Debt – The First 5000 Years

Title: Debt – The First 5000 Years

Author: David Graeber

Publisher: Allen Lane, 2012 (First published 2011)

ISBN: 978-0-670-08652-8

Pages: 391

Debt is something we normally avoid, if at all possible. All moral and religious teachings exhort people to shun debt and promptly repay what we have borrowed. If they don’t, the creditors have the force of law behind them to seize and imprison the debtor or to forcefully take his possessions away. David Graeber examines the origins of this custom right from among the misty mornings of recorded history to its growth and development as witnessed in post-2008 financial markets of the United States. In this process, the book gives us a glimpse of world history, theories of economic development and anthropological case studies. The author’s selection of Greece, China and India for studies on ancient societies make the book appealing to serious readers interested in the social and economic development of Asia. Graeber teaches anthropology at the University of London and has authored several books on it and anarchy. In the summer of 2011, he worked with a small group of activists to plan Occupy Wall Street. Perhaps this rebellious trait is only too visible in the book’s story line, as he has wasted no opportunity to counter established wisdom – even the most basic parameter itself. His negation of the existence of barter as a mode of economic exchange ever, in societies is shocking, to put it mildly. But the book is very tedious to read. Graeber’s style is perhaps a bit too scholarly in that it puts off many readers due to unattractive content. It was sheer hard work, to finish reading the book!

The book begins by challenging the dictum of economics that before money was invented for commercial transactions, a system of barter existed in primitive societies. Adam Smith’s assertion on the existence of barter is accepted as received wisdom by scholars ever since his epochal ‘Wealth of Nations’ was published in 1776. But Graeber contests the postulate with his cleverly crafted argument that barter, in its pure sense, never existed in any society. Laden with the rich storehouse of anthropological studies, he goes on to provide many examples and logic to link all the parables he could muster, about primitive societies living in far-flung corners of the world that didn’t resort to barter. Money preceded barter, that is, barter was practiced in populations which had previous experience with money in the form of cowry shells, heads of cattle, number of slaves or precious metals even. When money is involved, debt also originated and the distinction between debt and obligation is spelt out. What makes debt different is that, it could be quantized, while obligation is more or less a moral concept. Graeber  gives a concise analysis of debt originating at three levels in ancient societies – primitive communism, hierarchy and exchange. All religious morals start with the assumption that men are equal, at least in spirit. Debt involves a temporary loss of that equality. Only when the debtor returns the favor does the original state of equality is redeemed. The author also notes a slew of commercial terms like debt, redeem, creditor, and such appearing in religious discourses often designed to heap scorn on the materialistic nature of these same commercial transactions. Becoming a debtor is treated like turning a criminal or a guilty person. The etymological origin of the term ‘debt’ in all European languages is from words reflecting on such grave ideas like ‘sin’ or ‘guilt’.

Graeber puts forward an analysis of world history through the perspective of debt. This effort is scholarly and the power of intuition and rationalization deserves acclaim. He divides history into four periods – First Agrarian Empires (3500-800 BCE), Axial Age (800 BCE – 600 CE), Middle Ages (600 – 1450 CE) and Great Capitalist Empires (1450-1971 CE), and then narrates how money played varied roles in each phase depending upon availability of precious metals for circulation. We may wonder why he has selected 1971 as the end of the age of Capitalist Empires. It was in this year when the United States brought its currency out of the gold standard. All relations between the currency and precious metals died at that point and the currency became valuable only upon the assurance of the government issuing it and guaranteed by its military prowess. Age of virtual credit dawned around this period and only a cursory narrative is given by Graeber.

Development of money as a medium of exchange occurred for the first time when trained professional soldiers took up positions in ancient armies. They were paid in kind, in the form of coinage made from loot of gold and silver acquired through wars. The kings then demanded that their taxes on the populace be paid through the medium of these coins. Naturally, for the lay people to get hold of the coins, they would have to render services and supply goods for the soldiers who possessed the currency. Keeping upon his track of rebellious tirades against established concepts, Graeber rubbishes the claim that the Middle Age was a period of darkness, by arguing that shortage of supply of money due to hoarding it up in Cathedrals, monasteries and temples had the salutary effect of the rise of virtual credit systems again.

The iconoclastic beginning of the book that, or at least claim to, shatter the roots of modern economic thinking originated from Adam Smith’s magnum opus makes the whole argument to be examined with a touch of skepticism.  I am not familiar with anthropology, to which genre this book belongs. But if such a work originated from science and its first principles and then went on to rubbish them, it would be relegated to the category of pseudo science and that would be the end of it, as far as readership is concerned. So, in that sense, can this book be classified as ‘pseudo economics’? I can’t say, that’s for experts to decide. But, when we learn of the author’s attacks on stock markets, venture capitalism and the established canons of international finance, we genuinely get compelled to keep the tome at arm’s length.

Even though India inherits the legacy of a great and ancient civilization, much of its development through the Bronze Age could not be studied, as the script is still not deciphered.  As a result, western authors more or less bypass the stream of knowledge from India and rarely look east of Greece. Some Orientals may cast a glance on China, which would be all about ancient civilization. Graeber proves a delightful contrast on this point. He had obviously read a great deal about India and her past. When presenting evidence for his theories as examples from historical societies, India is always included to prove convincingly that our own country, though different in many respects, invariably followed the universal trend in matters of slavery, coinage and warfare, to mention a few. This makes the arguments relevant to all parts of the globe.

As for the reading experience, this book is a sheer waste of time for most classes of readers. In fact, I am at a loss to point out any category of people who would find this book appealing. The title and layout are really eye catching, but that must be recognized as a trap. At the end of it all, we still doubt what the author had intended to convey. A lot of data is there; a great chunk of world history is there; a bit of anthropology too; but to what purpose? It is neither an economic history of money nor an anthropological chronicle of debt. The language is terse and rhetorical in most places, the only relief appearing occasionally as quotes from Nasiruddin Hodja’s stories. No amount of persuasion would prompt me (at least) to read the book again.

Even with all these pit falls, the author has produced some very nice generalizations, such as ‘Honour is Surplus Dignity’, ‘Wage labour is renting of one’s freedom, slavery is the selling,’ and the like. The book is endowed with a huge section of Notes, Bibliography and Index, which constitutes almost a quarter of the total volume. May be this is an indicator of the appeal of the book to general readers, whereas it is invaluable for serious readers and reference –seekers.

The book is not recommended.

Rating: 2 Star