Notes on Debt

C. Emmelhainz, rev. January 30, 2013
I’ve been sitting on my reading notes for almost two years (!), but I’d like to go ahead and post
my summary of David Graeber’s Debt: The First 5000 Years. (2011, Melville House, NY). It’s
taken me this long because I think it’s great and I haven’t 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. He’s 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 weren’t 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) it’s written in an engaging style. Below I provide an
extended summary of the points I found valuable. I’d 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 one’s debts?”
But he finds this an odd question. If you buy into economist-speak and maximal self-interest,
why pay your debts if you don’t have to? If instead you’re making a claim that it’s morally
wrong to ever default, what happens when we acknowledge the debts weren’t 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 woman’s 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 we’ve 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).

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

death. and death” that are part of the economic and social relations between unequal and debt-trapped people (127). Slavery and Property So in the human economies above. raped/killed..” From this. Graeber tosses off communism. Graeber retells Jesus’ Parable of the Ungrateful Servant. or injury. Graeber asks. highlighting the point at which the indebted man watches his wife and children sold into slavery by a powerful creditor. drugs. but it can’t fairly rule any society all of the time. . But Graeber reminds us that money can never fully substitute for a woman given away in marriage. This is likely something Jesus’ followers had seen in their communities.. did a man become forced to sell other human beings? Graeber locates the sale of people within the earliest agrarian civilizations. . and I encourage you to read this section. then? In chapter five. Furthermore.. we saw that social money could smooth relationships in a community changed by marriage. the lesser person is again trapped: “this is what makes situations of effectively unpayable debt so difficult and so painful” (121). The Ungrateful Servant With this as a framework. requires first of all ripping her from her context (159) . and (interestingly). or a man killed by the enemy: Each person is unique . Graeber goes on to say that these “patron-client relations” seem great for a while (119). but when the relationship sours. even suggests that monotheistic concerns with “patriarchal honor” and protecting women may ultimately be founded in these social contexts where a man’s economic failure resulted in the shame of watching his family seized. . .. because each is a unique nexus of relations with others (158) . “If I Were a Rich Man. But when. and sold to another. all because of his failure in business (179).What grounds our economic relations. to make a human being an object of exchange. This is a key social point. noting that every human uses reciprocity and communism as a manner of exchange in some situations and relationships (95). one woman equivalent to another for example. Graeber highlights how our antiseptic study of economics so often ignores the “sex.” even in a gift-based relationship (109). violence. any hierarchy “creates debt from the weaker party.

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. Image. Living in a Material World… At this point. here. I don’t know how to make sense of this. he says. At the core. but as a relation between a person and a thing. wealth was no longer based in relationship but rather in hoardable. if one's starting point is a relation between two people. – Russian Proverb. Coins were invented in 600BC: In times of war and upheaval. it’s an “arrangement between people concerning things” (198). Only a free person can be committed to relationships.This is slavery. To turn a person into an economic object involves violence. the word free comes from friend. Read it yourself. Graeber does a great big overview of western economic history. though. one of whom is also a thing” (200). while a person sold into slavery for debt becomes dead to his or her former social relationships (200). via google images In contrast. Graeber argues that property isn’t about us and our stuff. next to the saying popular after the collapse of the Soviet Union: Better 100 Friends than 100 Roubles. . stealable goods that could also retain value between one social context and another (213).

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

For the debtor. 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. except the continuing debt to love one another” (Rom 13:8). Paper Planes Graeber actually compliments the Catholic and Islamic laws against usury (interest-bearing investments). Maybe it means reducing barriers to relationship. of course they would not fire lifelong employees a week before retirement. to reform relationships through mercy to those with unpayable debts. the world is reduced to a collection of potential dangers. (319) [And it strikes me here that Paul writes. and it can quickly become a morality so imperative that all others seem frivolous in comparison. it was a matter of moral rivalry.] In our modern capitalism. systemically dividing those making decision from those enacting the decisions: The executives who make decisions can argue--and regularly do--that. We read this as an obligation to cough up. Allow it to expand. as I suggested above. “Let no debt remain outstanding. Even human relations become a matter of cost-benefit calculation. Yet they are morally bound to ignore such considerations. But maybe it’s also an obligation on the creditor and the community. and potential merchandise. because they are mere employees (320) I’m 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 corporations.All I wanna do is [click-click-click] And ah. potential tools. then. and take your money MIA. It was not just a philosophical question. and acting collectively to make it more difficult for the economy to destroy the bonds that hold us together. if it were their own money. Money always has the potential to become a moral imperative unto itself. both debtor and creditor focus on money at the expense of our other social relations with each other. really excel at this. or dump carcinogenic waste next to schools. The Pretender .

something: to be given to children. Erik Townsend]. How to Be A Millionaire So now what? We left the cash economy with Bretton Woods and the loss of the gold standard [cf. In all these things. and he cites the guy directly.] We can see this from the first enslavement of the Americas and Africans. (352) Yeah. unless you have lots of money or rare skills. are in principle impersonal: whether you've been sold or you're simply rented yourself out. Graeber says. You’re just taking whatever crumbs are thrown at you. regularly paid wage laborer with access to adequate dental care. the moment money changes hands. the results will be in many ways barely distinguishable from slavery” (354). I’ve seen the future.Final Notes on Capitalism: But why do we tolerate all this? We’ve succumbed to models of self/interest that economist backed by businessmen created for us. (346) Capitalism has never been about choice. and competing for more. someone just bought it ABC. And for the world’s non-elites. I can’t afford it Tell me the truth sir. That’s a strong condemnation. (379) . 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. (355) Wow. all that's important is that you are capable of understanding orders and doing what you're told. crushing personal or governmental debt often comes from simply wanting more than the minimum for one’s family and communities. 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. One must go into debt to achieve a life that goes in any way beyond sheer survival. We’re all in debt. It does so not just by moral compulsion. [In other words. What we see at the dawn of modern capitalism is a gigantic financial apparatus of credit and debt that operates—in practical effect—to pump more and more labor out of just about everyone with whom it comes into contact. but our credit economy hasn’t been any gentler. 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). who you are is supposed to be unimportant. our own ability to make meaningful choices is gradually destroyed: Both the relation between master and slave. to share with friends. and between employer and employee. to the 1/5 of Americans who work as templaborers. or otherwise to be able to build and maintain relations with other human beings that are based on something other than sheer material calculation. but above all by using moral compulsion to mobilize sheer physical force. you’re not setting the terms of your work or loan contracts. that’s a Marxist analysis. and as a result produces an endlessly expanding volume of material goods.

It introduces moral perversions on almost every level (389). A hundred years ago. . But worst of all. but just to have some temporary control over one’s own self in relation to powerful forces (385). eyeing the world simply for that can be turned into money – and then tell us that it’s 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. but whitewashed on the inside. “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. and day-labor in Phoenix. and sold off their wealth. via google images Ouch. capitalism isn’t about economic freedom for individuals. unequally distributed oil revenues. and economic freedom. was reduced to the right to buy a small piece of one's own permanent subordination” (382). he says. he says. as average people invested in the stock market and 401Ks. that’s what is: so pernicious about the morality of debt: the way that financial imperatives constantly try to reduce us all.” – freedom (“friend-dom”) no longer means the ability to enter into positive social relationships. Denver. seized their lands. “finance capital became the buying and selling of chunks of that future. we can’t address this. Now many Navajo communities are almost entirely propped up by government cash-injections. That’s an illusion. for most of us. to the equivalent of pillagers. Instead. Here. because we’ve stopped noticing how “the legacy of violence has twisted everything around us. the US government slaughtered America’s Navajo and their flocks of animals. and Albuquerque. Ultimately.In the end. 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. he says. And they’re one of the least decimated tribes. Those who leave the rez for suburban life are labeled bilasáana (apple): red on the outside. despite ourselves.

I eventually left for the chance to “make it” at grad school and in a professional career. It's more a question of how we can get to a place that will allow us to find out.tagoria. But in the end. I’ve made it. is to accept that in the largest scheme of things. . anyway? A debt is just the perversion of a promise. we can’t go back.This is an overview for non-commercial use. he answers his own question with these possibilities: What is a debt. having a shot at a career. please cite it and link to it! The core ideas are Graeber’s. that wealth created by terrible debt. Paper Gangsta Final Thoughts This question presses in on me every day.* My only critique is that the man used his fame to start a flame-war with a little-known student on a professional blog. . But with few opportunities there. and the commentary is mine. then disappeared. My professional colleagues operate the same way. If you don’t feel comfortable listing this in a blog post or works cited. but at the cost of moving to Asia. It is a promise corrupted by both math and violence. And so we condemn those who choose relationships over selling their labor in a boomtown as “failures” and a drain on the state. And the first step in that journey.It’s not a fair label. . creative work.php?page=Thread&threadID=26319) or (http://itsamoneything. in turn. Don’t want no paper gangsta / Won’t sign away my life to /… Lady Gaga. What sorts of promises might genuinely free men and women make to one another? At this point we can't even say. I never wanted to leave the Midwest. the ability to make real promises. might be the right choice? As Graeber suggests.net/wbb/index.If this commentary was helpful to you. . no one has the right to tell us what we truly owe. or lovers) that they love. necessarily. with great colleagues and friends but at a terrible distance from the ones I love. friends. just as no one has the right to tell us our true value. then it is also. trashed the whole idea of blogging. ask around to find out how you can still give credit for the summary and commentary posted here. The money quotes above are from (http://forum. A hometown girl. Photos are credited in hyperlinks.com/money/lyrics-popular-classic-music/). status. 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. If freedom (real freedom) is the ability to make friends. (391) Notes. for now. 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. but it reflects this reality: that the only way to stay afloat economically is to be willing to sever relationships between human beings. and not a substitute for Graeber’s full argument. We deserve better from someone with otherwise great work. as well.

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