Saturday, May 31, 2014


Debt: the first 5000 years
David Graeber (2011, Melville House)

    “For thousands of years, the struggle between rich and poor has largely taken the form of conflicts between creditors and debtors–of arguments about the rights and wrongs of interest payments, debt peonage, amnesty, repossession, restitution, the sequestering of sheep, the seizing of vineyards, and the selling of debtors’s children into slavery.”

    All of these conflicts have their present-day incarnations, so it’s a little distressing that we know so little about their history. On economic matters, we may be able to think back thirty years, or seventy, or perhaps back two and a half centuries to Adam Smith’s inauguration of economics as a discipline. In Debt, the First 5000 Years, David Graeber suggests that even that would not be nearly enough perspective. The historical cycles involved have been going on as long as people have lived in cities. We also need to think about more than Economics alone: without a grounding of social and political history, economic theory tends to be both amoral and incoherent.

    What a delicious book Graeber has written to meet this need! It’s dense and chewy; there’s a page of bibliography for every ten pages of text (not counting the notes, which are also worth the price of admission.) He can focus on transactions too small to be repaid, like bumming a cigarette, as well as on historically epic ones like the transfer of the silver of Peru, by way of the Conquistadors, to the coffers of China, at a genocidal cost. He’s expansive on the Tiv tribe of Central Nigeria, whose debt and kinship arrangements make up a web of obligations and rights that are continuously rebalanced, yet with an awareness that money never really equals a life. If he’s a little more condensed on the Roman empire, Chinese peasant revolts, Islamic views of usury, Buddhism, and the Crusades, it’s because he flatteringly assumes that we have some acquaintance with them already, not because his own knowledge is any less.

    How many ways are there to become a slave? By kidnapping or  capture in war, as punishment for crime, by sale to repay one’s own or a parent’s debt. How do you turn a small-holder into a debt peon? Taxation, which requires him to borrow, if the tax must be paid in money. What’s the difference between peonage and slavery? The absence of a moral relationship between a master and a slave, because the slave has been torn from his or her human context.  These are questions almost more important than the answers, because we need to be able to recognize new forms these problems might take.

    Writing in the aftermath of the 2008 financial crisis, Graeber is particularly sharp  about the blinkered nature of standard economic theory; really, do you know any perfectly informed people, or any perfectly rational actors who aren’t psychopaths? What was Adam Smith’s agenda, anyway? He was a utopian, actually, and his model was imaginary, though parts of it have now been received wisdom so long that we don’t recognize the fact. “The problem with such models–at least, it always seems to happen when we model something called ‘the market’ –is that, once created, we have a tendency to treat them as objective realities, or even fall down before them and start worshipping them as gods.”

    The Market is a particularly pernicious false god, because, as Graeber puts it, “Any system that reduces the world to numbers can only be held in place by weapons, whether these are swords and clubs, or, nowadays, ‘smart bombs’ from unmanned drones.” One of the things we really need to do, if we grasp that infinite economic growth is impossible on a finite planet, is to remember that shared love and friendship are gifts beyond price.   

Email edition, June 1 2014

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