Debt: The First 5,000 Years

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In his Afterword to Debt: The First 5,000 Years, David Graeber says he wanted to write “a big, sprawling, scholarly book” of the kind people didn’t write anymore. [393] From a background in anthropology and ethnology, Graeber felt he had an advantage entering territory more typically covered by historians and economists. He was neither beholden to the predetermined models of the economist nor the “resolute” empiricism of the historian. He also had inspiration from a little known giant in his field, Marcel Mauss.

Mauss, Graeber says, was the first to explode the myth of barter that plagued the economics field at the time–and even up to Graeber’s. (Mauss may have been a brilliant thinker, but he was disorganized and a poor publicist. He never published his manuscript.) Accordingly, Graeber starts his book, chapter 1, with “The Myth of Barter.” He systematically lays out the critique, but allows Caroline Humphrey to make the closing argument for him: “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there has never been such a thing.” [29] Graeber goes farther. Not only did barter not precede monetary economy, it almost certainly followed it. Empirical analysis shows that virtual money, with its variety of credit systems, millennia before Visa, came first. Hard currency came “only much later, unevenly, never completely replacing credit.” [41]Only after coinage could barter systems arise, “an accidental byproduct of coinage and paper money, among people already used to cash transactions,” such as in 1990s Russia following the collapse of the Soviet Union.


Mauss was also, Graeber says, the “first to recognize that all societies are a jumble of contradictory principles.” [395] They are not always what they say they are or seem to be. They are more or less full of contradictions and resist simplification. Armed with this insight, Graeber perceives patterns and inconsistencies others overlook; he packs his “big, sprawling” history with startling revelations and provocative analyses.

Here’s one: Communism “is something that exists right now–that exists to some degree, in any human society, although there has never been one in which everything has been organized that way, and it is difficult to imagine how there could be. All of us act like communists a good deal of the time.” [95]

Stated the other way around, we do not always (or even usually?) act like the rational, self-interested creatures of the classical economic model. We give to each according to what we see as his needs; we expect from each according to what we perceive to be her abilities. Graeber is intent on breaking the term from the more politically charged definition we inherited from the likes of Marx and the Soviet Union. He sees complexity–“a jumble of contradictory principles”–in human social arrangements, and he spends much of his book steering our attention to it. “We are all communists with our closest friends, and feudal lords when dealing with small children. It is very hard to imagine a society where this would not be true.” [114]

Here’s another: “Formal slavery has been eliminated, but (as anyone who works from nine to five can testify) the idea that you can alienate your liberty, at least temporarily, endures. …The violence is pushed out of sight. But this is largely because we’re no longer able to imagine what a world based on social arrangements that did not require the continual threat of tasers and surveillance cameras would even look like.” [210]

The violence Graeber refers to is that of the chain and the whip. Through careful yet wide-ranging discussion of the ancient historical record, Graeber makes clear the historical connection between debt and slavery, a global phenomenon that long predated New World sugar/indigo/tobacco/cotton plantations. Yet, he argues forcefully that slavery is not a precondition for some sort of economic evolution toward higher form, viz., capitalism. Graeber culls the archaeological record for examples of cashless economies built on social currencies. In these societies, typically, all citizens are both borrowers and lenders. With the arrival of monetized economies, suddenly we get harder lines between debtors and creditors. Only then do we get men selling wives/daughters/sons to pay off what in the end can never be paid. Only then do we get creditors coming for the debtor himself and making him what he always was: a slave.


The Axial Age (which Karl Jaspers defined as covering the years 800 to 300 BCE and which Graeber extends  to 800 CE) saw the rise of empires in the Mediterranean, China, and India. These empires required armies to extend themselves and money to pay for armies. (Free citizens made better soldiers. Paying thousands of itinerant warriors in oxen, say, was impractical.) In a vicious circularity, empires needed conquest to pay off debts which only grew as a result of its operations of conquest. In the end, military expansion could only delay the inevitable: default (an observation that cuts a little too close to home).

The Middle Ages,  another global phenomenon in Graeber’s telling, saw the retreat of hard currency along with the decline of empire. Credit economies revived, and slavery waned. The rise of capitalist empires in the fifteenth century brought the return of both coinage and slavery, both entwined in European expansion into the Americas.

Capitalism and empire have flourished into modern times, yet slavery has not. How does Graeber account for this? He points out that while the most brutal forms of slavery have been outlawed, many of its essential features continue. Think of college graduates who spend half (or more) of their working lives paying off student loans, a modern form of debt peonage. Think of the working classes who, if they don’t actually sell their freedom, can be said to rent it when they “spend [most of] their waking hours working at someone else’s orders.” [354]

The link between debt and slavery is made explicit in Graeber’s book. Debt gets its sinister fingers into all aspects of our economic and moral lives, making all of us, debtor and creditor alike, less free as a result.

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Capitalism is the world-historical engine driving the empire-debt-slavery nexus, and, as such, comes under close scrutiny in Graeber’s analysis. Exhibit A: the case of Hernan Cortés. Before he was a conquistador, Cortés was a debtor, a dandy living beyond his means. The contemporary diarist, Bernal Diaz del Castillo, described him wearing “a plume of feathers, with a medallion, and a gold chain, and a velvet cloak trimmed with loops of gold.” [316?] Debt drove Cortés to Tenochtitlán in search of plunder to maintain his lifestyle. Leading perhaps the most lucrative military heist in history, Cortés, we learn, had the audacity to charge his men for weapons damaged in the assault and for the medical care they required when wounded in his service.

So it was that the conquistador passed on his own debt to his underlings, who, in turn, took out their resentment on the local populace. Only when we consider this fact, Graeber says, does the sadism of the rank-and-file conquistadors become intelligible. As Graeber says, debt gives the debtor “the frantic urgency of having to convert everything around [him]self into money, and rage and indignation at having been reduced to the sort of person who would do so.” [325] Here he is not just speaking of sixteenth century conquistadors. He is addressing the rest of us in the post-industrial West.

Graeber turns his pique on classical economics, as well, a field, he says, that deems it “perfectly natural to assume that, if the price of silver in China is twice what it is in Seville, and the inhabitants of Seville are capable of getting their hands on large quantities of silver and transporting it to China, the clearly they will, even if doing so requires the destruction of entire civilizations. Or if there is a demand for sugar in England, and enslaving millions is the easiest way to acquire labor to produce it, then it is inevitable that some will enslave them.” [314] There are alternatives, examples of which Graeber patiently enumerates in his book.

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He critiques Adam Smith taking a similarly empirical tack. “It’s not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner,” [335] Smith famously intoned. But Graeber insists that, at the time of their publication, those words were pure fiction. “Most English shopkeepers were still carrying out the main part of their business on credit, which meant that customers appealed to their benevolence all the time.” Empiricism and realism matter to Graeber, and he wants them to matter to us, too. Smith, he avers, was merely describing an ideal vision, “an imaginary world almost entirely free of debt and credit, and therefore free of guilt and sin.” This purified vision has infected our thinking ever since, with pernicious effect, in Graeber’s view.

Over the next two hundred years, powerful men both spouted his ideas and worked to turn his idealized vision into reality. However, they could not keep sin and debt from infecting that reality. They spread, and, according to Graeber, “began to take a profound hold” on those who were able to elevate themselves above penury. These so-called ‘respectable’ working classes internalized the attitudes of their (former?) oppressors. They “often took freedom from the clutches of the pawnbroker and loan shark as a point of pride.” [354]

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Thus, as a society, we (almost) uniformly condemn debt while at the same time are (almost) all, in fact, debtors. Graeber cites the statistic that the average household debt in 2010 was 130% of income. That statistic sends most of us shaking our heads and clucking our tongues, inciting moral revulsion to rise in our chests. But Graeber’s entire project is to have us question these reactions and the assumptions that cause them. He says, trenchantly, that “very little of this debt was accrued by those determined to find money to bet on horses or toss away on fripperies.” He then allows his own assumptions step to the fore: “Insofar as it was borrowed for what economists like to call discretionary spending, it was mainly given to children, to share with friends, or otherwise to be able to build and maintain relations with other human beings that are based on something other than sheer material calculation. One must go into debt to achieve a life that goes in any way beyond mere survival.” [379]

A book that began as wide-ranging and scholarly becomes more pointed and political by the final fifty pages. Also more personal. Graeber is not afraid to reveal his own motivations for his inquiry and its resulting radicalism. As the son of a working class family, he says, “I can attest to the degree that, for those who spend most of their waking hours working at someone else’s orders, the ability to pull out a wallet full of banknotes that are unconditionally one’s own can be a compelling form of freedom.” [354]

After building his case against the pernicious effects of debt, Graeber ends by turning his focus on debt’s opposite: freedom. To the extent that debt “reduce[s] us all, despite ourselves, to the equivalent of pillagers, eyeing the world simply for what can be turned into money,” [389] to the extent it renders failed or reluctant pillagers to the status of “undeserving poor,” it undermines human relationships and human freedom. Graeber reminds us debt, for a large swath of the population, “is simply a matter of survival” and, he says, reaching his peroration, “it is useful to point out that for real human beings survival is rarely enough. Nor should it be.” [380] Radically, Graeber proposes we stop making money our highest value and turn it back on human sociality. For, “what else are we,” he asks, “except the sum of the relationships we have with others”? [387]

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