Summary of the Content
The book that is the subject of this paper is entitled Debt: The First 5,000 Years. This book was published in 2011 by book author and anthropologist David Graeber. As the name implies, much of the content was focused on debt. It, however, tackled the said topic in relation to other social institutions and practices such as marriage, friendship, barter, law, religion, slavery, economics, and government management. By putting the topic in line with the very factors that make up human life and society, he basically showed that he considers debt has played an important part in it. Majority of the contents in the book were based on historical recounts about debt.
One particular piece of information that Graeber pointed out was the way how the Sumerian civilization made use of debt in their everyday life. The earliest recorded history of debt was during the time of the Sumerian civilization around 3500 BC. Debt, according to Graeber, was not yet monetized when the earliest urbanized humans used it.
Debt systems were based on the traditional way of borrowing and lending. A larger majority of the people in the Sumerian cities, for example, was engaged in farming and so the products and goods that they could trade with other people were mostly agricultural in nature. Debt, during that time, would take the form of lent and borrowed products. He went on to tell stories of farmers who had been buried so deeply in debt that their children and even grand children would be forced by their creditors to make the payments on their behalf.
The point of the inclusion of a historical perspective on the use of debt by no less than the Sumerians was to show how mistaken people often are when it comes to the real origins of debt. He described how kings and influential people in the ancient world would write off debts. The Law of Jubilee, for example, is one of such practices. This law was practiced in ancient Israel. Jubilee pertains to a special year wherein sins and debts would be written off using a concept of universal pardon. This practice has, in fact, been practiced even during the middle ages. Today, the process of writing off debts still exists.
Another important piece of information Graeber presented in the book was the notion that the concepts of debt and credit preceded the invention and use of money, as opposed to what contemporary sources of economic knowledge would suggest. Standard economic texts such as those that have been published by Adam Smith, the father of modern economics, for example, suggest that the concepts of debt and credit were merely a product of the growing complexities related to the use of money. Again, using historical, ethnographic, and archaeological information, he tried to disprove this and support the opposite—as to which between money and the concepts of debit and credit came first.
Graeber’s main objective in writing the book was to discuss debt and how it has helped shape the society that man knows of today. The contents of his book were rationally written in that it was not meant to favor the use of money and credit and debit-based systems of trade, at least based on the tone and structure of the sentences. Based on how he pitted debt against non-debt-based systems, however, his work would definitely seem biased against debt.
Analysis and Evaluation
Debt, the book, is an interesting book that is composed of historical, political, moral, and economic theories about the use and significance of debt . One unique characteristic of this book is that Graeber did not explicitly say what his aims or objectives were when he wrote it. Considering that, it would be easy to identify that his main goal was to inform its readers about debt.
Were the Aims and Objectives Met?
This brings us to the next question. Was the author able to meet those aims and objectives? In general, the answer to this question is a yes. But more importantly, how was he able to do so? Were the data and information that he presented directly contributed to the end goal of meeting those aims and objectives or were they just blindly chosen? The book is around 534 pages long with 12 chapters and around 50 pages of footnotes. Considering that length, it would be hard to think that an objective as simply as reversing the common knowledge about money and debt still was not met. At some point, within those 534 pages, he was able to make the right arrangement of different factors and variables to create a context supportive enough of his proposed notion about debt: that it preceded the use and invention of money. However, were all those pages of anthropological discourses on debt, credit, and money needed just to prove a single point?
It surely helped the readers understand more about the historical origins of debt and some aspects of money use within the context of ancient marketplaces but were all those data necessary to prove his main point? The answer is no. The point here is that he did not need to go deeper into some aspects of marketplace economics just to make a subtle point about debt and the role that it plays in today’s society.
The Main Case – Money was invented to Pay Debts
The book starts with an economic history about the world’s transition from being barter to money-based economy and the use of credit arrangements as a form of payment. A thing worth mentioning about this section is that Graeber appears to be expecting that his readers would be shocked knowing about these things. For starters, barter trade was, in reality, disliked by a lot of people because it prevented people from having a uniform way of quantifying their actual purchasing powers and so the world’s shift to the use of money as a medium of exchange was rather fast. Additionally, it is common knowledge among monetary economists that credit arrangements (i.e. debt) was the preferred means of exchange.
One of the main cases that he was trying to present and defend was that money was merely a product of debt. Today, the prevailing belief is that debt is merely a product of money. The anthropological and historical discourses that he presented to support his position as to which among the two came first was convincing.
However, it cannot be sound as not a lot of sources that could justify and affirm his positions exist; moreover, a closer review of the sources he used to justify the notion that money was merely invented to pay debts would show that they were open to interpretation. Meaning, any interpretation that one may came up with using the sources he used as justification may be non-falsifiable; that is, they cannot be disproved.
A solid example would be when he used the following excerpt “for much of the Tudor period the circulating medium was so small that the taxable population simply did not have sufficient coin in which to pay the benevolences, subsidies, and tenths levied upon them, and time and time again household plate, the handiest near money that most people possessed, had to be surrendered” . He used that excerpt to justify the idea that debt was used by the Europeans because there simply was not enough money supply during the period.
This idea may be true at some point, non-falsifiable even, but to someone who is knowledgeable in economics; this may not sound so convincing. For instance, when the supply of money in a market economy is low, there would be deflation. That is, the value of all the money currently in circulation would rise in value so that all of the existing products and commodities that could be bought with it would be accounted for.
The opposite happens when there is an excessively high volume of money in circulation—i.e. inflation. The money in circulation would be chasing the same volume of goods and commodities and so as a result, their value would fall. Either way, debt may indeed help relieve any short term disturbances between inflation and deflation but it is not that needed as the market forces would still be able to adjust the prices of goods and the value of money (or what Graeber referred to as circulating medium in his book) towards equilibrium. Graeber in that instance merely used a disprovable interpretation from a source to justify his notion about debt and money. This is one of the reasons why many educated readers find his work on Debt full of information but still unconvincing .
A Secondary Case – Moral Issues of Debt
It is normal to expect that the book would be mostly about the mechanics of debt and how it preceded money and still continues to be the preferred medium of exchange today—as evidenced by the high levels of government and public debt worldwide. It turns out that this expectation would be dumbfounded. In the succeeding chapters of his book, he focused on the moral issues of debt.
According to Graeber, debt has been used to do bad things to people in the past. Mostly, his recounts were related to slavery. This is based on the moral code of debt that suggests that debtors would always be under the mercy of the creditors, which in turn is based on the long standing notion that suggests that not honoring one’s debt is a form of disgrace.
The moral issues of debt were used by Graeber to make sense of what is happening in the world economy today. A lot of countries and big companies have been buried too deeply in debt that it caused a widespread economic crisis. This, according to him, is comparable to how debt was used to destroy and enslave people in the past.
This is where his thesis evolved into a somewhat leftist one. He presented statements that suggest that debt is destructive because of the different ways how it could be used to enslave people and destroy an otherwise smoothly running society, again using historical facts as the basis
He also correlated the existence and use of debt with the birth and growth of a capitalist society. By combining those two trains of thought, he was practically saying that capitalism is bad for society because it sets forth the possibility of turning people into slaves through debt; that it can be exploitative by nature.
A more proper approach to the topic would have been to condemn debt instead of the whole idea of capitalism. Debt is but one of the many facets that make up the entire system of capitalism. To condemn capitalism in such a way just because of the moral issues that may be associated with debt and its use since ancient up to the modern society would be more destructive.
The Disorganization of Graeber’s Book
The ideas and observations presented earlier about Debt were a product reading the entire 534 pages of it. Someone who simply skimmed the book would not be able to spot the same observations. This is because Graeber’s book was so disorganized; one would have to read entire chapters just to be able to get his main point. This, in any way, is not positive because a good book, one that is more than five hundred pages at that, must be coherent and organized. Graeber’s ideas were scattered.
He could be talking about the history of debt, credit, and money within the context of Greek and African people at one time and suddenly bring out modern case studies about debt, credit, and money use. What makes this problem on disorganization even worse is the fact that there were a large number of such instances.
For example, in the section about communism in Chapter Five, he was talking about the history of humans, the Garden of Eden, the Golden Age of Saturn, and the age of the Paleolithic hunter-gatherer bands to describe how inclined to communism people have always been. Over the next paragraphs, he would then be describing the cases of Exxon Mobil, Burger King, Goldman Sachs, and even Apple . This is certainly not a good way to present huge chunks of information to the readers.
The level of disorganization in Graeber’s book is alarming as it can cause some readers to misinterpret his work. In the example that was just provided, he was expounding on ideas that suggest that man has subconsciously liked the idea of communism; over the next few paragraphs, he was expounding on how problematic businesses that are born in a capitalist society could be. That can be mistakenly interpreted as a pro-communism statement. It still is not based on the author of this paper’s standards but such statements and methods of presenting and organizing data and information certainly lie near the borderline.
The timing of Debt’s publication may also be questionable. It was published in 2011 when the world was still licking its wounds from the recent economic and financial crisis. It was a period where people saw trillions’ worth of wealth get wiped out, where thousands of people lost jobs and business owners got forced to close down their businesses. It was a period where the people’s level of doubt on capitalism was high, perhaps high enough that they were on the brink of looking for an alternative.
At some point, one would believe that that was the direction the world was heading until the banks announced that there would be a jubilee, a period where the debts of businesses, especially the banks would be written off. This would be more popularly known as the bailout, when taxpayer money was used to rescue the banks and the businesses that were on the brink of collapse.
Sure, there were still casualties but the destruction of capitalism was still averted no less. Despite these tidbits of information, the author of this paper still considers Debt to be a fairly neutral, albeit highly disorganized, source of information about debt and money, among other things.
Conclusions
In conclusion, Debt by Graeber is an informative book. It is not a book that the author of this paper would recommend for people who do not have at least a basic knowledge in economics, especially monetary economics because the complexity of the information and the sheer disorganization of Graeber’s method would knock them off. The main and only strength of the book is that it is historically based, so much so that most, if not all, statements that he presented would almost sound convincing. While there were a lot of facts presented, most of them were meant to justify his positions and not to tell the real facts.
The openness of the sources he used to interpretation may also be a problem. The main weakness of the book is that it is extremely hard to identify what Graeber’s true aims and objectives are unless one reads the entire book. In fact, the author of this paper reckons that some people may have to read the entire book at least twice just to be able to get the gist of what Graeber has been rumbling about.
A second weakness, his analysis of debt and its relation to slavery and exploitation is a great source of alternative view about the recent turmoil in man’s capitalist society but his ideas may be prone to misinterpretation especially by people who have black and white views about leftist (communist) and rightist (liberal) ideas. Another weakness would be the fact that he could have met his aims and objectives without having to write a lot of anthropologic and historical anecdotes.
Sure, all those hundreds of pages of information helped him make his point but some of the topics he discussed were too distant to the things he was trying to achieve—which again, were not even made clear by him, either through words or actions, to begin with. All in all, these points add up to a general conclusion that Debt is a below average book written about debt and money. It would be a good historical reference for the history of debt sure, but for people looking for a high quality of analysis, it would not be a good source.
Works Cited
Graeber, David. "Debt: The First 5,000 Years." Melville House Publishing (2011): 01-542. Print. 11 July 16.
Kuttner, Robert. "The Debt we Shouldn't Pay." The New York Review of Books (2013): Web. http://www.nybooks.com/articles/2013/05/09/debt-we-shouldnt-pay/. 11 July 16.
Smith, Noah. "Book Review: Debt: The First 5000 Years." Noahpinion (2014): Web. http://noahpinionblog.blogspot.com/2014/11/book-review-debt-first-5000-years.html. 11 July 16.
