David Graeber (2011) Debt, The First 5,000 Years Melville House, New York; 544 pp.; eISBN 978-1-61219-098-3
Modern economics – and macroeconomics in particular – has degenerated into something akin to astrology. It is full of arcane, pseudo-scientific formulae and assumptions that squeeze the world into categories and patterns that resemble nothing we experience in our daily lives. Its ability to guide and predict social behaviour is laughably inaccurate unless you are a true believer. When a random guess turns out to be true, the seer is hailed as a genius, an oracle, and people are desperate to believe. It is both telling and of little surprise that many of the most perceptive insights into economic behaviour are now coming from other disciplines, especially psychology and anthropology.
David Graeber is an anthropologist and in this provocative book he dissects the notions of credit and debt, and how differing interpretations of these have driven the way people see each other and interact with each other. In the early chapters he looks at how debt has acquired moral overtones and underlines the different roles that credit has played in human societies. Economists have propagated the idea that before money we all engaged in forms of barter, but Graeber unpacks this myth and shows that it is not only illogical, but historically untrue. He explores a number of alternative theories about economic behaviour and in the process questions whether ‘an economy’ really exists.
Graeber sees our economic interactions as mingling three types of behaviour: communism (very much with a small ‘c’), exchange and hierarchy. At different times in history, the nexus between these behaviours varies quite dramatically. In a central argument of the book, he sees the rise of money and market exchanges in various epochs as inextricably linked to war, mobility and a loss of trust between people. In times of relative peace, settled existence and mutual trust, the use of money falls away and people shift to forms of communism and credit provision where money plays a limited role.
The idea of economic cycles is not new (NikolaiKondratiev still waves to us from the grave), but Graeber has taken a very long view of economic cycles and divides history since 3,500 BC into a number of ages: agrarian empires (3,500 – 800 BC), the axial age (800 BC – 600 AD), the Middle Ages (600 – 1450 AD), capitalist empires (1450 – 1971 AD), and the start of a new, unnamed cycle from 1971 (the death knell of the gold standard for currencies). As with all global theories, the use of evidence has to be selective and critics will no doubt be able to cite counter examples for many of the features that Graeber describes.
For me, the most interesting part of the theory proposed here is how our thinking about credit and debt are so closely linked to the myriad ways in which we interact with each other, the level of mutual trust that we display towards each other, and ultimately the degree to which we see our fellow human beings as human at all. Graeber argues that slavery only becomes possible when debt is understood in a particular way, part of which involves treating other people as if they are solely rational, self-seeking economic actors. Hmm, now where have I heard that assumption?
Graeber is pessimistic about the future of capitalism, but unlike economists he does not venture any predictions about how our economic relations will change over time, though he senses that the seeds of the new have already been planted. He sees the rapidly increasing use of surveillance, spin and violence on the part of modern states – their mania for control – as a last ditch attempt to prevent systemic change, but the tide of history is surely against them. How long that new tide will take to wash over us is anyone’s guess: Graeber’s cycles last an awfully long time.
You might not wholly agree with Graeber’s historical epochs or the way he characterises them, but his concepts of communism, exchange and hierarchy are helpful in looking at how we interact, and the different ways we interpret credit and debt over time show us that these relationships between people are not immutable. We certainly live in an age where we treat each other as less than human. You only have to look at ‘reality TV’ or conversations on Facebook (can I really have 1,628 ‘friends’?) to see how little we value others and the degree to which we are willing to degrade ourselves. Much of the human story told by Graeber is depressing and drenched in cruelty, but he also shows us that it isn’t always like that. Maybe there’s hope for us yet.