Review: David Graeber, Debt: The First 5,000 Years

I think this has to be my Book of the Year for 2012. It is extraordinary in its scope, lively and original in its treatment, and displays an open-minded radicalism in the conclusions it draws or suggests. There is so much here that I never knew and so much that I had never before thought about.

The Library of Congress catalogues its subject matter as "1 Debt - History. 2. Money - History. 3 Financial Crises - History." The evidence is drawn world-wide from archaeology,  the founding texts of the world's religions, anthropology, the work of economic historians and much more. There must be a life-time's reading distilled here. Credit and money emerge in the context of social organisations and political and religious power - and violence. They take different forms as their context changes. The starting point is what Graeber calls "baseline Communism":

the understanding that, unless people consider themselves enemies, if the need is considered great enough, or the cost reasonable enough, the principle of 'from each according to his abilities, to each according to their needs' will be assumed to apply (page 98)

From this context, systems of credit emerge with most people most of the time creditors and debtors. The formalisation of such credit arrangements into calculable balance sheets takes different forms but pretty soon gets mixed up with organisations of power, which create more-or-less permanently indebted classes of people. Religious thought takes many of its metaphors from this world of credit and debt: debt and sin are closely linked and redemption is both the forgiveness of debt and the forgiveness of sin.

Money comes later and in non-friendly contexts: you need money to trade with people you don't trust and who don't trust you. It spreads when rulers discover that they can create coinage to pay soldiers who are then able to buy from people they don't know and who may have cause not to like them. They simply trade with them. Money does not emerge from previous barter systems - Graeber is scathing about the fairy stories told in Economics textbooks - nor does it replace credit systems. It's a qualitatively different phenomenon.

Graeber is fascinating on the early history and on the empires which developed in India and China and later in the Islamic Middle East, and on the empires in Latin America destroyed by the Spanish Conquistadors.

When it comes to later periods, his most insightful thinking is to distinguish sharply between free markets, both in goods and in labour, and capitalism. And his most challenging claim is that :

It is the secret scandal of capitalism that at no point has it been organized primarily around free labour. The conquest of the Americas began with mass enslavement, then gradually settled into various forms of debt peonage, African slavery and "indentured service" (page 350)

Much of the later discussion hints at ways we should think about recent financial crises - about Greek debt and about mortgage repossessions, which in the long perspective Graeber adopts are very much repetitions of  stories already repeated  many times in history. But unlike a Marxist (say Terry Eagleton) who would point at his Book and say, "See, see Marx was RIGHT!" Graeber is both more the scholar and more the open-minded (liberal, anarchist) thinker who is always more interested in digging deeper than in announcing a final Truth.

At various points reading this book, I thought how much a psychoanalyst or psychotherapist would enjoy it. Feelings of indebtedness, of irredeemable sin and guilt, are things which lead individuals to the therapist's consulting room. Here we have such feelings set in the largest possible historical context.

And now, of course, I feel indebted to David Graeber ...