[Published in the ASA section newsletter Altruism, Morality, and Social Solidarity Forum, 4 (1): 25-26 in 2013.]
Graeber, David. 2011. Debt: The First 5,000 Years. New York: Melville House Press.
Typically, “debt” is only viewed as an economic phenomenon, with very simple rules and principles: when someone owes another person something, then this debt is as official and non-negotiable as a contract. David Graeber dismantles this myopic conceptualization of debt via an expansive analysis of many millennia of human history. He finds that “debt” is not as simple or clear as most people assume. The most immediate observation readers will be struck by is that the etymology of many words are linked to the social concept of debt, including: honor, sin, guilt, forgiveness, reckoning, redemption, freedom, credit, and interest. It is helpful to know that the background of these words derive from centuries-old debates about debt or that their histories intersected with debt debates at some point in time.
According to Graeber, “debt” is a social obligation we hold to each other. Although debt is often considered only in monetary terms (“How much money do we owe someone for that product or service?”), it is much broader, and refers to all the ways in which we find ourselves obligated to each other (economically or otherwise). Since debt is ultimately about our social relationships, debt is therefore a social construction. The answer to the question “What do we actually owe to each other?” is never quite certain, since debt is socially-arbitrated and can, thus, be re-negotiated. Graeber goes to great lengths to demonstrate—philosophically as well as through copious anthropological evidence—that most people actually want to be in debt to each other. People enjoy doing things for each other, both feeling gracious for giving (and thus incurring other debt) as well as receiving gifts from each other (and landing in each other’s debt). Even though free-market economic theory pretends humans do not like this, the truth is that most of us actually seek out debt, because we enjoy the social relationships that come with exchange.
Much of Graeber’s Debt is focused on the oscillations between credit and money, which define general periods in human history over the last five-thousand years. Despite the popular assumption that pre-money economies operated on principles of barter (two parties exchanging things of equal value or desire), Graeber argues this is an unsubstantiated myth and that no society has ever been discovered which has operated strictly on the basis of barter. The reasons are self-evident, according to Graeber: squaring and settling one's debts indicates a lack of desire to continue associating with others (“Okay, we both have what we want, so this transaction and our relationship is completed”). Thus, if direct, bartered exchange happens it usually indicates that the people involved lacked faith in each other or are strangers, and they do not expect or wish to see the other person again. In other words, an “even trade” often indicates a lack of trust or that we are unsure of our ability to get what we are owed from that person in the future. Consequently, it is also usually uncouth, even offensive, to keep track of what friends and neighbors owe each other. This is clear in close, intimate relationships: friends or lovers who always demand an immediate, equal trade of kindness, pleasantries, or favors—and who keep track of any debt the other party has—are likely to be characterized as pathological.
Another reason why no economy has ever been based wholly upon barter is that it is generally impractical: what are the chances that two people have exactly what each other need? Instead, a loose system of “credit” is more practical; we approximate our general indebtedness to each other (at least in less-intimate relations) and we know that we can rely on the other party to help out when there is the need. A system of credit (accounting either goods or services) also mandates that we stay in each other’s debt, thereby ensuring constant interaction and sociality. This is one of Graeber’s most compelling arguments: human sociability (and, even solidarity) is premised on debt (i.e. social obligation).
Graeber dedicates a sizable portion of Debt to discussing the epochal fluctuations between credit and money, starting during the early Agrarian period, then the Axial age (sometimes called the classic age), the medieval era, the industrial age, and finally the period following Nixon's decision in 1971 to detach the US from the gold-standard. During each period, the general human relationship to debt changed. Graeber argues that money, slavery, markets, and states arise alongside each other during the Axial age, in what he calls the military-coinage-slavery complex. Most of these phenomena disappear during the medieval period, shrink, or go into latency. Yet, the industrial age rekindles them again. For example, slavery (by definition, the consequence of a debt that cannot be paid back) makes a comeback and war begins, once again, to predominate relations between large, centralizing states, all of whom resume the use of coin money.
The present-day political ramifications of Debt could scarcely be clearer: debt is not only important to economies but is also fundamental to human relationships. To eliminate all debt—such as what Right-wing forces seek for the US federal government (as in the 2011 “debt ceiling” debate in the Congress)—is not merely preposterous, but would represent a deathblow to social relations. Contrary to popularly-incanted mantras, debt is not universally bad, nor is it something to avoid at all costs. A deeper question emerges for Graeber: why do we “have to” pay back our loans, especially for those debts that are created by unethical, hierarchical practices (e.g. International Monetary Fund-created debt for poor countries, decade-long crippling student loans, or predatory home loans that end in foreclosure)? Those who hold monetary debt over people tend to be wealthy and powerful people (i.e. affiliated with banks, landlords, loan-sharks, credit card companies), and, let's face it, they can handle losing the obligation that the poor “owe” them, which creates non-free relations more akin to slavery than mutual aid.
Graeber's suggested solution to the enslaving characteristics of some debt and the socially constructed qualities that make it negotiable, is proposed at the end of Debt: he calls for a Biblical-style “Jubilee” to wipe-free the slate on these arduous forms of debt existing between unequal parties. Jubilee was a commonplace practice in many earlier periods of human history—in fact, it was regularly done, not only for purposes of social justice, but also to re-balance societies that were on the brink of revolution. The latter is likely the very thing that motivated the Saudi Arabian monarchy when it wiped-out some forms of consumer debt for its citizens, gave government employees pay raises, and offered cheap, subsidized loans—all in the wake of the Arab Spring. Autocratic regimes watched with fear as the Egyptian dictatorship was overthrown; so, instead of letting the burdens of debt become so extreme that they threaten the monarchy's hold over its citizens, the Saudi Arabian government deemed it smarter for the oil-wealth coffers to be used to soften the worst injustices of capitalism. Jubilee could help eliminate un-payable debt and thus return us to the socially-useful sort of debt that obliges us to keep working together in social communities (what Graeber simply identifies as “communism”).
While there is an abundance of wisdom to admire with Debt, Graeber's incredibly-fine attention to detail sometimes distracts from the general argument. Also, although his prose is fascinating, Graeber has the odd habit of starting nearly every single paragraph via direct, yet non-obvious reference to the prior paragraph (e.g. writing “this” without indicating exactly what previous thing he is referring to). Thus, putting down and picking-up the book makes for a discordant experience. Yet, such minor aesthetic concerns aside, Debt is not only timely and consciousness-expanding, but also an entertaining read. Students of solidarity, altruism, mutual aid, and human relations generally would benefit greatly from Debt’s insights.