Thoughts on David Graeber’s ‘Debt: the first 5,000 years’

Thoughts on David Graeber’s ‘Debt: the first 5,000 years’

I finally finished this book after reading it on and off for months. First, I'll say this is a very unsettling book. By this, I mean it makes you think again about things you thought you knew already, and can't be easily assimilated into an existing worldview. For that reason alone, it's worth reading.

What follows isn't really a review, but some thoughts on some of the concepts put forward and ideas raised in the book. Nor am I going to summarise the arc of the book's main arguments. If you've no idea what the book is about, there's a summary by Graeber here, an interview about it here, and a smack-down on some free-market critics here which give a pretty good idea.

This is a great trap of the twentieth century: on one side is the logic of the market, where we like to imagine we all start out as individuals who don’t owe each other anything. On the other is the logic of the state, where we all begin with a debt we can never truly pay. We are constantly told that they are opposites, and that between them they contain the only real human possibilities. But it’s a false dichotomy. States created markets. Markets require states. Neither could continue without the other, at least, in anything like the forms we would recognize today. - David Graeber, Debt

Communism, exchange and hierarchy

The first thing I'd like to pick up on is Graeber's claim that all societies are a configuration of three fundamental organisational/moral principles: communism, exchange and hierarchy. What Graeber calls 'baseline communism', the giving according to abilities and receiving according to needs, is he claims, the "the foundation of all human sociability", the very condition of possibility of society itself. He writes that "The surest way to know that one is in the presence of communistic relations is that not only are no accounts taken, but it would be considered offensive, or simply bizarre, to even consider doing so." I like this formulation, and it echoes a line a line of argument I made in the libcom vs parecon debate. But there's a sting in the tail. By the same token, Graeber argues that this is rarely the whole story, and there's a tendency for communism to slide into other forms of society.

These involve exchange and hierarchy. Exchange, for Graeber, implies equality between the parties. But it doesn't necessarily mean commodity exchange, i.e. the obligation isn't necessarily quantified. So in many stateless, non-commercial societies, you simply admire the thing you want ('What a lovely pig!') and the possessor makes a gift of it. You don't owe a pig in return, but an obligation of roughly equivalent status (Graeber says there are broad categories of object, e.g. everyday objects and sacred objects, which aren't commensurable with each other). So for example, Marcel Mauss' work on 'The Gift' explores this kind of exchange. Commercial, market exchange, is of course something we're familiar with. The difference between the two is the difference between 'cheers mate, I owe you one' and 'thank you shopkeeper I owe you £1'. Furthermore, the temporal disjunction in gift exchange creates 'debts'1 and therefore social bonds and solidarity, whereas the immediacy of commercial exchange creates no ongoing obligations, and is therefore the form of exchange appropriate for strangers - or enemies. So for example, stateless societies have often been communistic internally, but practised forms of gift exchange in their relations with other groups. Graeber explores this in some detail, which I won't repeat here.

Finally, hierarchy. Hierarchy is not necessarily the formal hierarchy of organised violence of the state, but may also be informal and based on status. Graeber, following Mauss, argues that gift exchange is often a competitive contest for status, with the party who gives the most attaining the highest status. It is in this sense that purely communistic societies are always prone to these alternative moral logics, which could transform a communistic society into something else if not kept in check (this is part of the role of ritual in 'primitive' societies, which it turns out, are in fact rather complex). So for example, communistic relations apply to the in-group, but that has never (yet!) been all humanity. Between in-groups, exchange arises, and this carries with it the tendency to hierarchy. There are other permutations, but this is the kind of analysis these concepts give rise to. I'm not entirely sure what to make of this, but I do think it's highly thought-provoking. I also suspect Graeber is playing a double-move given the US context: first establishing that communism is the ever-present basis of society, then playing down the idea of a communist society. In the context of 'communism' being a dirty word, this may well be a tactical move to provoke US readers (and others) into rethinking what communism is, and perhaps warming to it, without having to admit to being 'commies'.

The distinction between ‘human economies’ and ‘commercial economies’

The second thing I want to pick up on is Graeber's conceptual distinction between 'human economies' and 'commercial economies'.

Graeber wrote:
Often, these currencies [yams, shovels, pigs, jewellery] were extremely important, so much so that social life itself might be said to revolve around getting and disposing of the stuff. Clearly, though, they mark a totally different conception of what money, or indeed an economy, is actually about. I’ve decided therefore to refer to them as “social currencies,” and the economies that employ them as “human economies.” By this I mean not that these societies are necessarily in any way more humane (some are quite humane; others extraordinarily brutal), but only that they are economic systems primarily concerned not with the accumulation of wealth, but with the creation, destruction, and rearranging of human beings.

By contrast, "historically, commercial economies — market economies, as we now like to call them — are a relative newcomer." I think this distinction is quite an interesting one, and in many ways parallels Marx's notion of 'commodity fetishism', with commercial economies being those where "the relations connecting the labour of one individual with that of the rest appear, not as direct social relations between individuals at work, but as what they really are, material relations between persons and social relations between things." (Karl Marx). In other words, commercial societies, specifically capitalism, pose a fundamental ontological inversion, where "capital subjectivizes itself through the subordination of human ends and purposes to its own self-expansion. Like a vampire, it is dead labour preying on the living." This inhuman force then governs and restructures social life (though not without resistance). Communism then, from a libertarian communist perspective, would be something like seizing back control of society from this inhuman force, and instantiating social relations based on human beings and our needs. In Graeber's terminology, libertarian communism would be a form of human economy (as well as perhaps the movement that prefigures it).

However, Graeber also makes what I imagine will be a controversial argument about Medieval Islam and free markets. Throughout the book, Graeber points out that the common sense view of 'market' and 'state' as diametrically opposing forces is false, and that "historical reality reveals (...) they were born together and have always been intertwined." Consequently, he is dismissive of the economists' idea of the free market, since markets are underpinned by state force, and historically were created by state action (typically taxation to raise armies to wage war). However, in Medieval Islam, Graeber does identify something like a true free market, that is, a market without any state involvement. But here, without the force of the state, the only guarantee for commercial activity is honour and trust. In the absence of coercion, market relations tend to be reabsorbed in the web of social relations, a 'moral economy', regulated by custom and reputation, and thus based more on co-operation than competition. Thus, paraphrasing the work of the Islamic scholar Tusi (1201-1274 AD), he writes that:

Graeber wrote:
The market is simply one manifestation of this more general principle of mutual aid, of the matching of abilities (supply) and needs (demand) - or to translate it into my earlier terms, it is not only founded on, but is itself an extension of the kind of baseline communism on which any society must ultimately rest.

This is certainly a provocative argument: markets are communist! To be clear, this is not Graeber's argument, so much as his summary of Tusi's. However, it isn't as paradoxical as it sounds. Graeber's argument is that without state power, commercial economies tend to revert to more human ones, with honour, trust, mutual aid and co-operation replacing coercion and competition (more on this below). I also suspect there's a hint of provocation here to the US right: finding the only example of functioning 'free markets' in the writings of Islamic scribes. There's also a hint of Karl Polanyi's 'double movement', where the 'self-regulating market' comes up against a counter-movement to subordinate it to social needs (Karl Polanyi, from page 88 of the pdf). I'll pick up on some of the implications of this below.

Marx, critique and utopia

David Graeber wrote:
Karl Marx, who knew quite a bit about the human tendency to fall down and worship our own creations, wrote Das Capital in an attempt to demonstrate that, even if we do start from the economists’ utopian vision, so long as we also allow some people to control productive capital, and, again, leave others with nothing to sell but their brains and bodies, the results will be in many ways barely distinguishable from slavery, and the whole system will eventually destroy itself. What everyone seems to forget is the “as if” nature of his analysis. Marx was well aware that there were far more bootblacks, prostitutes, butlers, soldiers, pedlars, chimneysweeps, flower girls, street musicians, convicts, nannies, and cab drivers in the London of his day than there were factory workers. He was never suggesting that that’s what the world was actually like.

The final point I want to pick up on is Graeber’s reading of Marx. Graeber is at pains to point out that Marx's Capital is not a critique of actually-existing capitalism, but a critique of the capitalist utopia imagined by the political economists (Adam Smith, David Ricardo and so on). He even goes as far as to claim capitalism is not in fact based on wage labour. Now, few if any posters on libcom would have a closed, economistic reading of Marx. After all, we all know that Marx was writing a critique of political economy and not 'economics': he was critiquing the claims made by capitalism's ideological supporters, not claiming to describe how capitalism actually works. Implicit in Graeber's argument seems to be the idea that Marx's immanent critique needs to be supplemented by an external critique in order to properly situate and understand actually-existing capitalism and its relationship to other social formations. An anthropological perspective, and some of the conceptual distinctions discussed above, are a way of doing that.

What does this mean for our understanding of capitalism? I contend that plenty of us on libcom, and I've certainly been guilty of this, do tend to take Marx as describing actually-existing capitalism even when we know otherwise. Now in a sense, I think this is in part because Capital does do this (e.g. Marx's lengthy quotes from newspapers and parliamentary reports into working conditions are describing real-world capitalism, not the utopia of the political economists). But to the extent we take Marx as criticising actually existing capitalism, we also implicitly accept the political economists reductive, bourgeois assumptions about human beings and society, assumptions which Marx only provisionally adopts in order to explode political economy from within. Why, for example, would we think 'the tendency of the rate of profit to fall' could explain the current crisis, unless we thought Marx's Capital described actually-existing capitalism? I think there's several implications to this, though I've yet to fully work through them all.

First, in taking Marx's Capital as a critique of actually-existing capitalism, we could well be overstating the power of capital (and thus understating our own power). For example, the arc of Marx's Capital begins with commodities and shows how commodification implies class society. There's a tendency to deduce therefore, that any time anything exchanges for a price, capitalism will be reproduced, rising vampire-like from the dead to once more suck the blood of the living. Graeber sees it very differently. In the absence of state power, market exchanges tend not to give rise to the inhuman monster of capital (markets, and even wage labour, after all, have existed far longer than capitalism), but rather tend to be re-absorbed into a moral economy of a human society, a society to which Marx's account doesn't apply (e.g. Graeber's example of Islamic 'free markets' discussed above).

The consequence is significant. Rather than seeing every exchange for a price as the seed of a resurgent capitalism, Graeber sees exchange as tending towards being embedded in social relations and a moral economy unless this is actively prevented from happening by state power. So in this sense, something like a 'free market' anarchism wouldn't resemble a commercial market at all, but something closer to a gift economy, with everyone taking what they need on trust then settling up in periodic 'reckonings', with account taken for inability to pay.

To be clear, Graeber does not advance this as his favoured society, and my description is drawn from his discussion of the village economies of Medieval England (which he cautions not to idealise). But nonetheless, the implication is that by ignoring the tendency of human society to reabsorb commercial relations into social ones, to ignore "religious ideas, ethical concepts, customs, habits, traditions, legal opinions" as well as the more familiar "political organisations, institutions of property, forms of production, and so on" (Rudolf Rocker), we overstate the resilience and durability of capitalism. In other words, without an anthropological perspective, we tend to over-state the power of 'the market' and the naturalness of capitalism, even while we think we're critiquing it (a form of capitalist realism, perhaps?). An unsettling thought.

If we accept this line of argument, it would suggest we could be worrying too much about things that look too much like commodity exchange leading to the restoration of capitalism (e.g. the various alternative currencies during Argentina's economic crisis of 2001, or the voucher systems used in parts of revolutionary Catalonia in 1936). Rather, it is state power which is pivotal in reconstituting these exchange systems into commercial, commodity markets rather than them being reabsorbed into webs of social relations based on needs, mutual aid and so on. I'm not sure what I make of this, but it's an intriguing reversal of conventional libcom wisdom. Rather than capital being the all-powerful hydra that regenerates from the smallest stumps of market behaviour, rather all societies are based on a basic communism which threatens to assert itself whenever state power recedes, re-embedding markets into webs of mutual aid which could render the commodity form obsolete, superseded by direct social relations and bonds of honour and trust.2

Second, Graeber provocatively picks up on this to explain the current crisis. He argues that only while we could imagine capitalism as a historic system that had a beginning and must have an end was it possible for the cycle of boom and bust, and particularly for speculative bubbles of credit and debt, to function. Now that capitalist realism rules, the whole economy breaks down because the idea of endless expansion of debt makes everything go nuts:

Graeber wrote:
In other words, there seems to have been a profound contradiction between the political imperative of establishing capitalism as the only possible way to manage anything, and capitalism’s own unacknowledged need to limit its future horizons lest speculation, predictably, go haywire. Once it did, and the whole machine imploded, we were left in the strange situation of not being able to even imagine any other way that things might be arranged. About the only thing we can imagine is catastrophe.

This is very closely bound up with Graeber's claim that "there is very good reason to believe that, in a generation or so, capitalism itself will no longer exist". The triumph of capitalism has rendered it dysfunctional. The expansion of debt is only tenable if it is considered to be finite. As soon as we think capitalism will last forever, it necessarily goes into crisis. And at the same time, we're running up against ecological limits... It takes an anthropologist to draw attention to the importance of beliefs, norms, customs and so on in understanding what economists claim is the hard science world of 'the markets'. I can't say I'm convinced by Graeber's specific diagnosis of a belief in eternal capitalism causing the global economic crisis. But again, it's a provocative thesis, and forces us to think about the role of culture and beliefs in determining economic processes, in addition to the more familiar approach of doing the opposite (either approach, alone, would be reductionist).

Finally then, Graeber offers one concrete proposal, in a book which is meant more to change paradigms than set out blueprints: a debt jubilee, i.e. a mass cancellation of debts to allow the system to start up again. This is inspired by the ancient Babylonian practice, which periodically saw debts wiped clean and debt-slaves released. Graeber even points out that the first recorded word for 'freedom' means literally 'return to mother', referring to the liberation of debt slaves during periodic jubilees. Frankly, it's quite a disappointing conclusion. For one thing, Graeber proposes debt cancellation (a policy to be implemented by those in power) and not a debt strike (a tactic to be employed by the powerless). I suspect this comes from academic habit. Even when I was at university, there was a pressure on students to frame arguments in 'policy relevant' terms, i.e. aimed at making suggestions to the ruling class. I suspect this pressure is even stronger on academics. All that said, the book does not aim at concrete tactical proposals and should not be judged on this basis. 'Debt' is a wide-ranging and provocative read which manages to be both accessibly written and intellectually challenging, and is certain to make all but the most hardened dogmatists re-examine things they thought they already knew.

  • 1. The problems caused by quantifying and moneterising these debts is one of the main themes of the book.
  • 2. The caveat here is the human society and moral economy wouldn’t necessarily be one libertarian communists would find desirable. As I’ve said, Graeber’s at pains to point out human societies are not necessarily humane societies. I guess this is where the importance of prefigurative struggles comes in: establishing the norms which will rule with the supersession of the state-market complex.

Posted By

Joseph Kay
Jan 3 2012 19:09


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Tom Henry
Jun 26 2017 07:51

You might be interested, if you haven't seen it, in the way this thread is developing:

Tom Henry
Jun 27 2017 01:40


Hopefully what I have written below goes some way toward constructing a framework to use for investigating your question. My post here is not to do with the Graeber thread itself, only a response to your questions.

Capitalism (the acquisition of absolute and relative surplus value from a labor force) was definitely an innovation of traders and merchants. For example, in the seventeenth century it was traders who dominated the English coal industry, and one of the earliest examples of the factory system was instituted in the same century in the silk mills of Northern Italy by merchants. I get this information from Jairus Banaji, see below. Marx (in Capital Vol 1 1976 Fowkes page 554), also notes the revolts against ribbon-loom machinery across Europe in the same century, and the destruction of a wind powered saw mill near London in the 1630s.

But capitalism is more than a market economy and there is a decisive break in the pursuit of wealth and power that occurred around the seventeenth century.

Agrarian historian Jairus Banaji, in Theory as History: Essays on Modes of Production and Exploitation (2010), explores the complexity of your question by investigating the assumptions used to define capitalism based on the form of exploitation of labor. Here we discover that differing forms of production, such as that based on slavery, or the feudal-serf model, can, in his view, exist as capitalist operations. This is because for a productive unit to be described as an individual capitalist enterprise, the condition of the producers of surplus value, i.e. the labourers, is irrelevant. Whether workers are slaves or peasants or hired labour is not the issue for defining a capitalist enterprise which may exist outside of the capitalist mode of production. It is merely the fact that profits are used to generate even greater profits by investing in improved production methods, and that money is not left idle. Furthermore, in these capitalist formations prior to capitalism as the dominant mode, wage labor does not have to be defined by money. Where all the means of production are supplied by the employer, as in share-cropping, for example, wages can be paid in the form of a portion of a crop produced. Banaji’s key point, following Marx, is that capitalist formations can exist prior to the capitalist mode of production. Prior to capitalism as the dominant mode, individual capitalist operations can exist and operate with the use of unfree labor that is not necessarily selected from a market. It is only when capitalism becomes the whole economic system that workers in general, necessarily and simultaneously, become fictitiously free (waged labor), by being made available for hire in a market place.

Labour power is a commodity that, if surrounded by the right machines, the right links in a productive chain, and the right social organization, can be used to generate what has now been experienced as limitless wealth. This commodity, or object, that people became in capitalism meant that they had become an object like any other object and a thing like any other thing that can be bought and sold, but which, unlike other objects, and this is what makes them special, can be made increasingly productive and can be used to generate ever more wealth. The value of products can be increased if the productivity of the labour power employed to produce them can be improved. That is, the cost of making products is driven down by deploying human labour power in ever more efficient ways.

The conscious generation of this value is the key underlying feature of the capitalist economic system and was termed by Marx the acquisition of “relative surplus value.” The extraction of surplus value based on simply making people work harder and longer but for less remuneration, termed absolute surplus value, comes up against predictable limits. But development in social organization and technology, driven by the rational goal of increased profit via the introduction of mechanics that increase productivity is only constrained by a lack of imagination. The social organization and astonishing technology we see in the world around us is less the invention of particularly clever people who have been particularly well-trained and more the product of the imperative to increase relative surplus value, the particularly capitalist way of increasing profits. The appearance of the steam engine as a revolutionary object owes more to the development and understanding of relative surplus value, its consequences, and its conscious pursuit than it does to the acclaimed genius of James Watt. The consequences of the emergence of the systematic acquisition of relative surplus value was increased monetary wealth for a whole class and the setting aside of a portion of this wealth to be continuously converted into time and funds for further research and invention. The same can be said for the silicon chip as the steam engine, a difference perhaps being that early inventors and scholars were often funded by their families while modern inventors and scholars tend to be funded by governmental bodies and corporations.

The sustained achievement of relative surplus value relies on the arrangement of a whole array of devices, including the displacement of workers from their rural roots; their relative impoverishment; discipline; a new work ethic; enhanced social control; the assignment of workers to particular tasks in the creation of products (given perfect expression in the assembly line); and the building of component-making machines that require increasingly less supervision as they are improved and refined. In order to become commodities, or things, people must be freed from all ties and made available in the market. The point is that in a capitalist enterprise, the organisation of work and the creation of technology that assists or controls labour must be persistently improved upon or revolutionized because this all occurs in a competitive arena. Otherwise, the acquisition of relative surplus value, or continued profit/wealth comes to a halt.

Banaji, following Marx, emphasizes that capitalist production existed sporadically before it became the motor of the entire economic system. But it was only during “the great watershed of the sixteenth century” (Banaji: 43) that it became apparent that capitalist production was no longer merely increasingly prevalent. On the contrary, it had become the single mode of production for those key countries in western Europe. I think the difference between a society that engages in capitalist production sporadically and one that is dominated by capitalist production is crucial to an understanding of why and how capitalism was able to make such momentous advances from the sixteenth century. It is only in a fully capitalist mode of production that the whole of society is geared towards, as well as determined by, the raising of relative surplus value, defined here as the raising of the relative productivity of each worker. In this situation, we witness a proliferation of James Watts’, because society requires both a constant revolutionizing of production methods as the basis of competition and the escalation of wealth generated by relative surplus value. This, then, is the often-seeming magical basis of the dramatic technological developments seen in the capitalist epoch.

For the capitalist system to work as a system, all workers must be commodified in the marketplace and freed from all other modes of daily life, whether that be, for example, formal slavery or serfdom, etc. Thus the worker can be hired at a wage, but the productivity of the worker can be exponentially increased. But workers are not paid for their productivity as such. They are paid according to the value they can demand in the market place, where they are commodities like any other. Put simply, if there is a shortage of labour, and the labour has choices, then labor should be able to demand a higher price for itself, whereas if there is an excess of labor, its price is driven down. The processes that capitalism uses to make production more efficient and to increase the productivity of each worker therefore, as part of the structure, serve to keep labour cheap in comparison to profits. The price of labor is determined not by its productivity but by its value in a market place, just like any other commodity, or thing. The mode of production that we call capitalism is consequently the form of domination that dehumanizes humans to a greater extent than any previous form of systemic domination. This is so because it finally and completely severs them from all bonds except those of money and their status as commodities.

So, what defines capitalism? The extraction of relative surplus value from laborers combined with their (fictitious) freedom in the marketplace. However, due to the ever-expanding innovations in the extraction of relative surplus value capitalism has been able to run away with itself (become ‘personified’ as Marx put it) and now, however messily, directs all human endeavour through technology and organization (aspects that are developed and fine-tuned through universities and schools, for example, which is, by the way, the reason capitalist society is the most pedagogical society of all societies so far).

We do not control this process, even if we claim to disagree with it. No one controls it. It controls us. Daily, we do the work of capital for it. Whether we are working in a factory, ‘studying’ at school or university, lecturing at university, on holiday, asleep, overseeing a vast business empire, or engaging in politics.

Jul 19 2017 13:26

A couple of good additions to this old thread. And hopefully anyone interested in the possible implications of all these issues for our social practice today will take the opportunity to read through the whole discussion.