David Graeber Debt: the first 5,000 years

In short – one of the best books I have read. Well written, intriguing, well researched, rich and colourful and important. Highly recommend.

Warning This is a long review, my future ones will be shorter, but I just found so much in this book to talk about, and I will keep coming back to this work in my research so I needed very thorough notes!

David Graebers book ‘Debt: the First 5,000 Years’ seeks to destroy or rather to deconstruct many common sense assumptions based on the myths of traditional economic thought including:

  • Where money comes from
  • How money functions
  • The role of debt
  • The scientific impartiality of economics
  • Human nature

Taking an anthropological, historical perspective, Graeber looks to understand how money and debt have actually functioned in real societies.

Graeber seeks to fill in the missing gaps in economic history and to make visible that which has been rendered invisible – e.g. the subjugation of women, the prominence of slavery and the violence of empire, and to explain why these exist and how they link with money and debt.

His first departure is to treat debt (and money) as fundamentally moral concepts – they are not one thing, what form they take is dependent on specific political constructs and to treat money and debt as pure, natural occurrences (as traditional economics does) obscures power, violence and injustice.

The crucial factor…is moneys capacity to turn morality into a matter of impersonal arithmetic, and by doing so, to justify things which would otherwise seem outrageous or obscene (p14)

He then goes on to attack “the great founding myth of the discipline of economics” (p25). In short, Adam Smith imagines a society a lot like our own but with money absent > in the market barter was difficult when you were trying to swap a sheep for a cow or a haircut or whatever > so we invented money > as precious metals were easier, we used them > then governments get involved to make sure the money is all the same size & weight (this is their only legitimate role).

Graeber points out that this view (otherwise known as the barter origin of money) “is so deeply established in common sense…that most people on earth couldn’t imagine any other way that money possibly could have came about” (p28). However, there is NO evidence for the orthodox explanation. Quoting Caroline Humprey:

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 there has never been such a thing (p29)

So, what is Graebers alternative theory of money? It is both barter between foreigners (not within local marketplaces as in the barter myth) and a system of trust. In history, he argues, it is money that actually brings markets into being, not the other way around. Markets were created by governments to provision their troops in war.

(The Government pays their soldiers in a coin (for example), then demands that the people have to pay taxes in that coin. In order to get their hands on the coin, the people have to find a way to give the soldiers whatever they need to make sure they get the coin, can pay their taxes and therefore not be punished by the government.)

This is where Graeber gets into the main thrust of his arguments about money and debt (which are related and intrinsically tied together). The history of money is a history of violence. The economic systems that we have are primarily created as a means to wage war and violence, that our major institutions are based on the logic of the slave trade.

However Graeber believes that the dominant economic market system has purposefully obscured the two other ways that we organise our daily lives, communism, i.e. from each according to our abilities to each according to our needs (this is really how we organise ourselves with our family, friends and community), and hierarchy where superiority and inferiority become custom (royalty, caste systems, etc). These systems co-exist with ‘exchange’ (self-interested, ‘rational’ bartering) in our everyday lives but we are not solely defined by purely self-interested exchange.

What Graeber is really asking throughout the book is “how did the logic of the rational self-interested individual become the dominant way that we see ourselves and that capitalism the only possible way that we can organise our economic life so we can see there is no alternative?”  In other words, how did we move from societies where is was held sacred that human life cannot be exchanged for anything else, to societies where human beings can not only be quantified and valued, but even bought and sold?

Cowrie Shells, used in human economies

Money was first used in what Graeber calls ‘human economies’ using ‘social currencies’ (primitive money, cowrie shells, etc) these were not used to buy ‘goods and services’ but to arrange human relationships, e.g. births, marriages, funerals and blood feuds. Key to these systems was that life cannot be paid for with objects – you cannot quantify the value of a human life with all his or her relations with other people, therefore you cannot exchange a human life with anything else.

What is interesting to Graeber is what happens when these human economies meet commercial market economies “the gears and mechanisms designed for the creation of human beings collapsed on themselves and became the means for their destruction” (p158). Thus it is only possible to turn a human being into an object of exchange by:

ripping her from her context; …from the web of relations…and thus into a generic value capable of being added and subtracted and used as a means to measure debt. (p158)

This requires violence (in war, captive enemies became slaves). Just because the violence is not necessarily as overt, it doesn’t mean that it does not still play a key structural role today. The strategy which is used, which is as old as civilisation, used by fascists, mafias and right-wing gangsters everywhere:

Unleash the criminal violence of an unlimited market, in which everything is for sale and the prove of life becomes extremely cheap; then step in, offering to restore a certain measure of order – though one which in its very harshness leaves all the most profitable aspects of the earlier chaos intact. The violence is preserved within the structure of the law. Such mafias too, almost invariably end up enforcing a strict code of honour in which morality becomes above all a matter of paying ones debts (p163)

Slavery is only the logical end point, the extreme example “if we are a debt society, it is only because the legacy of war, conquest, and slavery has never completely gone away” (p164).

An example of a campaign to end modern slavery

Although Graeber just shies away from out rightly calling all modern day relations slavery, he does point out that even our Western societies are arranged by debt-peonage, student debts for example rule at least half of our working life and it is still a common practice in the East and in third world countries.

The secret scandal of capitalism is that at no point has it been organised around free labour (p350)

This goes against our commonly held assumptions that capitalism has something to do with freedom, but actually it has been “built with millions of serfs, slaves and coolies”. Traditional economics try to pass these problems off with a ‘glitch’ and that todays human trafficked and debt-bondaged child labour, are somehow a ‘stage’ that third world countries have to go through. Graeber tries to show, and I think is successful that this is an inherent part of the system.

Our vision of capitalism is UTOPIAN, because we disregard the violence it has taken to build and maintain the system, to change our very concepts and understanding of humanity and the purpose of a good and happy life.

Even our language is tied to debt, and the violent history of it – bondage is literally the ropes and chains that bound debtors, and our concept of liberty which started as literally meaning to not be a slave and able to have relations with others (free – German root of friend), was changes around the 2nd Century AD by roman jurists to become essentially the same as private property (which was itself defined in relation to slavery) as the freedom to do what you want.

Our freedom is defined as a right, which we own, as opposed to Graebers view that rights are actually obligations on others (e.g. our right to free speech is actually others obligations to allow my free speech). Rights have been defined in this way to justify debt-peonage or even slavery – if we own our rights, like property, then we are free to give them away or even sell them (p206).

Are we all slaves to greed?

Are we all slaves to greed?

Graeber fundamentally disagrees with the logic of economic thought that humans are inherently self-interested, selfish, rational individuals. Orthodox economics states that as human nature is like this, we have built systems which reflect greed and individualism. Graeber’s opens up space to think that it could actually be the other way around, we have created structures which turns human nature into greed and individualism.

It is a structure designed to eliminate all moral imperatives but profit (p320)

What is clear from Graeber’s work is that it gives us an entirely new lens to see contemporary problems through and challenges us to ask ‘how much has really changed?’ It brings to mind that fact that once-colonial states are largely stuck in the same patterns of production that they were in colonial days. Slavery by any other name. Graeber is clear about the role of international institutions under US patronage and US military might as the main things keeping the world monetary system (in dollars) together.

Our violence has been institutionalised in the pattern that Graeber described, which has to some extent hidden or justified it, which could be illustrated in the majority of people (outside of academic & development fields) really knowing what the IMF or World Bank is or does. Also, Guantanamo bay, they were only able to do that to another human being because they were ripped from their contexts and placed in orange suits – they were no longer people, but terrorists.

For my work, the overall context that Graeber sets the whole capitalist system in is important as a contrast to the dominant economic paradigm. Taking a historical view on a system which is so short-termist certainly yields insights, and making explicit previously hidden assumptions thought to be natural and common sense is crucial in understanding the true nature of the debates.

Specifically his work talks a great deal about the debates on usury and the morality and practicality of charging interest – this seems to have been a dominant political problem in history within the states that allow it. Graeber alludes to the majority of social unrest being due to debt and movements calling for the cancelling of debts, the freeing of debt peons and the reallocation of lands, have brought down or threatened to bring down governments. (Did you know that the famous Rosetta stone is actually announcing a large scale debt jubilee in Egypt?!)

What is equally interesting is his coverage of the rise of Islamic finance, which was the first free-market ideology that our current system is based on, except the moral and social framework is different. In the Islamic system, the market was totally free from the state, trust and honour were principal and usury was completely banned. Today the market is enforced by the state, violence is accessible to back up creditors rather than protect debtors, and usury is rampant.

Graebers explanation of the origins of banking as based on government debt is clearly relevant today with the focus on deficit reduction, and this will obviously be something I will be exploring further in my reading.

I can’t recommend this book more if you are interested in money, politics, war, terrorism, social movements, feminism, history, anthropology, ethnography, or if you are just generally interested. 🙂


6 thoughts on “David Graeber Debt: the first 5,000 years

    • Thanks for the comments and the link – I’ve been recommended Adam Curtis by a few people and I will try and get round to it this week!



    • Hi Jehu,

      Thanks for your question. I’m not sure what Graeber’s response would be but I think that there are two ways you could look at this:

      1. Agriculture, whilst clearly an important feature of our economic systems isn’t an institution in the way that Graeber is talking about. He means the organisations and social structures set up in order to produce certain types of behaviours/morality.

      Definition from the Oxford English Dictionary

      Definition of institution
      1. an organization founded for a religious, educational, professional, or social purpose: an academic institution, a certificate from a professional institution, an organization providing residential care for people with special needs: about 5 per cent of elderly people live in institutions
      an established official organization having an important role in a society, such as the Church or parliament: the institutions of democratic government
      a large company or other organization involved in financial trading: City institutions

      2. an established law or practice: the institution of marriage
      informal a well-established and familiar person or custom: he soon became something of a national institution

      3. [mass noun] the action of instituting something

      2. Also remember that the business of agriculture has been tied up in violence for large periods in history, slavery, colonial plantations, feudal system, etc. I think the point Graeber is making is that when social economies meet capitalist or market economies, violence would enter.

      So for example when a village, mostly self-sufficient for food, gets taken over by the local warlord/lord/king their land and its produce is no longer their own.

      Does that help? Or do you think differently? Perhaps reading Graeber with that question in mind might provide a stronger answer for you.



  1. Pingback: More on Graeber’s Debt: The First 5,000 years | idiolect

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