Debt: The First 5,000 Years, by David Graeber.
Here's one guy's excellent review. Seems like a VERY interesting take on where/why money came from.
This is a very interesting and important book. Graeber's writing style is engaging and provocative, enjoyable and fascinating.
Graeber has been accused as being overly political in his interpretation of history and anthropology. There is a warrant of truth to this accusation, but Graeber is dealing with highly political, and deeply moral, dilemmas which dominant history and have implications for contemporary circumstances, an apolitical book would be impossible (many philosophers of science (right and left), including myself, reject Hume's Law or the radical distinction between facts and values, really that is all Graeber has done).
At the same time Graeber is conducting anthropological science at its best and scholarship that is interesting to all human beings concerned with the distributional inequalities within the United States and between nations.
Below I attempt to divide the book into six major theses, in so doing it can be seen that the first five theses are historical and scientific, only the last is political. In other words, the politics and science can be logically separated.
Given Graeber politics should non-leftists read this book, Yes! Graeber's book is destined to become a classic text. Graeber has the spirit of F. A. Hayek, not politically, but rhetorically. Hayek's <<The Road to Serfdom>> (1944), is a highly political book (from the right) but with a very important major thesis, namely if the (philosophical) <<ends>> of intervention cannot be agreed upon, predatory politics will be the manifestation. Hayek's economics are impeccable, his social theory intriguing, his analysis of politics second to none, and his understanding of history impressive. If a leftist cannot learn from Hayek, and if a rightist cannot learn from Graeber, the impoverishment and the political bias is much more the reader, not the author.
What does one find in Graeber's book? The primary thesis can be identified as `the duality of debt' (my term not Graeber's). On the one hand debt has a type of ontological expression, i.e. debt is what binds us as a species, e.g. we are indebted to our parents, family, culture, society for our well-being and personal development, and more theologically an indebtedness to the Cosmos/God. This side of debt is found in its expression (i.e. language) and development. On the other hand debt has an historical existential tendency to be employed to enslave or create circumstances of debt peonage.
Graeber's interpretation of contemporary debt is that it has this "duality," it binds us socially (enabling many people to start a life) and has a tendency to (too often) put borrowers in a debt peonage relationship, not with the plantation owner, but with contemporary banks.
If the primary thesis can be expressed as "the duality of debt" there are several other major theses of considerable interest. I identify six major theses.
(1) Debt predates money
This is important for several reasons. I will mention three. First money does not emerge with markets, which means that markets and money can be differentiated and analyzed independently. Second, if money was not needed for market activity, this begs the question of why it was invented. Third, the social properties, i.e. non-market properties of money may be crucial to understand it as a phenomenon (actually this historical interpretation impressively compliments Post-Keynesian theories of money and the contradictions of its functions, which is not mentioned by Graeber); (this thesis is borrowed and developed from the anthropological work of Mauss and "definitive" work of Humphrey).
(2) Government construct national markets
Public intervention is the root of markets. Non-intervention, or laissez-faire is an historical oxymoron (this thesis is borrowed and developed from the work of Karl Polanyi).
(3) Primordial debt theory
The argument here is that debt is the basis of social-being. This is the ontological/theological side of debt (i.e. we owe our parents, etc.). Money is invented to quantify certain types of debt. Now the tricky part is that monetary policy and social policy are necessarily linked and cannot be differentiated (this thesis is borrowed and developed from Aglietta and Orlean).
(4) Military-coinage-slavery complex
Historically the emergence of coinage (i.e. money) is linked with military efforts, which in turn tend to manifest debt peonage situations and enslave. The most simple example is a monarch, in order to pay a traveling army, issues a token/coin and proclaims all subjects of the kingdom must return a said amount of these coins to the monarch. The only way to get these coins is from the soldiers by providing them with some provisions, the soldiers pay in coin, and the subject/agent gives the coin as a tax back to the monarch (this thesis is borrowed and developed from Ingram). What Graeber adds to this story is that it is quite common that the tax generates indebtedness, the indebtedness generates circumstances of debt peonage and enslavement (sometimes temporarily, sometimes for life). He also demonstrates this is not simply a European phenomenon, but global throughout history.
(5) Historical attitudes toward debt/World cycles.
Whereas the first four theses were borrowed from various theorists, that Graeber then helps to confirm from anthropological studies, which he then synthesize and develops, thesis five is quite unique to Graeber. His thesis is that attitudes toward debt not only change over time (he identifies four the Axial Age 800 BC - 600 AD, Middle Ages 600 - 1450, Capitalistic Age 1450 - 1971, Something Yet to Be Determined Age 1971 - future), but attitudes are also cyclical and global (Europe, China, India, Africa, etc.). Broadly Graeber argues that the Axial Age tended to emphasize the quantification of debt, whereby debt peonage and slavery from debt was common; the Middle Ages were a time when the primordial debt was emphasized, and debt peonage tended to be resisted; the Capitalistic Age is a return to the quantification and systems of slavery and debt peonage; in the SYBD Age we see a resistance toward debt peonage and the dominance, not of monarchs, but toward financiers and banks begin to slowly emerge. Whether the resistance will continue or a return to debt peonage (e.g. owing money to a bank for life) will continue or whether there may be some new institutional arrangement whereby the importance and dominance of financiers and banks is reduced is yet to be determined.
(6) History removes the veil of debt as road to servitude and peonage
The idea here is that when we witness different existential debt peonage throughout history, this helps to shift our own thinking on debt. Why is it we must borrow money from a bank to start our life? Although this aspect of Graeber's argument is not anthropology, it is a highly important implication from the scientific and historical investigations of debt. If the contemporary circumstances are not analogous to the past, why not? (Notice: it really is only here that Graeber is purely normative. But it is a normative question that must be asked. His answer makes it political. However, his anthropology and scholarship strongly supports his politics).
This is a very powerful book on several fronts. It is a very impressive synthesis of several different theories in economics, history, anthropology, literature and sociology (this part constitutes a very impressive scholarship) and develops a uniquely Graeberian interpretation and implication. I highly recommend it and predict it will become a classic in economic anthropology.
