This is a remarkable book, easy and even inspiring to read, written with a rare grasp of economic thought and different philosophic traditions, and informed throughout by fascinating anthropological detail as well as passion and compassion for humanity; it is also a mighty work of scholarship.
The global slump has reconfirmed our moral confusion about debt. Judges in some American states imprison poor debtors, sometimes indefinitely, but supposedly representative governments rescue multibillionaire profligates like giant private banks with unimaginable sums of our money, and then claim there is none left for healthcare or education. This is not new; rich18th-century English bankrupts led luxurious lives in debtors’ prisons, while their poorer fellow-inmates lived in filth and squalor.
Obligation, however, is as old as human history, and Graeber exposes two dominant myths. One is the shibboleth that barter preceded money. There is no evidence that barter, which has been used only rarely and for short periods in specific local crises, preceded currency. The point is that as symbolising beings we can keep accounts. We have only rarely traded pigs, sheep, cattle, or — in many ghastly examples of patriarchy — women as currency. Yet accounting and credit are very ancient, and Graeber traces them back at least 5000 years, to ancient Sumer.
The second myth Graeber dispels is that of our existence as a primordial debt. This makes being itself a commercial transaction; Hindu priests turned debt to the gods into debt to institutionalised religion, and Hindu patriarchs made it into debt to our parents, particularly fathers. The Soviet Union used a similar idea to make emigration virtually impossible, and extreme nationalists use it for their own ends. Yet the very idea of this debt is incoherent, as nothing could count as repaying it.
Historically, the advent of coinage around 600 BCE, during what Graeber, following Karl Jaspers, calls the Axial Age, wrought a major transformation. Expanding armies had to pay for local supplies and services, including prostitution, but without the problems of long stays and involvements. States too expanded, as did military power and violence, not least in India and China, and exchange as between commercial equals could only be imposed through enormous, even genocidal, violence upon existing societies.
The emerging states, human creations themselves, created markets, with which came forms of moral and epistemological materialism; even people became tradable objects. By 1760 the Tiv of West Africa were deterring slave-traders, who were often indebted themselves, by painting their own faces to look as if they had smallpox, and they used British-manufactured brass rods as currency only for external trade, so that they did not commodify people.
The new type of exchange, however, was and is highly seductive and viciously reductive; it may simplify moral evaluation, but it forces us to think all human contact can be turned into it — or that it is the whole of human contact. All imperatives except profit disappear; the English and Dutch East India companies, the first major joint-stock corporations, combined exploration, conquest, and extraction in exactly the same way as the Spanish conquistadors did in the western hemisphere. Among the latter, debt, as it had been among the Crusaders, was a powerful driver. In 1520, Hernán Cortés, hugely in debt, both cheated Moctezuma and slaughtered a hundred thousand Aztecs in order to pay off his debts with Aztec gold; he killed tens of thousands more than did the diseases the conquistadors carried. Moreover, the plundered gold and silver did not remain in Europe, where coin was in short supply; the metals paid for trade with India and, particularly, China; the expanding Chinese economy kept Europe from becoming saturated with American silver and losing its incentive to colonise the Americas.
Graeber provides much illumination. The Middle Ages are only dark ages if seen through the lens of western Christendom; paper money had been invented far earlier in China, where promissory notes appeared in 806 CE, to save journeying traders from carrying bullion. Cheques (‘ sakk ’) were invented in the Islamic world, where contracts were a matter of honour, not documents and enforcing bodies. Furthermore, Adam Smith may well have drawn his invisible hand from the Prophet’s idea that prices are God’s will; he may also have plagiarised his dog example and the pin-factory division of labour from Ghazali and Tusi, quite apart from using an unacknowledged version of the epistemology devised by his friend David Hume. His idea of individual self-interestedness would probably have been unintelligible to the ancients too. Just as pertinently, several religions banned interest, because usury makes money an end in itself; interest becomes not a rental but a penalty for the loss of money the lender might have made elsewhere.
Furthermore, exchange as the bourgeois mercantilists of Smith’s time conceived it is a middle-class phenomenon. Where big corporate money is involved, or organised crime, the pattern is exemplified by George W. Bush’s brother Neil, who testified in divorce hearings that when he went abroad on business a young woman would appear in his hotel room to facilitate the deal. The woman may herself have been a debt peon, paying off family debts; much high-level business legitimate or illegitimate has always been conducted thus, with status, honour, and slights real or imagined forming a lethal combination of big money and organised violence.
Graeber concludes with the 1971 United States decision to abandon what remained of the gold standard. The U.S. dollar became the world’s reserve currency, as the gigantic U.S. trade deficits mean that foreign central banks can do little with any surplus dollars except buy U.S. Treasury bonds. These will never be cashed; the U.S. remains a colossal debtor, enjoying, in Michael Hudson’s words, a “tax imposed at the entire globe’s expense.” Washington maintains its free ride and budget deficit with global terror; its “extraordinarily expensive” weapons, surveillance equipment, and propaganda systems produce nothing. Deficit spending supported the Viet Nam war and the Iraq invasion, and the United States can use deadly force anywhere on the planet.
While Graeber locates modern capitalism’s origins in England some centuries before the industrial revolution, he is clear that our condition is not a break with the warrior-financier alliance on which the system is founded, but its “ultimate apotheosis.” States, therefore, help financiers to force us into debt if we try to live beyond bare survival; in 1980, the U.S. removed its 10 per cent cap on interest rates, and the much-vaunted South Asian microcredit schemes have been a moneylenders’ dream. For capitalism, sociality itself is abusive, criminal, and demonic.
It seems nevertheless that when capitalism looks immortal it implodes. Resistance is now well under way; in 2000, East Asian countries started boycotting the International Monetary Fund, and in 2002 Argentina defaulted with impunity. The late President Hugo Chávez of Venezuela effectively supplanted the IMF and the World Bank by using oil revenues as loans to other Latin American states, many of which have already repaid Venezuela. We can start seeing ourselves again as historical actors, as reasoning beings for whom exchange is only part of human engagement. Historically, mass indebtedness has led to mass uprisings, after which debts have been written off. Graeber, a founder member of Occupy Wall Street and the inventor of the rallying-call “We’re the 99 per cent”, truly speaks to an age poisoned by debt and by the fear billions have for their future, and he shows us that we can start to take a fresh grasp of ourselves. Could this book be our counterpart to something written in the reading room of the British Museum a century and a half ago?
( Arvind Sivaramakrishnan is senior deputy editor with The Hindu )