Notes on Debt

C. Emmelhainz, rev. January 30, 2013

Ive been sitting on my reading notes for almost two years (!), but Id like to go ahead and post
my summary of David Graebers Debt: The First 5000 Years. (2011, Melville House, NY). Its
taken me this long because I think its great and I havent been sure how to do it justice.
Graeber is a well-known economic anthropologist, denied tenure as a professor at Yale in part
for his involvement with Occupy-type movements. Hes written a great book on value, and now
has move on to debt: what is it? Where does debt come from? What are the effects? And why do
we feel so obligated to honor it, even if the terms werent fair to begin with?
The chief virtues of this book are 1) it asks an interesting question, 2) he provides juicy evidence
from across history and continents, and 3) its written in an engaging style. Below I provide an
extended summary of the points I found valuable. Id be interested to hear if you read it, and
what your thoughts are!
Let No Debt Remain Outstanding
Graeber starts out with a question posted by a youngster condemning third world default on IMF
debt: Surely one has to pay ones debts?
But he finds this an odd question. If you buy into economist-speak and maximal self-interest,
why pay your debts if you dont have to? If instead youre making a claim that its morally
wrong to ever default, what happens when we acknowledge the debts werent incurred fairly,
ceteris paribus, on a level playing field?
Much as Jared Diamond frames Guns, Germs and Steel around a question asked by a PNG
tribesman, Graeber frames his exploration around this womans question of debt.
Twenty Chickens for That Cow
He starts by attacking economic myth directly, critiquing the idea of barter as a primitive
economics that was used until some caveman realized you could seize valuable stuff and call it
money (23). Graeber notes that weve never found a land of barter anywhere in the world or
in history:
But to this day, no one has been able to locate a part of the world where the ordinary
mode of economic transaction between neighbors takes the form of "I'll give you twenty
chickens for that cow" (29).

Instead, he notes, we see barter when people trade with strangers they cant otherwise trust (32),
or when modern economies collapse and their citizens money has lost all its value (40). But if
barter hasnt ever been a whole economic system, what else has? And how does debt relate to
money?
Thats Money, Honey
Graeber introduces us non-economists to two ideas about money. The credit theory argues that
money is just a promise that I owe you something (in other words, money is debt) (46). But the
chartalist theory suggests money is what states create in order to collect taxes, in order to keep
themselves going (54). Im not clear on which Graeber leans toward, but he goes on to argue,
perhaps like chartalists, that early states used force as well as morality to force people to use
money and pay taxes.
Ill be in a whole new tax bracket
We in recession but let me take a crack at it.
Travis McCoy, Billionaire
Around 600 B.C., priests and intellectuals in many religious traditions began arguing that all
humans owe a primordial debt to society, payable to the local divinely-backed king (56). But,
Graeber asks, how can our absolute lifedebt to our families and community be reduced to taxes
(59)?
Social Currencies and Life Debt
To give us a comparison point, Graeber turns from our modern use of money to buy and sell
stuff to other types of money which isnt used for stuff. What he calls social currencies are used
to rearrange relations between people, like by cementing a marriage or paying off a murder
(60). Graeber claims these kinds of money circulate in human economies, or:
economic systems primarily concerned not with the accumulation of wealth, but with the
creation, destruction, and rearranging of human beings (130).
But anyway, how can we pay back God, or our parents, or our people? Graeber says this isnt
possible, and calls this lifedebt a myth. But why have this idea if we cant ever fulfill the debt; if
instead we feel trapped by it?
Stepping back and refocusing, Graeber notes that creditors would enslave or sell people to pay
off their debts. But to avoid general revolt against this cruelty, ancient kings gave out general
amnesties to wipe all debts clean every now and then. Like the Biblical jubilee. But as in all
unequal societies, debts keep returning, and the belief that one has to pay ones debts persists:
This is a great trap of the twentieth century: on one side is the logic of the market, where
we like to imagine we all start out as individuals who don't owe each other anything. On
the other is the logic of the state, where we all begin with a debt we can never truly pay.
We are constantly told that they are opposites, and that between them they contain the
only real human possibilities. But it's a false dichotomy. (71)

What grounds our economic relations, then? In chapter five, Graeber tosses off communism,
noting that every human uses reciprocity and communism as a manner of exchange in some
situations and relationships (95), but it cant fairly rule any society all of the time. Furthermore,
any hierarchy creates debt from the weaker party, even in a gift-based relationship (109). This
is a key social point, and I encourage you to read this section.
If I Were a Rich Man...
From this, Graeber goes on to say that these patron-client relations seem great for a while
(119), but when the relationship sours, the lesser person is again trapped: this is what makes
situations of effectively unpayable debt so difficult and so painful (121). Graeber highlights
how our antiseptic study of economics so often ignores the sex, drugs, violence, and death that
are part of the economic and social relations between unequal and debt-trapped people (127).
The Ungrateful Servant
With this as a framework, Graeber retells Jesus Parable of the Ungrateful Servant, highlighting
the point at which the indebted man watches his wife and children sold into slavery by a
powerful creditor. This is likely something Jesus followers had seen in their communities. But
when, Graeber asks, did a man become forced to sell other human beings?

Graeber locates the sale of people within the earliest agrarian civilizations, and (interestingly),
even suggests that monotheistic concerns with patriarchal honor and protecting women may
ultimately be founded in these social contexts where a mans economic failure resulted in the
shame of watching his family seized, raped/killed, and sold to another. . . all because of his
failure in business (179).
Slavery and Property
So in the human economies above, we saw that social money could smooth relationships in a
community changed by marriage, death, or injury. But Graeber reminds us that money can never
fully substitute for a woman given away in marriage, or a man killed by the enemy:
Each person is unique . . . because each is a unique nexus of relations with others (158)
... to make a human being an object of exchange, one woman equivalent to another for
example, requires first of all ripping her from her context (159)

This is slavery, he says. To turn a person into an economic object involves violence. Graeber
argues that property isnt about us and our stuff. At the core, its an arrangement between
people concerning things (198). Here he cites Orlando Patterson, who argued that the idea of
absolute private property comes from slavery: One can imagine property not as a relation
between people, but as a relation between a person and a thing, if one's starting point is a relation
between two people, one of whom is also a thing (200).

here, via google images

In contrast, the word free comes from friend. Only a free person can be committed to
relationships; while a person sold into slavery for debt becomes dead to his or her former social
relationships (200).
Living in a Material World
At this point, Graeber does a great big overview of western economic history. Read it yourself.
Coins were invented in 600BC: In times of war and upheaval, wealth was no longer based in
relationship but rather in hoardable, stealable goods that could also retain value between one
social context and another (213). I dont know how to make sense of this, though, next to the
saying popular after the collapse of the Soviet Union:

Better 100 Friends than 100 Roubles. Russian Proverb. Image.

In times like this, Graeber notes, debt is especially harmful. In a monetary system based on cash,
a person can easily be traded for cash (214). But while empires built a military-coinage-slavery
complex around coins, philosophers built both materialist and transcendental philosophies,
giving us our current mental division of marketplace and morals: one ruled by absolute
selfishness and the other by absolute self-sacrifice (249).
The Decimation of America
From there, Graeber outlines each turn of monetary systems from credit to cash and back. I fastforward here to the European imperial conquest of Africa and the Americas. In a disastrous
cycle, the Middle Ages social credit was replaced by gold and silver, just as new metal found in
America led to tumultuous inflation in Europe. Conquistadors destroyed indigenous American
political and economic systems in order to seize more gold and silver, which only made the
problem worse.
Money, its a crime.
Share it fairly, but dont take a slice of my pie.
Pink Floyd, Money
But why were the conquistadors so insatiable? Why could they never get enough? Graeber
suggests that men like Cortes were deeply in debt, at risk of losing everything, and struggling to
get out of it, even as the inflation that resulted from their import of money to Europe worsened
their own debt:
We are not dealing with a psychology of cold, calculating greed, but of a much more
complicated mix of shame and the frantic urgency of debts that would only compound
and accumulate and outrage at the idea that, after all they had gone through, they
should be held to owe anything to begin with.
If all this seems suspiciously reminiscent of the fourth Crusade, with its indebted knights
stripping whole foreign cities of their wealth and still somehow winding up only one step
ahead of their creditors, there is a reason. The financial capital that backed these
expeditions came from [Italian moneylenders]. What's more, that relationship, between
the daring adventurer on the one hand and on the other, the careful financier, whose
entire operations are organized around /// producing steady, mathematical, inexorable
growth of income, lies at the very heart of what we now call "capitalism" (318-319).
Ultimately, Graeber says, the people choosing to harm locals in order to make a profit didnt feel
in control of their own life, and those in control (the investors) didnt care (319). (I suspect
racism and a belief that the world owed them also played a big role). This also strongly
resembles todays corporate pressure, where those C-suite guys making decisions that harm
families claim they are morally bound not to the communities that raised them, but to produce
profit for their investors at any human cost.

All I wanna do is [click-click-click]

And ah, and take your money
MIA, Paper Planes
Graeber actually compliments the Catholic and Islamic laws against usury (interest-bearing
investments), which he sees as a stabilizing force against making risky investments [aka housing
bubble??] on the backs of other people:
All of this helps explain why the Church had been so uncompromising in its attitude
toward usury. It was not just a philosophical question; it was a matter of moral rivalry.
Money always has the potential to become a moral imperative unto itself. Allow it to
expand, and it can quickly become a morality so imperative that all others seem frivolous
in comparison. For the debtor, the world is reduced to a collection of potential dangers,
potential tools, and potential merchandise. Even human relations become a matter of
cost-benefit calculation. (319)
[And it strikes me here that Paul writes, Let no debt remain outstanding, except the continuing
debt to love one another (Rom 13:8). We read this as an obligation to cough up. But maybe its
also an obligation on the creditor and the community, to reform relationships through mercy to
those with unpayable debts. Maybe it means reducing barriers to relationship, and acting
collectively to make it more difficult for the economy to destroy the bonds that hold us together.]
In our modern capitalism, then, both debtor and creditor focus on money at the expense of our
other social relations with each other. The corporations, as I suggested above, really excel at this,
systemically dividing those making decision from those enacting the decisions:
The executives who make decisions can argue--and regularly do--that, if it were their
own money, of course they would not fire lifelong employees a week before retirement, or
dump carcinogenic waste next to schools. Yet they are morally bound to ignore such
considerations, because they are mere employees (320)
Im going to be a happy idiot
And struggle for the legal tender
Where the ads take aim and lay their claim
To the heart and the soul of the spender
Jackson Brown, The Pretender

Final Notes on Capitalism:

But why do we tolerate all this? Weve succumbed to models of self/interest that economist
backed by businessmen created for us, remaking our relations and our debts in the image of an
insatiable market: What is interest but the demand that money never cease to grow? (332).
What we see at the dawn of modern capitalism is a gigantic financial apparatus of credit
and debt that operatesin practical effectto pump more and more labor out of just
about everyone with whom it comes into contact, and as a result produces an endlessly
expanding volume of material goods. It does so not just by moral compulsion, but above
all by using moral compulsion to mobilize sheer physical force. (346)
Capitalism has never been about choice, Graeber says. [In other words, unless you have lots of
money or rare skills, youre not setting the terms of your work or loan contracts. Youre just
taking whatever crumbs are thrown at you, and competing for more.] We can see this from the
first enslavement of the Americas and Africans, to the 1/5 of Americans who work as templaborers. In all these things, our own ability to make meaningful choices is gradually destroyed:
Both the relation between master and slave, and between employer and employee, are in
principle impersonal: whether you've been sold or you're simply rented yourself out, the
moment money changes hands, who you are is supposed to be unimportant; all that's
important is that you are capable of understanding orders and doing what you're told.
(352)
Yeah, thats a Marxist analysis, and he cites the guy directly, that so long as we also allow some
people to control productive capital and leave others with nothing to sell but their brains and
bodies, the results will be in many ways barely distinguishable from slavery (354).
We could no more have a universal world market than we could have a system in which
everyone who wasn't a capitalist was somehow able to become a respectable, regularly
paid wage laborer with access to adequate dental care. (355)
Wow. Thats a strong condemnation.
Ive seen the future, I cant afford it
Tell me the truth sir, someone just bought it
ABC, How to Be A Millionaire
So now what? We left the cash economy with Bretton Woods and the loss of the gold standard
[cf. Erik Townsend], but our credit economy hasnt been any gentler. Were all in debt. And for
the worlds non-elites, crushing personal or governmental debt often comes from simply wanting
more than the minimum for ones family and communities, something:
to be given to children, to share with friends, or otherwise to be able to build and
maintain relations with other human beings that are based on something other than sheer
material calculation. One must go into debt to achieve a life that goes in any way beyond
sheer survival. (379)

In the end, capitalism isnt about economic freedom for individuals, he says. Thats an illusion.
Instead, as average people invested in the stock market and 401Ks, finance capital became the
buying and selling of chunks of that future, and economic freedom, for most of us, was reduced
to the right to buy a small piece of one's own permanent subordination (382).

Here, via google images

Ouch. But worst of all, we cant address this, he says, because weve stopped noticing how the
legacy of violence has twisted everything around us, freedom (friend-dom) no longer means
the ability to enter into positive social relationships, but just to have some temporary control over
ones own self in relation to powerful forces (385). Ultimately, he says, thats what is:
so pernicious about the morality of debt: the way that financial imperatives constantly
try to reduce us all, despite ourselves, to the equivalent of pillagers, eyeing the world
simply for that can be turned into money and then tell us that its only those who are
willing to see the world as pillagers who deserve access to the resources required to
pursue anything in life other than money. It introduces moral perversions on almost
every level (389).
Beyond the Four Corners of the World+
I watched my parents grapple with this as they tried to help Navajo friends struggle to become
economically self-sustaining. A hundred years ago, the US government slaughtered Americas
Navajo and their flocks of animals, seized their lands, and sold off their wealth. Now many
Navajo communities are almost entirely propped up by government cash-injections, unequally
distributed oil revenues, and day-labor in Phoenix, Denver, and Albuquerque.
And theyre one of the least decimated tribes.
An academic article uses the quote above+ to suggest that many Navajo women make it
economically only as they sever relationships with their people and go beyond the four corners
of the world of the Navajo. Those who leave the rez for suburban life are labeled bilasana
(apple): red on the outside, but whitewashed on the inside.

Its not a fair label, but it reflects this reality: that the only way to stay afloat economically is to
be willing to sever relationships between human beings. And so we condemn those who choose
relationships over selling their labor in a boomtown as failures and a drain on the state.
Dont want no paper gangsta /
Wont sign away my life to /
Lady Gaga, Paper Gangsta
Final Thoughts
This question presses in on me every day, as well. A hometown girl, I never wanted to leave the
Midwest. But with few opportunities there, I eventually left for the chance to make it at grad
school and in a professional career. Ive made it, for now, but at the cost of moving to Asia, with
great colleagues and friends but at a terrible distance from the ones I love. My professional
colleagues operate the same way, having a shot at a career, status, creative work, and the
possibility of gaining enough money to do something to help others but at the cost of long-term
commitment to a place and the people (family, friends, or lovers) that they love.
So why are we making these decisions? Can we as Americans open up to the idea that choosing
relationships over income might not be failure? That choosing to step away from our enormous
wealth, that wealth created by terrible debt, might be the right choice? As Graeber suggests, we
cant go back. But in the end, he answers his own question with these possibilities:
What is a debt, anyway? A debt is just the perversion of a promise. It is a promise
corrupted by both math and violence. If freedom (real freedom) is the ability to make
friends, then it is also, necessarily, the ability to make real promises. What sorts of
promises might genuinely free men and women make to one another? At this point we
can't even say. It's more a question of how we can get to a place that will allow us to find
out. And the first step in that journey, in turn, is to accept that in the largest scheme of
things, just as no one has the right to tell us our true value, no one has the right to tell us
what we truly owe. (391)

Notes.
- If this commentary was helpful to you, please cite it and link to it! The core ideas are Graebers, and
the commentary is mine. If you dont feel comfortable listing this in a blog post or works cited, ask
around to find out how you can still give credit for the summary and commentary posted here.
- This is an overview for non-commercial use, and not a substitute for Graebers full argument. The
money quotes above are from (http://forum.tagoria.net/wbb/index.php?page=Thread&threadID=26319)
or (http://itsamoneything.com/money/lyrics-popular-classic-music/). Photos are credited in hyperlinks.
- * My only critique is that the man used his fame to start a flame-war with a little-known student on a
professional blog, trashed the whole idea of blogging, then disappeared. We deserve better from someone
with otherwise great work.