of understanding orders and doing what you’re told. (emphasis mine)
To the extent that Debt succeeds in conveying a consistent thesis, the highlighted section above captures it. In short:
Transactional = Impersonal = Violence = Slavery
As with the quotes cited earlier, it is unclear how this conclusion applies particularly to the institutions of capitalism. As populations grow, nearly all social institutions become more impersonal. Governance mechanism become more impersonal. Communities become more impersonal. Even families become more impersonal. All of the above are effects of scale, not effects of transactional market per se. I will acknowledge that capitalism has facilitated growth and scale. However, the arrow of causation points in many directions.
The Frustrating
Ultimately Debt fails to do justice to the complexity of the real world. Its conclusion perfectly exemplifies Graeber’s ability to confound the critical reader.
It seems to me that we are long overdue for some kind of Biblical-style Jubilee: one that would affect both international debt and consumer debt. It would be salutory not just because it would relieve so much genuine human suffering, but also because it would be our way of reminding ourselves that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements and that if democracy is to mean anything, it is the ability to all agree to arrange things in a different way.
Even the skeptic will be convinced “that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements“. Graeber’s scholarship is thorough, comprehensive, and persuasive.
Does that imply we can (should) whimsically “agree to arrange things in a different way“, whenever and however we choose? It does not…at least not in the form of top-down policy. As complex systems evolve they accrue increasingly entangled layers of dynamic interdependence. The record for wholesale engineering of such systems is not encouraging.
All told, Debt is a worthwhile read for anyone motivated to independently integrate the mountain of compelling scholarship Graeber offers. Despite the predominantly negative tone of this review, I will probably find myself referencing Debt from time to time in future posts. Unfortunately, as a self-contained commentary pertinent to current institutions it leaves a lot to be desired.
Acknowledgement: Thank you to William Tozer for generously providing a free copy in order to stimulate debate on this subject.
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