For as long as there has been such a thing as money, morality and debt have been intimately intertwined. We see this today in discussions about the debt crisis. Do mortgage debtors, credit card debtors, and student loan borrowers have a moral obligation to pay back their debts? Is it unethical for debtor nations to default on their loans?
- That money originated as “social currencies” used to rearrange relationships among human beings (marriage, funerals, blood money, and other social functions), and was not used to buy and sell things. Indeed, this kind of money is to be found even in societies without a significant division of labor.
- That the first money used for commerce took the form of credit: tallies of transactions and loans denominated in a common unit of account and periodically settled by delivery of various commodities.
- That the conflation of these two different kinds of money led to debt peonage, slavery, the demotion of women's status, and other iniquities that one might expect to happen when human relationships are mediated by the same currency as commercial transactions.
- That much of the psychology and morality around money traces its origins to the violence and slavery that have been part of creditor-debtor relationships for thousands of years. War and slavery were crucial in creating the economy we know today, which should not be surprising, as our economic habits still encode the anxiety one might expect from such origins. As well, they perpetuate violence and, if not outright slavery, debt servitude to this day.
- That history has alternated between periods of credit money and coinage, with the latter corresponding to times of greater violence, social chaos, slavery, and the repression of women. So for example, the Middle Ages saw the virtual abolition of slavery and the flowering of complex credit relationships facilitating trade across the Indian Ocean and beyond. Coins were seldom used. Compared to the Axial Age that preceded it, it was a time of relative peace and prosperity, ending with the rise of Europe and the influx of vast amounts of silver from the New World. A new age of coinage began.
- That markets have never been “free” in the sense of being separate from government, but, to the contrary, were created by governments to facilitate their acquisition of various goods (especially for their armies). They have been intertwined ever since.
- That all major world religions grew in response to money, whether informed by the beliefs of people living in a money economy, or in reaction to its evils.
- That the origin of capitalism as we know it today is “the story of how an economy of credit was converted into an economy of interest.” Debt, he says, is the primary instrument of colonization whether internal or abroad – keeping in mind that behind the man with the ledger is a man with a gun. Moreover, the enforcement of debts is key to maintaining the political power relationships the prevail today.
- That the invasion of market relations into every sphere of life has always been accompanied by violence. War, debt, and the market are inextricably linked. Even today, our money system is based mainly on the monetization of government war debts. If there is one persistent theme to this book, it is that our association of debt repayment with morality is false; that, indeed, the debt relations that hold today are rooted in a history of violence; that debt and money itself are social creations and not unalterable facts of nature; that our understanding of human nature is deeply colored by the market-based, debt-based world we live in. The world could be different. We are right to want it to be different.
This book presents a huge challenge to anyone who thinks that coins or metal-backed currency exemplify real money, and present money as a kind of departure from or degeneration of it. According to Graeber, it is coins, rather, that are a degeneration: a substitution for credit money when political turmoil and war destroyed the credit networks that flourished in more peaceful times. Credit and coins, he observes, bear one “spectacular distinction”: only the latter can be stolen. That is because coins (or paper money) are divorced from their origins, and therefore suitable to commerce among strangers. Aside from assurances of the coins' purity, no trust is necessary to conduct a transaction. Credit, on the other hand, has no value once removed from its social matrix.
Despite his well-known political radicalism, and the radical insights of his book, Graeber abides by fairly conservative conventions of scholarly decorum. He avoids sweeping generalizations and programmatic statements. While his cross-cultural comparisons of Chinese, Indian, and Occidental economic history certainly lend themselves to metahistorical conclusions, he seems wary of taking his argument to its final step. This circumspection might make the book palatable to a broader spectrum of readers, but it is frustrating to activists who want to do something with it.
A related shortcoming (I hesitate to use such a word for so breathtaking a work of scholarship) of the book is its hesitance to articulate any general principle of human nature. While he ably debunks the assumption that human economic behavior is motivated primarily by self-interest, he doesn't offer an alternative that might be the foundation of an economic philosophy. Perhaps he would say, “Human beings are complicated,” or, “Human nature is largely an artifact of culture.” True, perhaps, but having surveyed five millennia of economic behavior across so many cultures, mightn't Graeber attempt to discern some unifying, general feature of human economic psychology?