Debt: The First 5,000 Years
by David Graeber
Melville House, 2011, 554 pp.

As recently as a year ago, the anthropologist David Graeber was well respected within his academic discipline but little-known outside of it. His sole brush with public notoriety had come in 2005, when Yale controversially refused to renew his teaching contract for reasons that Graeber and his supporters linked to his anarchist politics and outspoken activism. When his book Debt: The First 5,000 Years was released in July 2011, there was little to suggest that it had in any way captured the zeitgeist.

Within weeks of the book’s release, the debt-ceiling standoff between the Obama administration and congressional Republicans nearly sent the American economy over a cliff and put the national debt at the center of political debate. Within months, the Occupy Wall Street movement had become a media phenomenon, and Graeber had emerged as one of its most prominent leaders and its most important theorist. Almost overnight, Debt was taken up as a manifesto for the moment and a formulation of Occupy’s overall stance—an impression furthered by the book’s most striking political take-away, its call for a biblical-style Jubilee in which all debts (national as well as personal) would be forgiven.

Against this background, readers would be forgiven for picking up Debt expecting a political polemic in the tradition of Howard Zinn or Naomi Klein, writers whose books (whatever their undoubted merits) tend to appeal more to activists than to scholars. To do so, however, would be to underestimate both the ambition and the originality of Graeber’s book. Although its polemical aims are never entirely absent, they are contained in a meticulously researched and wide-ranging work of real theoretical importance. Debt offers both a reconceptualization of the nature of economic relations and a grand theory of history—all interspersed with themes ranging from the socio-historical origins of Axial Age philosophies to the nature of blood-debts among the Lele of the Congo to (fear not) a few good shots at the big banks and the International Monetary Fund.

The book’s scope and ambition inevitably mean that it contains both hits and misses. But Debt is frequently successful and fascinating even when unsuccessful. It is worth reading even for those who cannot ultimately sign on to all of its conclusions.

THE BOOK’S argument begins with a thorough demolition of what Graeber terms “the myth of barter.” Familiar from innumerable economics textbooks, it goes like this: in the beginning, before the existence of money, there was only barter. Primitive hunter-gatherers survived by swapping nuts for berries or axes for arrowheads, leading to an increasingly developed division of labor. The obvious inconveniences of this system, however, made clear the need for a common medium of exchange, and thus money came into being. Over time, the ubiquity of money made systems of credit possible in turn—hence a historical progression from barter to money to credit.

The problem, as Graeber suggests, is that historical evidence suggests the opposite progression. There is no record of any society’s being primarily oriented around barter; on the contrary, barter tends to exist only in the interstices between societies or following the collapse of existing money economies. It is credit, not barter, that is historically primary; pre-money economies were built upon ongoing relations of obligation between neighbors and kin rather than atomistic exchange between strangers. Someone who coveted his neighbor’s cow would get it not by swapping baubles or bowstrings, but simply by taking it with the neighbor’s consent, thus incurring an obligation that might be only vaguely specified (or officially denied, in the case of gift-giving) and need not be reciprocated with a material object at all. As Graeber acknowledges, this line of argument is not original to him; anthropologists have been puncturing the myth of barter for a century. Yet the case has rarely been presented so convincingly, and perhaps his book will force economists to take some notice of it.

Dispelling the barter myth is important because of its broader implications for our conceptions of economic life. To believe that pre-monetary economic life consisted of isolated hunter-gatherers swapping goats for arrowheads is both to project the supposedly universal motive of “economic self-interest” onto all behavior throughout history and to abstract from the real social relationships (neighbors, parents, lovers, rivals) in which all such behavior was necessarily embedded. Graeber, somewhat unfairly, attributes this notion of the isolated homo economicus to Adam Smith, whose views he tends to caricature throughout the book. (Far from reducing all sociability to a form of exchange, as Graeber alleges, it would be more accurate to say—with the historian Emma Rothschild and others—that Smith took exchange to be just one form of sociability.) But origins aside, we frequently take for granted that there is something called the “economic sphere” in which people act out of “economic motives”—above all, self-interest—and whose logic is either autonomous or, more strongly still, serves as the model for all other domains of human life.

Against this kind of reductionism, Graeber proposes (in one of the book’s most important chapters) a different account of “the moral grounds of economic relations.” Even in economic life, he argues, the tit-for-tat logic of reciprocity and exchange is only one of the principles structuring human behavior; it exists alongside, and presupposes, what he labels “communism” and “hierarchy.” Communism (a deliberately provocative coinage) refers not to collective control over the means of production but to behavior according to the basic principle of “from each according to his abilities, to each according to his needs”—the principle that we take for granted when caring for a child or giving directions to a stranger. Hierarchy, on the other hand, justifies the inequalities between (what are presumed to be) qualitatively different classes of people by reference to a logic of custom and precedent.

Exchange differs from communism in its presumption that every good turn must be reciprocated (rather than that it merely would be if the need arose); it differs from reciprocity in its presumption that the parties enter and leave the transaction as formal equals. Debt, on this account, occurs during the time that an exchange between presumed equals has not yet been brought to completion—a time when the logic of hierarchy takes over and the debtor is presumed to have incurred a kind of moral guilt.

The point of this framework is that not all of human life can be reduced to forms of exchange and debt; they exist alongside other principles without which social life would be impossible. It is also worth stressing (although Graeber notes it only in passing) that the boundaries between these principles are themselves ambiguous, unstable, and contested: reciprocity can break down into hierarchy or communism into exchange—as when we discover that what we took to be a selfless favor has, in the eyes of the other party, incurred a reciprocal obligation. To what extent Graeber has reconceptualized economic life “pretty much from scratch,” as he claims, is open to debate. His theory fits rather easily into the “substantivist” tradition of economic anthropology, whose leading representative was Karl Polanyi. But the discussion here undeniably breaks new ground and forms the core of the book’s theoretical argument.

THE REAL heart of the book, though, is its varied and provocative investigations into the forms and mutations of debt relations across time and place. Many serve (and succeed) primarily as individual set-pieces. One thinks, for instance, of the discussion of the origins of patriarchy in the ancient Middle East, in which Graeber suggests that it was the ever-present threat of having one’s daughters seized as debt-pawns and sent off to labor in a stranger’s house that gave rise to a compensating set of repressively protective practices such as veiling. (Graeber is particularly good at reminding us that debts have constantly been cashed out not merely in money but also in human beings, and that the logic of debt has been intertwined with slavery and indentured servitude throughout history.) But on the whole there are two central narratives that dominate Graeber’s historical investigations.

THE FIRST narrative concerns the transition from “human economies” to “commercial economies”—from societies in which economic behavior is oriented toward rearranging relationships between human beings to those in which it is oriented toward the accumulation of wealth. There are echoes here both of the old sociological story of Gemeinschaft and Gesellschaft and of the Marxian notion of fetishism, the general theme being the breakdown of the old communal and personal world of relations between people and its replacement by a newly abstract and impersonal world of relations between things.

Debt differs from other and older kinds of obligation, Graeber suggests, in that it can be quantified—and thus transferred from one party to another outside the sphere of immediate social relationships. Quantification, in turn, can be achieved only through violence, which allows humans to be treated as homogeneous and precisely calculable by wrenching them from their social contexts. The transition from human to commercial economies is above all the story of the destruction of the old personal communities through the use of large-scale (particularly state) violence.

Graeber’s second and more striking grand narrative concerns the cyclical alternation between periods when transactions are conducted primarily through credit and those in which bullion and coinage prevail. The first great bullion period, he suggests, was the Axial Age, which he dates from roughly 800 BCE to 600 CE; it was followed by the collapse of the great ancient slave empires and a medieval period of credit that lasted until roughly 1450 CE. The modern era saw a second age of bullion that lasted until the 1970s, with Richard Nixon’s 1971 decision to take the United States off the gold standard serving as a bookend. Graeber’s claim is that we are now entering a new age of credit, with all that entails.

What, exactly, does it entail? The prevalence of cash, Graeber argues, goes hand in hand with the dominance of great conquering empires, with war-making, and with slavery. The portability and transferability of coins outside the sphere of immediate social relationships makes them conducive to plunder and ideal as soldiers’ pay; in turn, it is only strong central states that are able to impose standardized systems of coinage. Periods of credit, on the other hand, tend to be eras of relative peace and stability. When freed from the violent intrusions of the state, credit systems blur into local relations of sociability, trust, and mutual aid; it is these systems, for Graeber, that constitute genuine free markets as distinct from the state-backed plunder characteristic of capitalism.

Graeber traces the ramifications of these cycles of credit and bullion beyond economics proper into the realms of thought and culture. Some of this discussion might lead the reader to suspect that a rather crude notion of economic base and cultural superstructure is lurking in the background. (It is striking, to take just one example, that the Greek city of Miletus saw both the first example of Greek coinage and the birth of pre-Socratic philosophy, but there are any number of causal stories that one could invoke to explain this correlation beyond the simple notion that coinage produced materialist philosophy.)

Nonetheless, Graeber’s vision is often dazzling, even when open to skeptical objections, and represents the kind of attempt at grand historical narrative that has fallen out of fashion in recent decades. Perhaps the only work of similar scope and ambition that comes to mind from the previous twenty years is Giovanni Arrighi’s The Long Twentieth Century.

This cyclical narrative also has a clear takeaway for the future. Insofar as we are shifting from a period of bullion to one of credit, the implication is that the era of great state-based military empires—above all, the current American imperium—is coming to an end. While Graeber is cautious not to predict the precise shape that the future will take, he hints that it will look more like a return to localized communities of trust and mutual aid, coupled perhaps with new global institutions to protect debtors. Like many current doomsayers, his favored historical analogy is the fall of Rome and the transition to feudalism—but for him such a vision is largely grounds for optimism.

WHAT ARE we to make of this story? One would need scholarly expertise across a great number of disciplines to properly assess its plausibility, and I do not claim the requisite knowledge of financial history or West African anthropology or Sanskrit literature (to pick only three such disciplines) to be able to do so. It may, however, be worthwhile simply to look at the presuppositions of this final argument about the coming age of credit, for it seems to me that even Graeber’s own analysis may point in another direction.

In Graeber’s scheme, relations of credit and debt fall principally under the logic of exchange rather than communism or hierarchy. Of course, credit relations may not be entirely tit-for-tat—the neighborhood bartender may never confront the down-at-the-heels regular with his full tab—in which case they shade into communism and mutual aid. But there is nonetheless a difference between credit and communism; the fact that credit transactions may proceed on a basis of trust does not imply that the transactors have altruistic motives. This, at least, is the impression we get in the earlier, theoretical sections of the book.

When we get to the later, historical sections, however, these distinctions are set aside, and credit is frequently treated as if it were synonymous with communism and mutual aid. Adam Smith, for instance, comes under attack for his famous claim that economic transactions proceed from self-interest rather than benevolence, which Graeber takes to mean that such transactions operate on the basis of cash rather than credit. But this would be true only if credit were identical with benevolence—and Graeber has gone to some lengths to show that credit and debt spring not from benevolence but from hierarchy and exchange.

This may seem to be a minor inconsistency, but it is notable insofar as it calls into question the book’s later historical argument that credit economies are in some sense kinder and gentler than cash ones. At some risk of oversimplification, we might say that the rather sinister figure of “debt” in the early parts of the book, with its undertones of self-interest, servitude, and violence, turns in the later parts into the more appealing figure of “credit,” with its undertones of trust and mutual aid.

Graeber does have a response to this apparent contradiction. It is above all violence, in his story, that warps the healthy forms of credit into the perverse ones, and it is above all the state that is the agent of such violence. There are bottom-up forms of markets and credit that spring from local communities outside of state control and top-down forms that spring from the poisonous conjuncture of state coercive power and market imperatives. It is “the legacy of violence [that] has twisted everything around us,” he suggests at the end of the book, and in such a world any debt that we incur is merely “a promise corrupted by both math and violence.” Liberated from such violence, “genuinely free men and women” will step onto the scene to decide for themselves what they owe to each other.

Readers will have different reactions to these sentiments; I find them a bit pious. We may leave aside any philosophical questions about the possibility of such “genuinely free men and women”—a phrase that reminds us that however much Graeber may disparage “bourgeois” modes of thought, his anarchism is ultimately rooted in liberal notions about individual freedom and autonomy. And we might similarly leave aside qualms about Graeber’s apparent conflation of coercion with violence—and, at times, violence with state violence—which downplays the ways in which all human communities, even apparently peaceful and harmonious ones, rest on various forms of power and coercion short of outright violence.

Finally, although the suggestion that violence has “twisted” or “corrupted” human societies might seem to suggest, rather naively, that there exists some “natural” form of human society un-corrupted by violence, let us take this as merely a notional ideal for the future, not a depiction of any society in the past. (Elsewhere in the book, Graeber does in fact stress precisely the ubiquity of violence throughout history, and is careful not to downplay the inhumanity that was often prevalent in “human economies.”)

SUPPOSE WE accept that we are indeed entering a new cycle of credit, and that credit economies, freed from large-scale violent predation, can indeed turn into locally embedded communities of trust and mutual aid. We might then ask whether there is any indication that this nascent age of credit will take the benign rather than the malign form.

The financialization witnessed over the last few decades has certainly not resulted in a scaling down of economic transactions to fit the social relationships of local communities; quite the opposite. A term like “globalization” may have been overused to the point of banality, but it does adequately express the idea that the economic system is scaling up—well beyond the possibility of embeddedness in any conceivable community—rather than scaling down. The forms of credit prevalent in such an economy would have to be considered more “top-down” than “bottom-up” by virtually any standard. And regardless of the apparent waning of American hegemony, there is little indication that the world is becoming more peaceful or that economic transactions are becoming decoupled from predation and coercion. Perhaps the fact that the first decades of the supposed new credit era have so thoroughly diverged from Graeber’s notions about what such an era entails calls for a reevaluation of his overall framework.

Graeber recognizes all these facts, but prefers to put his hopes in the long term. We are a mere forty years into the new age of credit: “The one thing we can be confident of is that history is not over, and that surprising new ideas will certainly emerge.” This is incontestable, and it would be sheer hubris to assert that the beneficial changes he foresees are impossible. On the other hand, perhaps we should also recognize that there is no particular indication that they are likely. It is inevitable that the future will surprise us, but it is neither inevitable nor even probable that it will pleasantly surprise us.

If Graeber’s grand narrative is not entirely convincing, this does not necessarily detract from the achievements of his work as a whole. Its strength lies less in any single thesis about history or politics or social life than in the intelligence and fervor with which it opens up a startling array of problems. While undeniably a book of the moment, it is likely to be read long after the moment has passed.

Daniel Luban is a doctoral student in political theory at the University of Chicago.