graeber book forum: part 1

Department store clerks hate me. When I buy something, they try to sign me up for a credit card and I refuse. If they press, I get difficult. Press too much and I snap: “No! Credit cards are the work of the devil!!!” The clerks are speechless. For years, I thought I was alone in my religious hatred of debt … but there is another  …


This semester’s book forum is dedicated to “Debt – the First 5,000 Years” by David Graeber. If you follow social theory, you may know Graeber as the author of Fragments of an Anarchist Anthropology. He’s also an outstanding anthropologist, having written the highly lauded Toward an Anthropological Theory of Value. He’s also recently drawn attention as an inspiration and organization for many Occupy events.

Debt is Graeber’s latest book. I think it is to be taken seriously because it offers a number of claims that are very important to consider. This will post will lay them out:

1. Exchange is carried out in non-industrial societies in terms of a debt economy. Barter does not exist in most social situations.

2. Therefore, the classical economic explanation of the origins of money is wrong. This is not merely a mistake of intellectual history, it undermines much of the foundations of neo-classical economics.

3. In fact, debt comes first and then money is used to formalize debt. It is not the case that money precedes credit.

4. Debt is used as a mechanism of social control.

5. Societies have debt/credit cycles that lead to severe social economic crises, which often result in catastrophic resolutions.

As you can see, this book is ambitious. It is nothing less than an attempt to completely undermine the traditional view of credit and debt as normal and functional features of the market economy. Over the next few weeks, we’ll get into these arguments in some detail.

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Written by fabiorojas

December 6, 2011 at 12:02 am

Posted in books, fabio, just theory

8 Responses

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  1. I’m looking forward to this. My own way into this issue is through the social credit thinking of the 1920s and 30s. In particular, it’s connection to the poetry of Ezra Pound. But that was a very right-wing critique of the debt-based monetary system, a critique that continues today in libertarian circles, and which is expressed in the policy proposals of people like, most notably perhaps, Ron Paul. This anarchist version of the argument gets me thinking about Norman Mailer’s call for a “hip coalition of the left and right” in the 1960s. The debt-based economy lives in the “pusillanimous sludge of liberal and conservative bankruptcies”. “Do not hold to that center, Jack,” he wrote to JFK in 1961.



    December 6, 2011 at 8:18 am

  2. Great book review choice. I recently read excerpts of the book and I am highly interested. I am looking forward to the discussion


    orgtheory reader

    December 6, 2011 at 4:48 pm

  3. Don’t points 1-3 conflict with “an attempt to completely undermine the traditional view of credit and debt as normal and functional features of the market economy”? If debt were something like a synthetic CDO, we might more easily regard it as something we could just do without. But if it’s the foundation of economies since the beginning of recorded history, fat chance “écrasez l’infâme”.


    Wonks Anonymous

    December 6, 2011 at 5:33 pm

  4. Must say I have really enjoyed this book so far. Even if the only thing one takes from it is the empirical observation that there have been no observed cases of an intra-society barter –> monetary trade transition, then this is enough to warrant reading at least the first section of the book. According to Graeber, barter is found in practice to be either a transient, hostile exchange between two foreign tribes, or a temporary situation in which a monetary system had been in place but collapsed. Observed primitive economies rely on gift exchange or centralized distribution in which trade is tied to mutual obligation between people within a society. As Fabio points out, money is observed to be a tool to formalize debt so that it can be transfered between lenders, with the consequence being that debt is no longer attached to specific or enduring interpersonal relationships. Graeber argues that the barter –> monetary trade transition is a creation myth taught in Econ 101 that is unobserved in human history, and results from a complete neglect of the anthropological literature on the matter. Sociologists are not immune from this illusion either (see Simmel, who is still a popular read on this matter). So far, I did not see any original research, but it is a great literature review on the subject that seems to connect dots that have not been recognized in such an explicit manner before. Look forward to reading more reactions on this.



    December 6, 2011 at 5:47 pm

  5. As a numismatist and advocate for the Austrian school of free market economics, I find David Graeber’s work fascinating. Von Mises, Hayek, and Rothbard were largely ignorant of numismaitcs, hence of the history, art, and science of the moneys in which they invested so much emotion and thought.

    The works of numismatists Charles Opitz and Robert Leonard on primitive money substantiate at least the broad outlines of Graeber’s conjecture. Underlying that, however, is the deeper understanding of “debt.” It begins as a social obligation: not the transfer of “stuff” but the acknowledgement of status and relationship. From that grows ritual gift exchange.

    We skate on thin ice when we examine “primitive” people, even by reading the reports of “early” explorers. From your grandparent to your grandchild is five generations. Any longer period may be “forever.” Assimilation of neighbors, displacement by foes or weather, and the occasional brilliant idea are among the many factors that can be lost to time. Europeans met people and think they always lived here, spoke this language, ate these foods, married in or married out. We don’t know.

    We do know that wampum was invented by Hiawatha to ameliorate conflicts in order to rally the local tribes against the French and English invaders. From that, we draw inferences. As noted by Wonks Anonymous above, it is important to remain objective by rejecting (or at least marginalizing) the internal contradictions of a broad claim. It seems at first now that Graeber wants to assert an Eden myth of a better world before the Serpent of Debt.

    However, as proved by the research of Denise Schmandt-Besserat, debt led to writing by way of numeracy: inventories precede the Gilgamesh by thousands of years. We may be no more trapped and enslaved by debt than we are by literature, central heat, and the Hubble Telescope. If greed is good, then debt may be better.


    Michael E, Marotta

    December 6, 2011 at 7:05 pm

  6. Graeber makes a splash in the Chronicle of Higher Education. See especially his interventions in the Commentary section of the story.



    April 22, 2013 at 4:05 pm

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