Tuesday, November 04, 2014

Book review: Debt: The First 5000 Years

A while ago, I wrote a rather acerbic critique of one of David Graeber's magazine articles, in which I mentioned his book, Debt: The First 5000 Years - which, at the time, I hadn't read. This angered a bunch of Graeberites, not to mention Graeber himself. And to be fair, I do have a bad habit of passing judgment on books before I read them. So, in keeping with my new philosophy of fairness and open-mindedness, I read the whole thing.

Now, from interacting with David Graeber on Twitter, I have a sneaking suspicion that he is a certain type of Public Intellectual - the type who bristles with anger at the mildest criticism. This type of Intellectual will view any paraphrase of his ideas by a critic to be a total and utter misreading and misrepresentation of what he intended to say, no matter how close the paraphrase is to the original - deviate one word from exact quotation, and you're a Vile, Intellectually Dishonest Boor (V.I.D.B.) who obviously couldn't be bothered to read what the author actually wrote. As for exact quotations, those are certain to be out of context. Just as there is no physically exact model of the Universe except for the Universe itself, there is no representation of the Touchy Intellectual's thought that is accurate except for the Intellectual's own complete and unabridged oeuvre. (Paraphrasing by supporters and fans, of course, is perfectly legit, as long as their support and fandom is unqualified.)

Now if I'm right, and if Graeber is this sort of fellow, then this review is in trouble before it gets started, because the main problem with Debt: The First 5000 Years is that after slogging through all 560 pages, I can't for the life of me tell what point it's trying to make about the phenomenon of debt. This means that in order to say anything about what I think this book might be saying, I will have to paraphrase heavily, which means that Graeber and the Graeberians will undoubtedly conclude (quite vociferously) that I am either lying about having read the book, or am simply a village idiot, and Tweet-spam me accordingly.

OK, so now that we've dispensed with the pleasantries...

Debt is a sprawling, rambling, confused book, mostly about economic history, mixed with some political and moral philosophy. It begins with a discussion of the "textbook" economic history about the transition from barter to money economies, and debunks this with historical evidence. Barter was actually never common. Graeber thinks this will come as a big shock to economists, and indeed it might to some, though monetary economists are well aware that before the advent of currency, credit arrangements were the standard form of payment, and were usually denominated in units of real commodities. Graeber discusses why this kind of payment, which doesn't have a standardized unit of account, is technologically difficult and clunky. He mentions some intermediate solutions, such as using fictitious units of account with fixed prices in bilateral credit arrangements (e.g. one goat = 5 "doubloons"), or using ingots of metal as a rough-and-ready unit of account. He also discusses how currency came into use primarily as a result of war (much of this point is actually sprinkled throughout the later sections).

This was the most interesting part of the book, and I learned some very interesting things from it. However, it would have been nice if Graeber had sat down and talked with an actual monetary economist before writing this section, instead of just reading Econ 101 textbooks. An hour or two of conversation with Miles Kimball, David Andolfatto or Steve Williamson - to name three people I've chatted with about these ideas - would stimulate many interesting thoughts and crystallize others, greatly enriching these sections of the book. Graeber shows keen economic intuition, actually, and I'm sure he could publish papers in monetary economics if he set his mind to it, but of course he has bigger fish to fry.

Most of the book, however, is not about the mechanics of debt, but about its connection to moral issues. If Debt can be said to have a basic thesis, it's that debt has a moral dimension, and that this moral dimension enables people to do bad things to other people. (Yes, I paraphrased; cue brickbats from Graeberians!)

Graeber advances this thesis indirectly. The bulk of the book describes a long sequence of bad things that have been done to people in the past - mostly some form of slavery or another. The upshot of this long litany, though it is never explicitly stated, seems to be that commerce - exchange, markets, capitalism, pick your preferred term - is fundamentally exploitative, and is fundamentally about turning free people into slaves. This is a pretty standard leftist idea. But by always reminding the reader that these arrangements of commerce/exchange/capitalism are carried out via the mechanism of debt, Graeber pours this old wine into a new glass. Capitalism is bad, and debt is the mechanism of capitalism, therefore it is upon the idea of debt that we must turn our disapprobation.

Many times throughout the book, Graeber rails against the fact that the morality of "paying one's debts" functions as a mechanism for keeping debtors in bondage to creditors. But a few times, Graeber actually reverses the equation, and laments the power that debtors can sometimes exercise over creditors, quoting the old saw that "if you owe the bank a hundred thousand dollars, the bank owns you; if you owe the bank a hundred million dollars, you own the bank." In other words, whether debt gives power to creditors or debtors, power is the bad thing, and debt is merely the mechanism by which power is expressed.

Now, this may sound a little silly - if someone wrote a book called "Metal: The First 5,000 Years," and then filled that book with stories of war and bloodshed, never failing to remind us after each anecdote that metal was involved in some way, we might be left scratching our heads as to why the author was so fixated on metal instead of on war itself. And in fact, that is indeed how I felt for much of the time I was reading Graeber's book. The problem was exacerbated by the fact that Graeber continually talks around the idea of debt in other ways, mentioning debt crises (without reflecting deeply on why these happen), the periodic use and disuse of coinage (which apparently is just as bad as debt in terms of enabling the capitalism monster), and any other phenomenon related to debt, without weaving these observations into a coherent whole. 

In other words, I am now angry at myself for paraphrasing the book, and trying to put theses into Graeber's mouth, because this is such a rambling, confused, scattershot book that I am doing you a disservice by making it seem more coherent than it really is.

The problem of extreme disorganization is dramatically worsened by the way that Graeber skips merrily back and forth from things he appears to know quite a lot about to things he obviously knows nothing about. One sentence he'll be talking about blood debts and "human economies" in African tribes (cool!), and the next he'll be telling us that Apple Computer was started by dropouts from IBM (false!). There are a number of glaring instances of this. The worst is not when Graeber delivers incorrect facts (who cares where Apple's founders had worked?), it's when he uncritically and blithely makes assertions that one could only accept if one has extremely strong leftist mood affiliation. The most egregious example of this occurs in the book's conclusion, when Graeber writes:
I would like to end, then, by putting in a word for the non-industrious poor. At least they aren't hurting anyone.
Both the declaration that the non-industrious poor aren't hurting anyone and the implication that being "industrious" probably is hurting someone are obviously false. But Graeber delivers absurdist sentences like this with the same calm assurance with which he tells us about when coinage first became popular in the Mediterranean.

Not only does this have the effect of diminishing Graeber's credibility as a narrator (what if he's wrong about the blood debts too?), but it makes a careful, critical reading of the book nigh impossible.

Now if you have strong leftist mood affiliation - i.e., if you've already bought into most of the background ideology that suffuses Graeber's book - then you will probably nod your head as you read this rambling mess of a book, and come away with the feeling that debt, in some way or another, is another star in the constellation of nasty concepts that you associate with the capitalist machine. But if you don't, you might walk away thinking "What was I supposed to take away from that? That debt is, like, bad, or something?"

Or at least you would if you had read Debt in 2007. But Debt was published in 2011, when legions of middle-class and poor Americans had just seen their wealth wiped out by a housing crash, and yet who were still on the hook for the money they had borrowed to buy those houses. With Americans drowning in debt, the message of a debt jubilee - a general bailout, not just for the big banks that started the whole mess - seemed very attractive (I, for one, would definitely have supported it!). So I'm sure it resonated with a lot of people when Graeber wrote:
It seems to me that we are long overdue for some kind of Biblical-style Jubilee: one that would affect both international debt and consumer debt. It would be salutary not just because it would relieve so much genuine human suffering, but also because it would be our way of reminding ourselves that...paying one’s debts is not the essence of morality, that all these things are human arrangements and that if democracy is to mean anything, it is the ability to all agree to arrange things in a different way.
That sounds like something we should have done more of in the years following the bursting of the housing bubble. But - and here I just want to editorialize a bit, since I deserve it after reading 560 pages of Graeber - as a general, regular thing it sounds like a bad idea. It smacks of the idea that wealth redistribution should be opportunistic rather than systematic - that the government should use debt cancellation in place of regular systems of welfare, thus replacing redistribution to those most in need with redistribution to those who are boldest in asking for "loans."

Anyway, now I'm rambling. To wrap up the review, Debt: The First 5,000 Years is not a book I recommend. It contains some interesting tidbits, but these are not worth the cost of the slog. Perhaps capitalism is a rotten, inhumane system that kills relationships, rewards violence and trickery, and enslaves us all to the brutal logic of the market before inevitably destroying the planet. Or perhaps not. But either way, there's little insight to be gained by reframing the issue in terms of debt. Or if there is, I'm damned if I can find that insight in this book. Perhaps the next 5,000 years will prove more enlightening.


  1. This is when you are at your best - when your sharpened penny pencil takes aim at things I disagree with. ;-)

    The jubilee idea is so strange. Here we have progressives who lament a lack of economic mobility supporting the idea that ownership shares should be perpetually frozen in time.


    1. Anonymous4:25 AM


      Appreciate the interesting link

    2. What's bizarre about the "Jubilee" is that the supporters for it never seem to really have an answer for what comes after the Jubilee, when suddenly everyone has to work again and realizes that there's no credit except at exorbitant cost and to special insiders. It's like the day after Jubilee, The Revolution comes and History Ends.

      Sadly, we have a couple of examples of countries that did decide to not pay any international debt. Most people do not find them inspiring - at best, you get a country like Ecuador that gets cut out of investment markets for the better part of a decade and then has to pay very high interest rates to get back in.

    3. Kevin,

      you seem to have purposefully decided to completely ignore what debt jubilee proponents have been calling for, and instead written an irrelevant post whose only purpose seems to be to express your dislike for progressives. Not that surprising I guess.

    4. The reason I posted the link here is because Graeber specifically calls out a "Biblical-style Jubilee". I mostly praise attempts at private debt reduction and only say that progressives are being extreme conservatives on this issue as it regards any attempt at public policy, mostly by exposing the idealized policy to actual details that would confront it in the real world when you think more completely about debt and ownership. If your response is that when progressives say "Jubilee" they aren't referring to the actual historical policies that they themselves reference, but instead they are referring to some vaguely reasonable redistribution with clear moral and practical implications, then you're kind of making my point.

  2. Barter is common enough in hyper-inflationary economies. The currency has no or depreciating value so people stick to barter trade, where possible. E.g. 1 MT of corn equals 1 cow. Still happens in Africa. Where corn is short the seller of corn usually gets it cheaper than one MT for one cow.
    Barter reflects lack of cash or lack of cash value in a subsistence economy with high inflation.

    1. Anonymous2:51 PM

      But that, dear poster, is precisely Graeber's point: barter is a system that people who are used to having money switch to when they can't use money anymore. It was not the original means of transacting goods. It was only when social groups became too large for informal systems of general exchange that spot payments and contractual debts came into existence.

  3. Anonymous1:12 AM

    Another angle on a different, but very similar, book that makes the case for a debt jubilee:
    "The complication, which Ross ignores, is that much of the institutional investment in fixed income is done by and on behalf of pension funds, retirement accounts, and mutual funds managed for individuals. Individuals—people, us—are the creditors we fear and loathe. Even someone with a simple passbook savings account is a lender: first directly to the bank she deposits at, and second indirectly to the debtors who borrow from her bank."


  4. Amen Noah,
    This concludes my thoughts on the book exactly (though I stopped reading somewhere around page 90).

  5. If you read the book without expecting it to have a point, you'll enjoy it. It's an awful book otherwise, especially the last chapter which does completely off the rails (apparently the Iraq war was motivated by a desire to keep the dollar as the global reserve currency).

    And the debt jubilee is terrible for a whole bunch of reasons. Either you let the banks take the hit - and end civilization as we know it - or the government pays off people's debts for them. This represents (in the US at least) a massive transfer to homeowners and graduates. Gerber wants us to muster up the resources and political will for the largest transfer of wealth in human history to benefit the most privileged demographics.

    1. jackrousseau4:26 AM

      "This represents (in the US at least) a massive transfer to homeowners and graduates."

      While the housing bubble and the storm of fraudulent lending etc make the first case a little difficult, since the government funded higher education to a vastly higher extent in the past, wouldn't this "massive transfer to graduates" actually be the pre-1980 status quo? We just pulled funding from students and put it in other places (wars, tax cuts, an out of control, looted health care system), and now we have a $1.2 trillion shortfall built up. Sure, it's easy to control people (as Graeber says) when they have massive, unpayable amounts of debt, but I think society is better off without all of these young people in despair.

      As far as the largest transfer of wealth in human history goes, since the vast majority of American families have seen nothing from their labor productivity increases since the 1970s (it's all going to the top), I think we'd be more or less OK if we just reversed that process by paying off mortgage and student debt via a wealth tax, or something similar (a UBI is a good idea). Otherwise we might be looking at the 1917 Russian Revolution method of reversing inequalities.

    2. I think that "the largest transfer of wealth in human history to benefit the most privileged demographics" is already in full motion. Without any debt jubilee. The question is whether we can offset part of this. Wait and see.

    3. Gerber wants us to muster up the resources and political will for the largest transfer of wealth in human history to benefit the most privileged demographics.

      Agreed. I remember it was Matt Bruenig over at Demos who made the point that all the noise and hot air over the Student Debt Burden obscured the fact that college students are disproportionately well-off and mostly not heavily weighed down by college debt. It's just that the anti-Student Debt crowd is the loudest.

  6. jackrousseau4:15 AM

    OK, while I like Graeber and the book and find that even when he's wrong, he promotes a lot of fun thinking, a lot of your critiques are pretty close to the mark. Especially when it comes to the last chapter... yeah, that should never have been left in after editing. However, I also think you're being a little unfair.

    "The upshot of this long litany, though it is never explicitly stated, seems to be that commerce - exchange, markets, capitalism, pick your preferred term - is fundamentally exploitative, and is fundamentally about turning free people into slaves."

    I didn't really get that when I read the book. I think you're mixing up correlation and causation - something Graeber admittedly makes easy to do. What he seems to be talking about in all his examples is how commerce/markets (which he very explicitly separates from capitalism!) are often the product of fundamentally exploitative power structures: Kings, despots, British/French imperialists and such bring them into existence where they find them useful. This doesn't mean they're necessarily bad in themselves, and there is a long tradition of market socialists that would tell you the same (contra your "This is a pretty standard leftist idea"). And while he's not very clear on it for a book named Debt, I think debt is another one of those tools that is often used for evil by disagreeable institutions, though it isn't necessarily evil in itself.

    While markets are one thing, capitalism is quite another, though, as it's marked by the power imbalances of wage labor, something not found in all previous incidences of commerce (and no, "kings getting tribute money for their labor of running their kingdom" is not wage labor, despite what some people generalize the concept to). This makes it generally exploitative and dangerous, and its use of markets and debt can also slide toward the evil side. You've read Dean Baker on how governments and business elites are constantly rigging markets in favor of the rich, haven't you?

    So while the book should have been more coherent, the lesson I got out of it was that the standard capitalist morality tales about markets and debt are pretty much BS and we should be looking at them more like any other tools - they can be used to help people, they can be used to hurt people. Like robots or computers or whatever else we have similar debates over.

    If I was to go into more detail I'd probably talk about how "the commerce mentality" focuses on and elevates a few parts of human nature at the expense of most others, which is why it can be volatile, but I think Graeber actually covered that pretty well in the book.

    1. There's nothing fundamentally exploitive about wage labor. It's just an agreement to take a fixed payment for work in lieu of other arrangements, like labor-sharing, crop-sharing, or profit-sharing (the former two being much more typical before modern times).

      As for why it didn't show up before, well, it did - there were laborers for pay in medieval cities and elsewhere. They just weren't common because most of the population still worked on farms.

    2. jackrousseau11:33 AM

      "There's nothing fundamentally exploitive about wage labor."

      No, you're defining it ridiculously broadly, as I explicitly tried to counter. Wage labor is not "fee for professional service", or "tribute for being the king", or "an alternative to splitting the caravan profits". It involves a very definite power imbalance in favor of the one doing the hiring, which is why unions rose up around the same time as industrial capitalism (in an attempt to soften that power imbalance) and why free people throughout history have looked upon it with distaste.

      Since this thread is talking about Graeber, here is a popular essay of his that deals with the subject in more detail:


    3. Anonymous1:20 PM

      It's not always clear who has the "power" in a wage relationship. I am a wage earner and because of my particular skillset and also what I've learned working at my particular company, I feel like I have leverage over my employer. The key, and I admit I've gotten lucky in what I've been exposed to (primarily outside the classroom), is having a skillset that is hard to replace and in need. And building a skill that is hard to replace is easier said than done and many times requires some luck on several dimensions.

  7. I like debt (in the macroeconomy). It's an expression of trust. I disagree with the whole debt-is-bad ideology, either from Graeber or from Reinhart and Rogoff. The more debt there is in the economy, the better it works. Third-world countries have lower debt-to-GDP ratios than industrialized countries, yet they are far poorer. Debt is mostly a symptom, not an exogenous variable. While for the single business, or the single creditor debt can become a problem on its own through debt-deflation, it's mostly what underlies that debt that is the problem, i.e. changing expectations through economic volatility. A bank borrows when it expects to get the money back, people usually borrow money when they invest into the future. Then the economy changes and suddenly the expectations are refuted, but the debt is still there. These changes from boom to bust are the problem, the debt is just a symptom.

    1. Anonymous2:30 PM

      Surely the interest rate associated with debt is the expression of trust. If its lower than the nominal rate of return the bank could expect on another investment, you are safer, but if, as it commonly is on things like credit cards, that rate is higher than the return the bank could expect elsewhere, you are in effect distrusted. It is true that the bank expects to get its money back, but that is only because in the expectation calculation, the rate charged is higher than the probability of default.

  8. Philip Pilkington9:54 AM

    When I feel that I haven't understood the overarching point of a book -- especially when I'm going to write a review -- I usually turn to other sources to see if others have seen something that I may have missed. In the case of Graeber's book there are many such sources. One of them, for example, is Wikipedia which states:
    Debt: The First 5000 Years is a book by anthropologist David Graeber published in 2011. It is a wide-ranging book, exploring debt's relationship with money, cash, barter, community, marriage, friendship, vassalage, slavery, morality, honor, law, philosophy, commerce, religion, greed, charity, violence, war and government; in short, much of the fabric of human life in society. It draws on the history and anthropology of a number of civilizations, large and small, from the first known records of debt from Sumer in 3000 BC until the present. It explores how debt has changed and been changed by the people and societies which have used it.

    A major argument of the book is that when the imprecise, informal, community-building indebtedness of "human economies" is replaced by mathematically precise, firmly enforced debts, widespread impoverishment and violence are common results which only a few societies have managed to escape.

    So, what most people took from the book appears to have been that it was an anthropological (shock!) history of debt and how it structures human relationships. This interpretation does not appear in the above review. Why? Apparently because the author chooses instead to think that the book is about capitalism. But, of course, that would imply that Graeber thinks that capitalism has been around for the last 5000 years! That, of course, is a rather hilarious and absurd thesis.

    So, no, I'm afraid I have to be a Graeberite here: Smith didn't understand the book. What is more, he didn't bother to engage with the most typical interpretation of the book. Rather he chose to write a snarky review that chimed with the opinion that he formed of the book before he read it. Does that manifest bias on the author's part? Only readers of this blog can determine that for themselves. To my mind it does.

    1. Thank God one of y'all showed up. I was beginning to worry Graeber had lost his army of fanbois and I had written that whole intro for nothing...

    2. Philip Pilkington10:48 AM

      No problem Smith. But let me repeat that so that you can get your head around it: the book is an anthropological history of how debt structures human relationships. This is what gives the book coherence. This is also widely recognised by others who have read the book and should be immediately obvious if you recognise that anthropology is the study of human interactions and relationships.

      Now, the above review is clearly personalised. You have spent three paragraphs reflecting on the personal characters of both Graeber and those who appreciate his work (that would include me presumably). This leads one to suspect a nefarious motivation within the review. The review opens with an attack on the characters of those who will disagree with the review. Thus the review has an aggressive overtone. Perhaps you should reflect on the idea that you didn't see the thread that lent the book coherence because you didn't want to. Perhaps you didn't want to because your review was motivated not by Reason but by Emotion.

      Just a thought. Now please carry on with your crude tribalism ("one of y'all") and ad hominems. I suppose that is the show that you put on for people on here. It's a bit like watching Fox News. It appeals not to the higher faculties, but to the Id.

    3. Anonymous11:27 AM

      I have to say, the more I come across Philip Pilkington's (and a few others in the heterodox sphere) writing, the less I care for the standard coterie of economics bloggers. It really does seem like Dr. Smith and others are using cheap tactics to stave off entirely legitimate criticism, and seeing it happen on the small scale makes me wonder how much bullshit they're peddling on the large scale.

      Has anyone ever seriously engaged with the whole "people aren't a fixed bundle of preferences, therefore utility theory is basically broken" argument yet? If they straw man David Graeber's writing on anthropology, they'll probably be terrified to attack that one head on.

      And no, I am not a sockpuppet. Just somebody getting fed up with the low intellectual standards in economics.

    4. Anonymous12:14 PM

      Another option, if you're confused about the thesis of a book, or how he sees debt as both a good and bad thing depending on context, is to - you know - see what the author has to say about it in secondary literature:

      "DG: So the real question is not how does barter generate some sort of medium of exchange, that then becomes money, but rather, how does that broad sense of ‘I owe you one’ turn into a precise system of measurement – that is: money as a unit of account? . . .

      PP: You have noted in the book that debt is a moral concept long before it becomes an economic concept. You’ve also noted that it is a very ambivalent moral concept insofar as it can be both positive and negative. Could you please talk about this a little? Which aspect is more prominent?

      DG: Well it tends to pivot radically back and forth.

      One could tell the history like this: eventually the Egyptian approach (taxes) and Mesopotamian approach (usury) fuse together, people have to borrow to pay their taxes and debt becomes institutionalized.

      Taxes are also key to creating the first markets that operate on cash, since coinage seems to be invented or at least widely popularized to pay soldiers – more or less simultaneously in China, India, and the Mediterranean, where governments find the easiest way to provision the troops is to issue them standard-issue bits of gold or silver and then demand everyone else in the kingdom give them one of those coins back again. Thus we find that the language of debt and the language of morality start to merge.

      In Sanskrit, Hebrew, Aramaic, ‘debt,’ ‘guilt,’ and ‘sin’ are actually the same word. Much of the language of the great religious movements – reckoning, redemption, karmic accounting and the like – are drawn from the language of ancient finance. But that language is always found wanting and inadequate and twisted around into something completely different. It’s as if the great prophets and religious teachers had no choice but to start with that kind of language because it’s the language that existed at the time, but they only adopted it so as to turn it into its opposite: as a way of saying debts are not sacred, but forgiveness of debt, or the ability to wipe out debt, or to realize that debts aren’t real – these are the acts that are truly sacred.

      How did this happen? Well, remember I said that the big question in the origins of money is how a sense of obligation – an ‘I owe you one’ – turns into something that can be precisely quantified? Well, the answer seems to be: when there is a potential for violence. If you give someone a pig and they give you a few chickens back you might think they’re a cheapskate, and mock them, but you’re unlikely to come up with a mathematical formula for exactly how cheap you think they are. If someone pokes out your eye in a fight, or kills your brother, that’s when you start saying, “traditional compensation is exactly twenty-seven heifers of the finest quality and if they’re not of the finest quality, this means war!”

      Money, in the sense of exact equivalents, seems to emerge from situations like that, but also, war and plunder, the disposal of loot, slavery."


    5. Pseudonymous12:30 PM

      If you find Pilkington and Yves Smith convincing, I have a great bridge to sell you.

      >Has anyone ever seriously engaged with the whole "people aren't a fixed bundle of preferences, therefore utility theory is basically broken" argument yet? If they straw man David Graeber's writing on anthropology, they'll probably be terrified to attack that one head on.

      Yes, a million times. In fact, it's such a dull and oft-repeated 'criticism' that I imagine most people, like me, have gotten tired of responding in detail to every special snowflake. At least Noah read the damn book. Can't you do your own background research?

    6. Hieronymous12:52 PM

      There we go again with the childish, cheap tactics (Yves Smith isn't credible? Really?). I did my own research; the answers I saw, I found wanting. I feel like the response to folks like Graeber and Pilkington is to call them names, pretend they aren't as smart as the orthodox, and treat any critique they make as soft-headed and unworthy of actual engagement. Yes, yes, you'd respond to Pilkington's utility theory critiques but they're just so DULL and OFT-REPEATED, and you have much better things to do!

      I frankly just don't understand how a group of people who completely failed both to predict the blindingly obvious (widespread fraud and massive asset bubbles will do bad things to an economy) and to articulate a coherent or workable response to the ensuing calamity can be so god damned smug. You really shouldn't be, there's no wonder millions of people are rejecting mainstream economic theory and looking for alternatives. The emperor is naked, as far as I can tell.

    7. Philip, I think you being dishonest here. Here is your summary:

      ...the book is an anthropological history of how debt structures human
      relationships. This is what gives the book coherence...

      Noah explicitly mentions that the book contains some (very
      informative) economic history:

      Debt is a sprawling, rambling, confused book, mostly about *economic
      history*, mixed with some political and moral philosophy.

      You want to pretend that the booking is not sprawling, rambling, and confused. But a look at the wikipedia pages also show what it takes to summarize the rambling...

      (1) A major argument of the book... [debts create] widespread impoverishment and violence.
      (2) A second major argument of the book ... contrary to stand accounts of the history of money (econ 101)
      (3) ...people with power have often established rules to benefit them and impoverish and enslave everyone else.
      (4) a Jubilee would cancel all debts but maintain most of the power and social status of existing elites.
      (5) The governing classes of the United States seem to have taken a remarkably similar approach...

      This is all *before* we get to the synopsis section of the page!

      If Graeber really wanted to be scientific about this, why not include some analysis of the benefits that debt provides to society (a way of transferring purchasing power, providing information through interest rates, etc)?

    8. Three live Graeber-ites, Noah! Think there will be more before the week is out? I'm almost surprised Graeber himself didn't show up to gaslight you like Philip, since he's been known to do that.

    9. Economics these days is a broken discipline, even though I have met some mainstream economists that I do not take issue with.

      Anonymous at 11:27, perhaps you might find of interest some of the work I draw on in this series of posts: http://robertvienneau.blogspot.com/search/label/Theory%20of%20Choice

    10. James8:18 AM

      "providing information through interest rates"

      what, information about who has power in society?

  9. This reminds me of Chariot of the Gods. A famous astronomer told us how we read the book, and although the astronomy was bullshit, the anthropology was interesting. Then he walked across campus, met a famous anthropologist who told him about this book, Chariot of the Gods, which though it was full of erroneous discussion of anthropology, had really interesting stuff to say about astronomy.

  10. Anonymous11:04 AM

    I'd really like to see a list of books that you do recommend.

    1. Anonymous11:28 AM

      Me, too.

    2. Your wish is my command. I will make one.

    3. Anonymous9:15 AM

      if you want recommended books you should take a look at Diane Coyle's book review blog. She reads 3 books before breakfast.....

  11. John S11:48 AM

    Instead of a debt jubilee, why not endorse Miles Kimball's plan: Federal Lines of Credit?

    "Imagine that the economy is in a recession and the President and Congress are contemplating a tax rebate. What if instead of giving each taxpayer a $200 tax rebate, each taxpayer is mailed a government-issued credit card with a $2,000 line of credit? ($4,000 for a couple.)"

    Kinda like a helicopter drop, but with the benefit that the govt gets paid back (and likely more reliable than QE at increasing NGDP in our low rate environment).


  12. Anonymous2:03 PM

    @klain leo

    You should probably also ask for SSN, IMHO.

  13. On Exactitude in Science . . . In that Empire, the Art of Cartography attained such Perfection that the map of a single Province occupied the entirety of a City, and the map of the Empire, the entirety of a Province. In time, those Unconscionable Maps no longer satisfied, and the Cartographers Guilds struck a Map of the Empire whose size was that of the Empire, and which coincided point for point with it. The following Generations, who were not so fond of the Study of Cartography as their Forebears had been, saw that that vast Map was Useless, and not without some Pitilessness was it, that they delivered it up to the Inclemencies of Sun and Winters. In the Deserts of the West, still today, there are Tattered Ruins of that Map, inhabited by Animals and Beggars; in all the Land there is no other Relic of the Disciplines of Geography.

    Suarez Miranda,Viajes de varones prudentes, Libro IV,Cap. XLV, Lerida, 1658

    From Jorge Luis Borges, Collected Fictions, Translated by Andrew Hurley Copyright Penguin 1999 .

  14. Thank God you wrote this. I tried reading this book and found to be, as you said, a rambling, confused, mess of a book. For the longest time I felt like I was an idiot or had ADD. You have redeemed that. Thank you Mr Smith! Thank you!

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    1. Unsure if that is troll or spam.

      Good review Noah. I gave up much earlier.

    2. It is spam, but now you made me keep it! 😉

  16. I'm pretty sure that ancient Jubilees were not universal - they excluded "commercial debt", such as the debt owed between merchants.

  17. Anonymous9:28 AM

    Hi Noah,

    Just wanted to thank you for writing this fun review :) I'm an econ grad student and actually bought a copy of the book to broaden my horizons and learn something new (since I spend so much time modelling debt anyways).

    But I had to give up pretty early on, and even the early sections of the book which you said were interesting were a real struggle for me, like swimming through a sea of shit (baseless assertions and random out-of-the-blue-angry-attacks on things) to find a few coins (or debt contracts, excuse the pun).

    So I'm pleased to hear that I didn't miss out on much by not reading the rest of the book, and shiver from the thought that it gets even worse later on.

  18. Anonymous9:38 AM

    Shame on you Noah Smith for contributing to the epidemic of social-scientist-on-social-scientist crime in this country! Be aware that there is nothing more frightening than an anthropologist with a blog.

  19. Anonymous10:06 AM

    Well, Noah, now you understand how many of us feel when we read your garbage about politics (if anyone still has the stomach to read it).

    1. Then why are you here exactly?

    2. Anonymous2:37 PM

      A combination of masochism and fascination at such hubris on public display (such as the tenth grade kid who shows off because he thinks he is witty but in reality has all the insight of a head of lettuce, not to insult lettuce). And the economics profession has plenty of hubris.

  20. Anonymous11:44 AM


    "Now, this may sound a little silly - if someone wrote a book called "Metal: The First 5,000 Years," and then filled that book with stories of war and bloodshed, never failing to remind us after each anecdote that metal was involved in some way, we might be left scratching our heads as to why the author was so fixated on metal instead of on war itself."

    Good on you!


  21. Noah: "Now, from interacting with David Graeber on Twitter, I have a sneaking suspicion that he is a certain type of Public Intellectual - the type who bristles with anger at the mildest criticism. This type of Intellectual will view any paraphrase of his ideas by a critic to be a total and utter misreading and misrepresentation of what he intended to say, no matter how close the paraphrase is to the original - deviate one word from exact quotation, and you're a Vile, Intellectually Dishonest Boor (V.I.D.B.) who obviously couldn't be bothered to read what the author actually wrote. As for exact quotations, those are certain to be out of context. Just as there is no physically exact model of the Universe except for the Universe itself, there is no representation of the Touchy Intellectual's thought that is accurate except for the Intellectual's own complete and unabridged oeuvre. (Paraphrasing by supporters and fans, of course, is perfectly legit, as long as their support and fandom is unqualified.)"

    So you start your actual review by writing a paragraph of insults which you even admit you have no facts to back up with?

    1. I'm with you Barry, this guy is trolling Graeber - hard to believe he's actually read the book. I was sent this post by a friend, and so assumed I was going to read smart original criticism. Nothing new here. The Apple/HP SNAFU is a dead horse. This onanist egoism was a total waste of my time.

    2. I agree that Noah is trolling Graeber but I don't understand why. The "Apple" incident makes it clear to any thinking person that Graeber is not worth paying any attention to of any sort.

  22. Anonymous4:42 PM

    ^ Well-fed troll (burp)

  23. In addition to the monetarists, much of this has been explored by economic historians like Larry Neal and Rondo Cameron. This is from the 1993 edition of their "Concise Economic History of the World" (I made the purchase in college and was too cheap to buy a new edition):

    "Before the invention of metallic coins many other commodities had served as standards of value, the most fundamental function of money, and also as a media of exchange. In an actual exchange it was not necessary for the standard of value to be physically present of to be a part of the exchange, as long as the commodities involved could be valued in relation to it. On this basis barter and even credit transactions had long preceded the use of coined money. The latter, nevertheless, greatly simplified commercial transactions and permitted the extension of the market system to many individuals and groups who would otherwise have remained isolated in a closed subsistence economy."

  24. I had been thinking that I needed to read Debt. Thank you for convincing me that I *dn not* need to eadit.

  25. Thanks for this great review. It's really very informative and might prove useful to what I am following now.financial advisor leadership

  26. Even the bits you praise don't exactly make for a good promotion. Sounds like another waste of trees.

  27. Hi Noah,
    I'm impressed that you've read the whole book. I think that most people wouldn´t do it for some Graeberites. But you've read the book and on this foundation you have written, an informative honest and fair criticism, which was very enjoyable to read.
    Thank you.

  28. Anonymous12:50 PM

    Have not read the book. You say the book lacks a coherent spine. That is a pity. However, if it does contain some useful information about how monetary systems actually work, it has more worth in helping to understand how the world works and how to solve problems of poverty than more than 500 pages of RBC or NK theory, for example, however coherent they may be.

  29. Philip P is right that the Wiki entry does a good job of encapsulating the thrust and approach of the book.

    He's also right that you missed that entirely.

    I'd be impressed and interested if you had acknowledged then engaged with that very cogent and coherent point. Since you didn't, I'm neither. (And I'm often both by your work; this is something of an exception.)

    I found the book very messy too, thus annoying. That's often/always true of good, wide-ranging anthropology. The lack of a crystalline theoretical structure constraining the observation is something of a virtue.

    His marxist slant gets in the way some, but it's like reading the Economist or driving on the left side of a crowned road where you know the crowning is consistent; if you just hold the wheel to the right, you go in a straight line.

    Also you should read Randall Wray on history of money and follow his footnotes. Much better anthropology/history than chatting with some "monetary" economists.

  30. Noah,

    You are a nincompoop. See this first:


    Say you somehow borrowed a million dollars (I will not give you!) and then took that interstellar flight on Virgin spacecraft and never came back because UFO fellows liked your glasses, who would pay your debt on this earth?

  31. This comment has been removed by the author.

  32. Anonymous1:54 AM

    Thanks for reading this so I don't have to. It's remarkable how many people think that ECON 101 textbooks represent the state of the art.

  33. Anonymous10:23 AM

    "Metal: the First 5000 Years" totally exists. Unfortunately, some editor insisted on changing the title to "Guns, Germs, and Steel."

  34. Brad Delong on Graeber:


  35. Anonymous3:06 PM

    Noah, I've not read Debt, I've no idea who the author is, I'm an economist, I'm fairly left wing and I believe that we need some form of capitalism (ie people should be allowed to own things).

    I think your being a bit harsh here though. And I think you may be indulging in bigging up you're objectivity. "Look at me, I'm tough on the austerity mongers but I'm tough on the lefties too."

    A more generous reading might be that more debt makes capitalism less good and we could organise ourselves to have less debt. Your paraphrasing suggests he has good arguments why this might be true.

    Also, the non industrious poor really don't hurt anyone in any real sense. If you assume that the people that produce things and pay taxes first must pay for the public services that they use before they start paying for the non industrious (or industrious) poor. You have to pretty rich before this happens, rich enough that it doesn't hurt you.

    And the implication that being industrious is in some way bad does not stem from that quote.

  36. "Graeber pours this old wine into a new glass."

    You're the worst person in all of history. The cliche you meant to write is "Graeber pours this old wine into a new bottle", which is a bad idea, rather than "old wine into a new glass" which is a pleasant after noon.


    I hope George Orwell comes back to life and kills your whole family.


    (note: maybe not _all_ of history, and maybe _some_ of your family doesn't entirely bare the blame)

  37. Anonymous4:49 AM

    Economists are obviously irritated that several other fields of academia has been studying the problems that has been their sole domain until now. But remember that this interest was piqued by the complete failure of economic orthodoxy in 2008.

    I think you are getting this about as wrong as is possible. Graeber's point is that credit was always the basis of economic transactions. And while you pretend that economists don't believe in the barter-to-money story that EVERY SINGLE TEXTBOOK on economics tells, the point would be that this intellectual edifice is completely worthless. There was never a time when physical money replaced barter - rather, credit systems arose long before the invention of anonymous, physical currency.

    You can whack him with your theories all you want, but empiry trumps theory every time. And right here we come to the crux of the matter: Empiry has disproven the FOUNDATIONS of economics. Economists like to tell us that even though we know their models are wrong, they are still useful in understanding the world.

    It's no wonder that academics from other fields feel free to explore your field, when your own approach is so shoddy.

    1. Anonymous5:02 AM

      And I'll add that for a large amount of professionals, 2008 put them in an impossible quandary: Admit that you don't know what you're doing, have no education of any consequence, and no tangible or useful experience.

      I think you should all just shut up. At the very least, stop your incessant bloviating.

    2. Actually, your comment exemplifies the problem with Graeber type narratives. Like Graeber, or because of him, you actually think that the barter narrative is an empirical fact in economics, upon which the "foundations of economics" have been developed. But this confusion may be the result of different methodologies in anthropology and economics. Barter is not important for having been true in the past. The concept is a useful way of thinking about money, credit, and liabilities. It's like imagining a wheel with corners as a method of thinking about the relationships between the road and the wheel's surface. It is trivial to note that cornered wheels are uncommon. The statement that "empiry has disproven the foundations of economics" when you are talking about the existence of barter economies is just a weird myth. Before making such statements, or including it in a book, why not talk to an economist and see if you are committed to a really silly thought?

  38. I wonder whether Graeber and his blog comment defenders are anomalies, or anthropologists really believe that the historicity of barter economies is a foundation of economics. That is just such a weird error that could have been avoided by looking at undergraduate econ 101 textbooks. Where are the evidentiary claims of bartering pasts? Mankiw? It is honestly mind boggling because I can't imagine that Graeber avoided ALL economists when writing his book. Some economist must have presented this idiosyncratic representation as mainstream. Seriously bizarre.

  39. There is an earlier book on debt by James Macdonald "A nation deep in debt: the financial roots of democracy. I am reading it now but much of it is going over my head. I wonder whether somebody can comment on it. There is an enthusiastic review by James Galbraith but the book seems to assume some detailed knowledge of European history and finance.

  40. Anonymous11:29 PM

    I haven't read the book nor do I care do, but your post and your further responses towards people disagreeing are an exercise in juvenile tribalism and are disgusting and you are another one of the many economists who are an embarrassment to economists everywhere.

  41. Real Music5:28 PM

    The worst part about David Graeber is that he is so annoyingly self-righteous, over-confident, and downright narcissistic.

    Just listen to him talk about his book on YouTube.

    He talks as if he has just descended from intellectual heaven to re-educate all economists, who are fools, plebians, an intellectual underclass.

    That is his tone and manner as he covers poorly structured ideas many of which are actually well-known to economists and have been for a very, very long time.

    Which makes it even worse. I mean if you are going to act like you are an intellectual guru, at least have the coherent, insightful ideas to match your attitude. He absolutely does not.

  42. If anybunny wants sprawling try the Crooked Timber seminar on Graeber. Makes the book look concise and occupies all possible parameter spaces

  43. I don't plan to read this book because it clearly makes too many mistakes to be taken seriously as a whole. I do like it's discussion of debt and the antropological origins of debt. I think Noah dismisses too much by saying that looking at capitalism through the lens of debt doesn't provide more insight into it's inherent flaws. I think it does.



  44. Anonymous8:18 AM

    Sorry to comment anonymously. Happy to give direct contact.

    I liked the book very much. Graeber answers several questions. 1. He answers the question of which came first. Money or debt. The question of the stability properties of debt. And he gives an historic appraisal of this issue. Your review seems mostly to say you didnt understand the book. Am I wrong?

    The last piece I read that was as insightful on the nature of money was by frank hahn - money and inflation.

  45. I think you underestimate how new some of the material is for a non-economist. As a fairly well read person I found a lot of the early part of the book (e.g, the bit about the myth of barter) genuinely revelationary. Even if the insights were already known to economics specialists there is a value to popularising them in a readable way. [I really enjoy his writing style, but I get the impression you don't, ymmv as always]

    I'll admit that the shift to the modern day isn't done as well though. In some ways it feels like two books, the last one somewhat rushed.