Debt: The First 5,000 Years

David Graeber

Book cover

I really enjoyed reading this book, but it didn’t quite fulfill the promise I felt from the early stages of reading it. As the title suggests, the book takes a sweeping historical view of the idea of debt and, by extension, money. In this way, it reminded me of “Guns, Germs, and Steel.” Graeber’s style is more academic/intellectual than Diamond’s, but still accessible. I would feel comfortable recommending this book to people without an academic background in economics (or anthropology).

To my mind, the most interesting part of the book is Graeber’s systematic takedown of “the myth of barter.” This is the standard story told in all introductory economics classes to explain how money came to exist: it used to be that people traded goods for goods, but imagine how complicated it would be, double coincidence of wants, blah blah blah. Then people invented money as a common medium exchange to simplify things. Although this story sounds pretty tidy, it’s basically a complete fabrication (or, more charitably, a “thought experiment”). There is literally no record, either historically or from contemporary “primitive” societies, of a society that actually uses barter–the only exceptions being ones that prove the rule, namely, cases where people who are used to dealing with money are suddenly plunged into a situation where money doesn’t exist (e.g. WWII prisoners). In reality, non-monetized societies operate through some combination of communism (more on that in a minute) and loose credit-type transactions (understanding that a non-quantified obligation has been incurred).

Graeber says that all economic relations can be characterized into three basic categories: communism, hierarchy, or exchange. His use of “communism” here is non-standard, but sensible: any situation following the principle of “from each according to his ability, to each according to his need.” If you think about it, many if not most “economic” interactions operate this way; we’re just not used to thinking of them as economic. For example, if I ask you for directions and you tell me how to go, that is a “communist” economic transaction. Graeber emphasizes that in order to be workable, any economic system has to rest on some level of basic communism of this sort.

He discusses how the use of credit vs. the use of currency cycles throughout history in parallel with militaristic expansion and collapse. Although he doesn’t use this terminology, I believe he is basically making a Marxist argument about the economic base of a society determining the institutional superstructure.

Where I was most disappointed in the book was at the end, when he discussed the present day. Graeber is one of the original instigators of the Occupy Wall Street movement, and I feel a significant amount of sympathy for his positions. At the same time, I have been closely engaged with the economic crisis through my work. I often found myself feeling that Graeber was drawing unwarranted conclusions or using evidence in a misleading way. Perhaps I am too close to the situation to have an unbiased view. But I couldn’t help but feel that Graeber was overreaching by taking conclusions drawn on research over multi-century timescales and trying to apply it to something that has lasted all of four years so far.

Ultimately, I do think that this book has important things to say about the current crisis. I think its main value, for me at least, is to open wide the horizons of what we talk about when we talk about economics. Living in a capitalist and neoliberal society after the fall of Soviet communism and as China moves toward capitalism, it is easy to feel like the current economic system is the best, final, or only one (as Margaret Thatcher put it, TINA, there is no alternative). The broad scope of Graeber’s work suggests that this is a very premature conclusion, and that there are many ways of organizing economic activity that have worked in practice that are not necessarily familiar to us. (Here I will put in a plug for Peter Frase’s “Four Futures” in the current issue of Jacobin magazine, which I think is in a similar spirit but more forward-looking.) Like OWS itself, Graeber’s work indicates a general sense of possibility more than it delineates anything specific, but I do not count that as a failing in either case.

My Goodreads rating: 4 stars