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(en) Anarkismo.net - Debt, Money, and Exploitation - Review of Debt: The First 5, 000 Years by David Graeber by Wayne Price
Thu, 16 Aug 2012 12:13:46 +0300
Book review of David Graeber's "Debt: The First 5,000 Years." A good history of debt,
credit, and money. Weaknesses in seeing debt as central to economic development,
downplaying role of human labor, exploitation, and class struggle. This leads to a
misunderstanding of the recent economic crisis, and to a limited and inadequate vision of
a post-capitalist future. ---- In “An Anarchist FAQ,” Iain McKay writes, “…anarchists
have, traditionally, been weak on…economics (which is ironic, as Proudhon made his name by
his economic critiques)” (2008; p. 13). This is why David Graeber, the anarchist
anthropologist, deserves praise for writing a major work on political economy. He has
written, he says, a “book [on] the history of money, debt, and credit” (2011; p. 212). “My
own aims are…to understand the moral grounds of economic life, and by extension, human
life…” (p. 89).
The book was influenced by the Great Recession of 2008 and following, which should have
been “…the beginning of an actual public conversation about the nature of debt, of money,
of the financial institutions that have come to hold the fate of nations in their grip”
(p. 15). “This book is a history of debt, then, but it also uses that history as a way to
ask fundamental questions about what human beings and human society are or could be like”
(p. 18). Graeber’s book is not only a history of debt and money, but also involves
questions of morality and of possible futures, “what human society could be like.”
I am reviewing this book from my own viewpoint. I am a revolutionary anarchist who has
concluded that Marx’s critique of political economy is the most useful economic theory for
understanding how capitalism works. This was the opinion of Bakunin and of many anarchists
since (see chap. 3 of Black Flame, Schmidt & van der Walt, 2009). I do not call myself a
Marxist, however, because there is also much in Marx’s theories with which I strongly
disagree, not to mention my rejection of the theory and practice of most of the post-Marx
Marxists. It is from this viewpoint that I critique David Graeber’s contribution.
Much of this book is very interesting as well as clearly written, lively and witty. It
covers an amazingly wide range of topics, over its “5,000 years.” This includes lengthy
discussions on the possible origins of money, the role of debt in various religions, the
relation of slavery to the beliefs of the “heroic” age, the origins of “please” and “thank
you,” temple prostitution, the interaction between early markets and early states, and
many other topics—which makes it difficult to review! Graeber avoids Eurocentrism, by
looking at economic developments on a world scale, covering the major regions of human
settlement as they evolved separately and together. Even when I disagree with him or (more
often) am not sure whether he is right, I find his writing thought-provoking.
Unfortunately, due to space limitations, I cannot write about most of the subjects he raises.
His book is best treated as a history of debt, credit, and money, and of the interaction
of these with other aspects of society (politics, family structures, ideologies: religion,
philosophy, and morality, etc.). From my viewpoint, stated above, I have no problem saying
that debt and credit are vitally important in economic history as well as today. “Credit
plays a central role in the most basic processes of capital accumulation and it lies at
the core of Marx’s account of the system” (Choonara, 2009; p. 100).
My disagreement with Graeber is that he makes debt and credit the main factor in social
development. I believe there is something even more central, which is human labor. In my
opinion, his view leads to a wrong analysis of the current economic crisis and to a
limited program for “what human society could be like.”
The Exploitation of Human Labor
This problem appears in his discussion of slavery. Graeber emphasizes the centrality of
slavery to social development. At certain times and places, slaves were even used as
money. Slavery was central to the self-conception of the “heroes” of certain societies.
Slavery laid the basis for modern economies. Graeber describes this important institution:
“…What is slavery?...Slavery is the ultimate form of being ripped from one’s context, and
thus from all the social relationships that make one a human being….The slave is, in a
very real sense, dead” (2011; p. 168).
This is true and even insightful. Yet it leaves out what almost anyone—even those who
never heard of anarchism or Marxism—would include: that slaves were forced to work, with
barely any return, for someone else. The whole point of ripping people from their social
contexts and making them legally dead was so that a minority (a boss class) could work
them like ill-fed animals, give them as little sustenance as possible, and then take the
results of their unpaid labor. In other words, the point of slavery was exploitation of
human labor. And the history of ancient slave empires, as well as of more modern chattel
slavery in North and South America, was a history of class conflicts between the slaves
and the master classes.
Marx could have been responding to Graeber (agreeing and disagreeing) when he wrote, in
Capital, vol. 1, “The class struggles of the ancient world took the form chiefly of a
contest between debtors and creditors, which in Rome ended in the ruin of the plebeian
debtors. They were displaced by slaves. In the middle ages the contest ended with the ruin
of the feudal debtors…. Nevertheless, the money relation of debtor and creditor that
existed at these two periods reflected only the deeper-lying antagonism between the
general economical conditions of existence of the classes in question” (1906; p. 152).
The “deeper-lying antagonism between classes” was that one class exploited the labor of
others. Slavery, serfdom, debtorship: these were all mechanisms for exploitation. It is
indeed valuable to analyze how these mechanisms worked, including the creditor-debtor
relationship. But we should never forget that the purpose of any of these methods was the
exploitation of labor.
Similarly, Graeber misstates the meaning of wage-labor under capitalism. He refers to
“…that most basic, dominant institution of our present economic life: wage labor” (2011;
p. 206). But he writes this in the context of discussing the legal philosophy of rights
and liberties. He writes that “a wage-labor contract is…[an] agreement between equals to
no longer be equal (at least for a time)…. It is the very essence of what we call ‘debt’“
Again, he understands everything about wage-labor except that it is a form of
exploitation. The whole point of the capitalist making the worker temporarily “unequal” is
to get the workers to work for a certain number of hours to produce the equivalent of the
workers’ wages and then to continue to work for several more hours, giving (essentially
unpaid) labor, producing “surplus value” (the basis of profit). If this is the “very
essence of debt,” then the essence of debt is exploitation of labor. (Of course, Graeber
knows that slavery and wage-labor exploit human labor; he just does not consider this to
be vitally important to their meaning.)
Graeber notes that “socialists…saw capitalism as the system whereby those who own capital
command the labor of those who do not” (p. 345). This is not his view, however. Graeber
notes that banks and bond markets and other financial institutions had come into existence
“before the rise of factories and wage labor itself” (p. 345) and therefore “capitalism”
can be said to begin before there was wage labor. There is no point in quibbling over
definitions. Certainly the early market economy developed all sorts of economic
apparatuses which paved the way for the eventual development of a fully capitalist
society. But a qualitative change occurred with the spread of wage-labor, which Graeber
has correctly called, “the most basic dominant, institution” of capitalism.
Graeber misunderstands what capitalism is. He describes it as “commercial society,” an
economy driven to expand its money, to growth and accumulate its wealth. A marginal few in
pre-capitalist economies sold commodities to get money in order to buy new (and more
desired) commodities. But capitalists, he says, take money to buy commodities in order to
sell these commodities for more money than they started with. Graeber applies this to
early merchants (who bought goods in one place in order to carry them to distant places
and sell them for a higher price due to their rarity). But such merchants (like the Polo
brothers) did not increase the overall wealth of society, they only moved it around. Under
capitalism (as Marx saw it), the industrial capitalists buy raw materials and machinery,
in order to combine them with the labor-power hired from workers. The labor of the workers
makes new things and new values, including unpaid-for surplus value. That is how
Commodities and Values
Graeber works his way through several theories of the origins and the nature of money. He
concludes, “…there is an unresolved debate between those who see it as a commodity and
those who see it as an IOU. Which one is it? ...It’s both…. Money is almost always
something hovering between a commodity and a debt-token” (pp. 73, 75). Yet his whole book
focuses on the nature of debt (credit) and says virtually nothing about commodities, what
they are and how they evolved. Is this because commodities cannot be discussed except by
acknowledging that they are objects and services provided by human labor?
Compare this with the very first paragraph of Marx’s Capital: “The wealth of those
societies in which the capitalist mode of production prevails, presents itself as an
immense accumulation of commodities, its unit being a single commodity. Our investigation
must therefore begin with the analysis of a commodity” (1906; p. 41). This is a different
concept of what capitalist society is and how it needs to be analyzed.
Together with his silence about what commodities are, there is Graeber’s silence about
economic “value.” Considering money, Graeber demonstrates that both the commodity
theorists and the credit theorists agree that the function of money is “to measure the
value of other commodities” (p. 44). “A gold coin is a promise to pay something else of
equivalent value to a gold coin” (p. 47). “What we call ‘money’…is a way of comparing
things mathematically, as proportions: of saying one of X is equivalent to six of Y” (p.
52). But to say that things are “equivalent” in certain proportions is to say that they
have equal (equivalent) values. What is this “value” that can be measured in terms of how
much each commodity has?
Marx believed that economic value, the exchange value of the capitalist market, was
different from the utility (use-value) of the commodity. The producing (and selling)
capitalists do not care what the use-value is of a commodity, so long as there is a buyer
who is willing to pay money for it. The exchange value of a commodity is the amount of
socially necessary labor time which went into each commodity (as modified by various
factors such as the average rate of profit, the effect of monopoly, short-term
fluctuations in supply and demand, etc.). Some sort of “labor theory of value” was almost
universal among pre-Marxist classical economists, including Adam Smith, David Ricardo, and
Proudhon. For example, Ben Franklin wrote, “Trade in general being nothing else but the
exchange of labor for labor, the value of all things is…most justly measured by labor”
(quoted in Marx, 1906; p. 59). Graeber rejects the labor theory of value but does not say
why. Nor does he suggest any alternate approach to value (such as the “marginal utility”
approach). In all this big book he has nothing to say about value in the market. (I see
that he has written a book which has “value” in its title. Whether it discusses this
topic, I do not know.) Yet again, he downplays the importance of labor.
In a footnote in the back of the book, Graeber makes a brief remark that he has “tried to
move away from the economistic framing of human life as ‘reproduction of labor’ that
hobbles so much Marxist literature—[my] emphasis [is] on life beyond survival…” (p. 453).
This from someone who has written a 450 page book in which, as he says, “I am mainly
interested here in economics” ! (p. 406). It is indeed wrong to make a crude, mechanistic,
analysis in which labor is directly all that matters and everything else would just be an
unimportant reflection. That would be “economistic.” But there is no reason why the
“reproduction of labor” cannot be seen as a major factor, influencing the rest of society
and being influenced by other social factors in turn (by politics, family structure,
social psychology, religion, art, etc.). That would not be “economistic.”
Graeber’s writing is weakest when discussing the causes of the current economic crisis. It
is sloppy and unbelievable. He states, “Presented with the prospect of its own eternity,
capitalism—or anyway, financial capitalism—simply explodes. Because if there’s no end to
it, there’s absolutely no reason not to generate credit—that is, future
money—indefinitely…. The period leading up to 2008 was one in which many began to believe
that capitalism was going to be around forever…. The immediate effect was a series of
increasingly reckless bubbles…” (p. 360). Apparently he is serious (he repeats this
Was the period before the recent period (say, the post-World War II apparent prosperity)
one where people did not believe that capitalism would be around forever? (I lived through
the 60s, and I can assure Graeber that most people, alas, thought capitalism was eternal.)
Did investors turn to “financialization” in the 80s because they had a new faith in
capitalism? Is there any evidence for these claims? If this was so, then why did the
bubbles ever pop? A sudden belief in the limitations of capitalism?
This view is based on nothing but speculation about mass psychology. It ignores the long
term trends (at least since about 1970) toward economic stagnation, overproduction,
unemployment and underemployment, underdevelopment and lop-sided development in the
oppressed nations, etc. There was a long-term tendency of the rate of profit to fall,
together with a growth of monopolization. These caused stagnation in the “real economy”
(the production of real goods and services), due to the decline of real surplus value
production. In response, capitalists increasingly invested in the “paper economy,” in what
Marx called “fictitious capital,” to produce paper profits (which turned out to be
unsustainable). Obviously this question would take much longer to explain and debate (see
Foster & Magdoff, 2009; Kliman, 2012; Mattick, 2011). At least this explanation is rooted
in real factors of labor and production.
His Vision for the Future
A major advantage which anarchism has over Marxism, is that Marx was quite vague about any
program for a society after capitalism, focusing mostly on current analysis and strategies
for change. By contrast, anarchists have offered visions for a new and better society, in
more or less detail. But not Graeber. “What I have been trying to do in this book is not
so much to propose a vision of what, precisely, the next age will be like, but to throw
open perspectives…” (p. 383). Tellingly, at no point in this book, does Graeber identify
himself as an “anarchist” or advocate “anarchism,” nor does he call himself a
“revolutionary” or advocate “revolution.” At the most, in a footnote, he vaguely remarks
that, rather than Marxism, “I am drawing here more on the alternate strain of
revolutionary theory, evident most famously perhaps in Peter Kropotkin’s Mutual Aid” (p.
However, if we look carefully at his book, we can find the basic principles which he
expects to apply to “the next age”. After all, what thinkers believe is central to
capitalism’s functioning will determine what they think is necessary to change in order to
abolish capitalism and the state. Marx, as well as anarchists of the broad,
class-struggle, tradition, believed that exploitation of workers was central to
capitalism. Therefore they advocated a cooperative, classless, society, without
exploitation, as central to the struggle against all forms of oppression. But if people
agree with Graeber that debt is basic to the functioning of capitalism, then they will
focus on the abolition of debt (or at least its limitation).
Graeber declares that all societies, past present and future, base their economies on
three “modalities.” “There are three main moral principles…all of which occur in any human
society, and which I will call communism, hierarchy, and exchange” (p. 94).
By “communism,” Graeber means that all societies rely on community, solidarity, mutual
aid, neighborliness, informal cooperation, and “love.” He specifically denies that
“communism,” as he uses it, has “anything to do with ownership of the means of
production…. The question of individual or private property…is often little more than
formal legality anyway” (p. 95). “’Communist society’—in the sense of a society organized
exclusively on that single principle—could never exist” (p. 95). However, Kropotkin and
other “anarchist-communists” of “the alternate strain of revolutionary theory” did
advocate a cooperative economy with the means of production held collectively (“in
common”). From this point of view, Graeber would seem to be rejecting libertarian communism.
What Graeber means by writing that there would always be “hierarchy” is not quite clear.
Is he denying that an egalitarian society is possible? Is he saying that some sort of
state is inevitable? Or is he just saying that even in a classless, egalitarian, society,
adults will have responsibility for children, some people may be more influential than
others among friends, and so on? Anarchists could accept the latter, but I am not sure if
that is what he means.
Exchange in the Market
By “exchange,” Graeber means a situation “in which each side gives as good as it gets” (p.
103). This may include exchanging gifts or barter or competitive commercial business.
“There’s always some sort of system of exchange” (p 385) which may be a market. Markets
can be good and noncapitalist, he claims. Graeber goes to great lengths to repeatedly
insist that “markets” and “capitalism” are not necessarily the same. “…The market [and]
capitalism (I must continually remind the reader that these are not the same thing)” (p.
376). “Markets, when allowed to drift entirely free from their violent origins, invariably
begin to grow into something different, into networks of honor, trust, and mutual
connectedness” (p. 386).
I agree that early markets (exhanges of commodities at the margins of society) were the
not the same thing as developed capitalism (when human labor-power became a commodity and
the whole of society was subordinated to commodity production). But capitalism developed
out of early commodity exchange (with a big assist by the state). A return to
pre-capitalist markets would only make likely the re-development of capitalism.
To continue to have markets, implies continuing to have money. Graeber states, “Money was
no more ever ‘invented’ than music or mathematics or jewelry….It’s probably as old as
human thought” (p. 52). If money is an aspect of human thought, comparable to music or
mathematics, then, like music and mathematics, presumably we can expect to always have money.
Of all the things he could raise, Graeber makes only one specific “concrete proposal….” It
is “…for some kind of Biblical-style Jubilee…” (p. 390). All debts, domestic and
international, would be forgiven (he does not say whether this should be periodic, as in
the Bible—every 7 years or every 50 years). This would, no doubt, be difficult to win.
“…Great imperial states have invariably resisted this kind of politics” (p. 390). Indeed!
I would think that to achieve such a demand would require the overthrow of the capitalist
class and their state. But anyway, Graeber concludes, “Nothing would be more important
than to wipe the slate clean…and start again” (p. 391). This last phrase is revealing.
Apparently debts would not be abolished forever; people would start over again,
Without going into detail, Graeber imagines a future society, without capitalism but
without common ownership of the means of production either, with some degree of hierarchy,
with some sort of market, with money, and with debts. This is not really a revolutionary
alternative to capitalism. It is the image of a cleaned up capitalism, without its bad
qualities (a good, communal, market, limited hierarchy, debts which are periodically wiped
David Graeber’s Debt, The First 5,000 Years, is an interesting and thought-provoking book.
It is worth reading as a history of debt, credit, and money. However, it has a mistaken
basic concept, that debt is at the center of human economics and society, generally
downplaying the significance of human labor (which was correctly emphasized in Marx’s
economic theory). For this reason, Graeber has a mistaken analysis of the Great Recession
and the current economy. He presents a limited and nonrevolutionary vision of a
post-capitalist future, quite in contrast to the revolutionary anarchist-communist
(libertarian socialist) program of Kropotkin and others.
Note: In the Fall, AK Press will publish a book by me on some of these topics. It’s
subtitle will be An Anarchist’s Introduction to Marx’s Economic Theory. It is an expanded
and revised version of material which has appeared on www.Anarkismo.net.
Choonara, John (2009). Unravelling Capitalism: A Guide to Marxist Political Economy.
London: Bookmark Publications.
Foster, John Bellamy, & Magdoff, Fred (2009). The Great Financial Crisis; Causes and
Consequences. NY: Monthly Review Press.
Graeber, David (2011). Debt: The First 5,000 Years. Brooklyn, NY: Melville House.
Kliman, Andrew (2012). The Failure of Capitalist Production: Underlying Causes of the
Great Recession. London: Pluto Press.
Mattick, Paul (2011). Business as Usual: The Economic Crisis and the Failure of
Capitalism. London: Reaktion Books.
McKay, Iain (2008). An Anarchist FAQ; Vol. One. Edinburgh, Scotland/Oakland CA: AK Press.
Marx, Karl (1906). Capital: A Critique of Political Economy. Vol. 1. NY: Modern Library.
Schmidt, Michael, & van der Walt, Lucien (2009). Black Flame: The Revolutionary Class
Politics of Anarchism and Syndicalism; Vol. 1. Oakland CA: AK Press.
*written for www.Anarkismo.net
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