Monday, September 19, 2011

Graeber's Debt

I've just now put down (“finished” might be a bit strong) David Graeber's Debt: the First 5,000 Years . I find myself remembering what Harold Demsetz used to (maybe still does) say of John Kenneth Galbraith: he said "I can't find a testable hypothesis."  Same thing here. This is a highly entertaining read, brimming with ideas—or at least anecdotes that suggest ideas. It's easy enough to get a general notion of what he is up to but you'll play the very devil trying to figure out exactly what it is he is trying to say.

Graeber does have one worthwhile core point that he believes underlies much what he says. In a nutshell, we were born with a sense of obligation; debt emerges from the primordial ooze. All our sense what we owe to others begins there; it may ramify and permutate in a thousand ways but we all emerge from under the same. This is a fascinating and provocative idea, surely wrong in particular but no matter, still worth trying to clarify and understand.

A second fundamental idea is trickier. That is: Graeber seems to be trying to distinguish an older, more humane (?) form of obligation from a harder, more impersonal variety that we might call, for lack of a better name “economic.” This too is an interesting and provocative idea though at this point it is hardly a new one. Indeed, Graeber here seems to be flirting with a modern anthropology that is perhaps as old as Hesiod or Rousseau, if not Marx, saying nothing of so much of 19th and 20th Century anthropology—postulating a “primitive” past which can clarify our understanding and also provide a stage for criticism of the present.

The fact that this sort of thing has been tried before without success is no reason to try it again, but here is where Graeber gets maddeningly slippery. He makes much turn, for example on occasion of creation of coinage—an event that seems to occur simultaneously in various places around the world at, give or take, around 600 BC. Here we encounter, it seems, a new device for imposing state power: impose coins, use coins to collect taxes, uses taxes to build military might, all at the expense—the impoverishment—of “the poor,” particularly the peasants.

This is surely a plausible account of some events in some places at some times but it is far from clear how it fits into the larger story. For example, is he saying that state power creates coinage, or that coinage creates state power? If the former, of course we would like to know what does create state power. If the latter, it might be useful to spell out just how the new “coining empires”differ from other occurrences of human oppression—going back to, say, the rise of an agricultural surplus around, perhaps, 3000 BC. The very fact of an agricultural surplus yields priests, clerks, warriors and slaves, not so? Are we to believe that there is something about these earlier forms that are necessarily more humane than we get in the “coinage empires?”

I'd grant that Graeber's story seems most plausible—and he himself seems most energized—when he is talking about polities that impose themselves on weaker and less sophisticated neighbors—what he seems to have observed in brutally clear form in Madagascar under the French. But this isn''' the only form of debtor-commerce. Yet curiously, Graeber says little or nothing about “ordinary” or “every day” commerce. Indeed at one point he tries to show how a particular kind of exchange-counter is used not in the m market-place, but precisely for non-market transactions—marriage alliances, for example, or compensation for injury. He dismisses the market place, with seeming irony, as women's work. Yes, well, fine, but what is going on the market place? What is this woman's work, and how has it been carried out for all these thousands of years? It's an odd exclusion for a book with so vast a claim to coverage. Yet it's the kind of thing you come to expect from this stimulating, suggestive, yet ultimately exasperating, book.

And by the way, no, I do not repent of what I said the other day.


marcel said...

I finished the book about a week ago, and have a similar feeling, that there is too much going on for me to be confident of what to come away with. I'm an economist, and would like a simpler version of the story. I plan to go back through the book soon to try to work out a stripped down version. What I have so far, based just on my first reading of the book is the following.

1) The theme is an alternative explanation of the origin of money from the one you find in Adam Smith or any intro econ text.

2) "Primitive" societies typically have a web of debts/credits that are part of the glue holding them together.

3) When spot exchange occurs in these societies, that is exchange of one thing right now for another thing right now, it is often masking, barely, violent aggression. Presumably this is because an important part of spot exchange is lack of trust between the parties (perhaps because there is no expectation of seeing each other again).

4) The web of debts & credits in (2) are kept track of in a rough and ready sort of way, so that a cup of sugar is not necessarily repaid with a cup of sugar, but with something that everyone agrees is of roughly equal value.

5) There's a lot of material of interest to anthropologists about various kinds of debts related to marriage, war and so on that are not of immediate interest to an economist, so I'll ignore it.

6) At some point, society developed from the "primitive" stage to the urban civilizations of Mesopotamia (and presumably India, China, Egypt and the Americas) centered around large temple complexes. Now people had debts to the gods, which they paid off by bringing goods of one sort or another to the local temple. The temples kept much more careful and exact accounts of who owed how much to which god, etc.

6a) At this point, we have unit of account money but not medium of exchange money. Money as a unit of account, like a foot or a minute, exists, but not something tangible that changes hands in each exchange in the opposite direction as the (other) item that is the object of the exchange.

7) About 2000 years later (in the middle east, anyway, or the near west as Graeber calls it), not only were these temples looted by invading armies, but the kings who raised them had to both feed the soldiers during campaigns and pay them off. Someone had the bright idea that if they (a) coined the precious metals looted from the temples, (b) gave some to the soldiers as pay, and (c) insisted that their subjects use the coins to pay their taxes, large scale markets would develop that would feed their soldiers.

8) At this point, barter exists only in (3) above, and in long distance trade between different societies. In the first, it is almost accidental, and prices need to be negotiated over and over. In the second, prices are stable for long periods of time because no one will engage in long distance trade without being fairly certain in advance about what they will realize (if everything goes well). In each case, the prices are relative prices of the sort, 1 flintlock for a dozen beaver pelts.

9) Medium of exchange money exists at this point, but is not widely used except for taxes (hardly a medium of exchange if you think about it), and as an alternative method for soldiers to acquire goods other than just taking them.

10) When ancient societies become flooded with slaves as a result of wars and captives, markets for them develop, the medium of exchange is used in their purchase and pretty quickly it becomes used in the exchange of all other goods. Now medium of exchange money, as we know it (or certainly as we knew it before the widespread use of credit cards and the abandonment of the gold standard) exists.

(Continued below because blogger won't otherwise accept my commentary -- too long. I know, I know, I should get my own blog, but I won't).

marcel said...


11) The next few chapters are better documented history, tracking the alternation over time between money purely as a unit of account and its use as a medium of exchange.

12) The final chapter (2 chapters?) is a call to arms to get rid of money and create a better, more humane society. It detracts from the rest of the book as a work of scholarship, and like many manifestos, there is a whiff of the underpants gnomes' business plan.

Anyway, this is what I have been able to reconstruct from memory, but as I said, a 2nd reading is in order to be sure of this and nail down details.

chaklytalor said...

The next few capacity are bigger accurate history, tracking the alternation over time amid money absolutely as a assemblage of annual and its use as a average of exchange.

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