Debt by David Graeber Summary
Everyone that’s taken an economics class has heard the story about how money was created: people used to barter with each other but it got really inefficient because what if I wanted to trade my shoes for bread, but the baker didn’t need any new shoes so money was created to form a medium of exchange.
Graeber, an anthropologist, provides convincing evidence that story is completely wrong. Money was created a way to more easily track something that pre-existed it: debt.
Debt, in fact, is the basis for society and the primary vehicle through which power is exercised.
Graeber re-examines the last five thousands of years of history starting from this new view of debt: from the Sumerian King who grants loans to the farmers in return for their obedience to the modern capitalist system which forces laborers into debt as a way of forcing them to serve the system.
There were lots of surprising insights in his book, not the least of which is the way Graeber shows even the most capitalistic society is communistic at its roots.
My Highly And Notes
Note: All the “Notes:” are my own additions and can be ignored if they don’t make sense. All bolding is mine, not the author’s.
in competitive markets, trust itself becomes a scarce commodity.
Freuchen tells how one day, after coming home hungry from an unsuccessful walrus-hunting expedition, he found one of the successful hunters dropping off several hundred pounds of meat. He thanked him. The man objected indignantly: “Up in our country we are human!” said the hunter. “And since we are human we help each other. We don’t like to hear anybody say thanks for that. What I get today you may get tomorrow. Up here we say that by gifts one makes slaves and by whips one makes dogs.” The last line is something of an anthropological classic, and similar statements about the refusal to calculate credits and debits can be found throughout the anthropological literature on egalitarian hunting societies. Rather than seeing himself as human because he could make economic calculations, the hunter insisted that being truly human meant refusing to make such calculations, refusing to measure or remember who had given what to whom, for the precise reason that doing so would inevitably create a world where we began “comparing power with power, measuring, calculating” and reducing each other to slaves or dogs through debt.
In the Bible, as in Mesopotamia, “freedom,” came to refer above all to release from the effects of debt.
there are three main moral principles on which economic relations can be founded, all of which occur in any human society, and which I will call communism, hierarchy, and exchange.
In fact, communism is the foundation of all human sociability. It is what makes society possible. There is always an assumption that anyone who is not an enemy can be expected to act on the principle of “from each according to their abilities,” at least to an extent: for example, if one needs to figure out how to get somewhere and the other knows the way. We so take this for granted, in fact, that the exceptions are themselves revealing. E.E. Evans-Pritchard, an anthropologist who in the 1920s carried out research among the Nuer, Nilotic pastoralists in southern Sudan, reports his discomfiture when he realized that someone had intentionally given him wrong directions: On one occasion I asked the way to a certain place and was deliberately deceived. I returned in chagrin to camp and asked the people why they had told me the wrong way. One of them replied, “You are a foreigner, why should we tell you the right way? Even if a Nuer who was a stranger asked us the way we would say to him, ‘You continue straight along that path,’ but we would not tell him that the path forked. Why should we tell him? But you are now a member of our camp and you are kind to our children, so we will tell you the right way in future.”
sharing is not simply about morality, but also about pleasure. Solitary pleasures will always exist, but for most human beings, the most pleasurable activities almost always involve sharing something: music, food, liquor, drugs, gossip, drama, beds. There is a certain communism of the senses at the root of most things we consider fun.
First, we are not really dealing with reciprocity here—or at best, only with reciprocity in the broadest sense. What is equal on both sides is the knowledge that the other person would do the same for you, not that they necessarily will. The Iroquois example brings home clearly what makes this possible: that such relations are based on a presumption of eternity. Society will always exist. Therefore, there will always be a north and a south side of the village. This is why no accounts need be taken. In a similar way, people tend to treat their mothers and best friends as if they will always exist, however well they know it isn’t true.
Notes: 1) good entrepreneurial communities are like this.
dealings with potentially hostile strangers should encourage an all-or-nothing logic, a tension preserved even in English in the etymology of the words “host,” “hostile,” “hostage,” and indeed “hospitality,” all of which are derived from the same Latin root.22 What I want to emphasize here is that all such gestures are simply exaggerated displays of that very “baseline communism” that I have already argued is the ground of all human social life.
Kings knew that the really important game was not economic, but one of status, and theirs was absolute.
in some of the more lawless parts of the former Soviet Union, gangs prey so systematically on travelers on trains and buses that they have developed the habit of giving each victim a little token to confirm that the bearer has already been robbed. Obviously, one step toward the creation of a state.
the logic of identity is, always and everywhere, entangled in the logic of hierarchy. It is only when certain people are placed above others, or where everyone is being ranked in relation to the king, or the high priest, or Founding Fathers, that one begins to speak of people bound by their essential nature: about fundamentally different kinds of human being. Ideologies of caste or race are just extreme examples. It happens whenever one group is seen as raising themselves above others, or placing themselves below others, in such a way that ordinary standards of fair dealing no longer apply. In fact, something like this happens in a small way even in our most intimate social relations. The moment we recognize someone as a different sort of person, either above or below us, then ordinary rules of reciprocity become modified or are set aside. If a friend is unusually generous once, we will likely wish to reciprocate. If she acts this way repeatedly, we conclude she is a generous person, and are hence less likely to reciprocate.
A debt, then, is just an exchange that has not been brought to completion.
money can be seen, in human economies, as first and foremost the acknowledgement of the existence of a debt that cannot be paid.
If there is any notion of “society” here—and it’s not clear that there is—society is our debts.
to make a human being an object of exchange, one woman equivalent to another, for example, requires first of all ripping her from her context; that is, tearing her away from that web of relations that makes her the unique conflux of relations that she is, and thus, into a generic value capable of being added and subtracted and used as a means to measure debt.
insofar as prostitution did occur (and remember, it could not have been nearly so impersonal, cold-cash a relation in a credit economy), Sumerian religious texts identify it as among the fundamental features of human civilization, a gift given by the gods at the dawn of time. Procreative sex was considered natural (after all, animals did it). Non-procreative sex, sex for pleasure, was divine.
Money, then, had passed from a measure of honor to a measure of everything that honor was not.
A warrior’s honor is his willingness to play a game on which he stakes everything. His grandeur is directly proportional to how far he can fall.
The critical thing, though, about such relations of patronage is that they involved responsibilities on both sides. A noble warrior and his humble client were assumed to be fundamentally different sorts of people, but both were also expected to take account of each other’s (fundamentally different) needs. Transforming patronage into debt relations—treating, say, an advance of seed corn as a loan, let alone an interest-bearing loan—changed all this. What’s more, it did so in two completely contradictory respects. On the one hand, a loan implies no ongoing responsibilities on the part of the creditor. On the other, as I have continually emphasized, a loan does assume a certain formal, legal equality between contractor and contractee. It assumes that they are, at least in some ways and on some level, fundamentally the same kind of person. This is certainly about the most ruthless and violent form of equality imaginable. But the fact that it was conceived as equality before the market made such arrangements even more difficult to endure.
On the other, a heavily armed itinerant soldier is the very definition of a poor credit risk.
Notes: 1) must use coinage during war b/c it’s likely your creditor will die
returned from a far-off land to be entirely honest about his adventures.
Notes: 1) profit sharing if there is trust. interest if not.
Over the next several thousand years, this same list—canceling the debts, destroying the records, reallocating the land—was to become the standard list of demands of peasant revolutionaries everywhere.
the word “rational” is telling: it derives, of course, from “ratio”—how many of X go into Y—a sort of mathematical calculation previously used mainly by architects and engineers, but which, with the rise of markets, everyone who didn’t want to get cheated at the marketplace had to learn how to do.
Axial Age spirituality, then, is built on a bedrock of materialism. This is its secret; one might almost say, the thing that has become invisible to us.
it’s quite possible to turn honor into money, almost impossible to convert money into honor.
Whereas Persian and Arab thinkers assumed that the market emerged as an extension of mutual aid, Christians never completely overcame the suspicion that commerce was really an extension of usury, a form of fraud only truly legitimate when directed against one’s mortal enemies. Debt was, indeed, sin—on the part of both parties to the transaction. Competition was essential to the nature of the market, but competition was (usually) nonviolent warfare.
This is important, since it lies at the very heart of our image of the Middle Ages—and the explanation, I think, is revealing. We have to recall that merchants had begun to achieve unprecedented social and even political power around this time, but that, in dramatic contrast to Islam, where a figure like Sindbad—the successful merchant adventurer—could serve as a fictional exemplar of the perfect life, merchants, unlike warriors, were never seen as paragons of much of anything.
Notes: 1) warriors not merchants were the most highly regarded in Christendom
Middle Ages were above all else the age of transcendence. The collapse of the ancient empires did not, for the most part, lead to the rise of new ones. Instead, once-subversive popular religious movements were catapulted into the status of dominant institutions. Slavery declined or disappeared, as did the overall level of violence. As trade picked up, so did the pace of technological innovation; greater peace brought greater possibilities not only for the movement of silks and spices, but also of people and ideas.
The very idea that human beings are motivated primarily by “self-interest,” then, was rooted in the profoundly Christian assumption that we are all incorrigible sinners; left to our own devices, we will not simply pursue a certain level of comfort and happiness and then stop to enjoy it; we will never cash in the chips, like Sindbad, let alone question why we need to buy chips to begin with.
There is, and has always been, a curious affinity between wage labor and slavery. This is not just because it was slaves on Caribbean sugar plantations who supplied the quick-energy products that powered much of early wage laborers’ work; not just because most of the scientific management techniques applied in factories in the industrial revolution can be traced back to those sugar plantations; but also because both the relation between master and slave, and between employer and employee, are in principle impersonal: whether you’ve been sold or you’re simply rented yourself out, the moment money changes hands, who you are is supposed to be unimportant; all that’s important is that you are capable of understanding orders and doing what you’re told.
Free your mind of the idea of deserving, of the idea of earning, and you will begin to be able to think. —Ursula K. Le Guin, The Dispossessed
Debt peonage continues to be the main principle of recruiting labor globally: either in the literal sense, in much of East Asia or Latin America, or in the subjective sense, whereby most of those working for wages or even salaries feel that they are doing so primarily to pay off interest-bearing loans.
Notes: 1) don’t take out loans!!!
the new dispensation, wages would no longer rise, but workers were encouraged to buy a piece of capitalism. Rather than euthanize the rentiers, everyone could now become rentiers—effectively, could grab a chunk of the profits created by their own increasingly dramatic rates of exploitation. The means were many and familiar. In the United States, there were 401(k) retirement accounts and an endless variety of other ways of encouraging ordinary citizens to play the market but at the same time, encouraging them to borrow.
Notes: 1) fascinating. He’s saying that people exploit themselves by taking out debt to invest in the same corprations that then own them.
Insofar as it was borrowed for what economists like to call discretionary spending, it was mainly to be 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 sheer survival.
Notes: 1) people are trying to continue to do what they have alwways done which is provide for their tribe but instead of that debt being communal it has become capitalistic and charged interest rates, reducing individuals to slaves (of markets).
Ultimately, it’s sociality itself that’s treated as abusive, criminal, demonic. To this, most ordinary Americans—including Black and Latino Americans, recent immigrants, and others who were formerly excluded from credit—have responded with a stubborn insistence on continuing to love one another. They continue to acquire houses for their families, liquor and sound systems for parties, gifts for friends; they even insist on continuing to hold weddings and funerals, regardless of whether this is likely to send them skirting default or bankruptcy—apparently figuring that, as long as everyone now has to remake themselves as miniature capitalists, why shouldn’t they be allowed to create money out of nothing too?
Last Updated on April 18, 2019 by RipplePop