Book Review: Debt – The First 5000 years

Debt - Updated and Expanded: The First 5,000 Years

Debt – Updated and Expanded
The First 5,000 Years

David Graeber

For more than 5,000 years, since the beginnings of the first agrarian empires, humans have used elaborate credit systems to buy and sell goods—that is, long before the invention of coins or cash. It is in this era that we also first encounter a society divided into debtors and creditors—which lives on in full force to this day.

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Why I read this book?

I have been initially introduced the David Graebers work, after reading Bullshit Jobs: A theory a book which I found really compelling, thought provoking and one which had really made me reflect long and hard on my career along with my entire working life! Throughout the book, Graeber repeatedly refers to his book Debt : The first 5000 years in cross referencing facts that he elaborates on with in the book. I found these insights to be quite compelling.

Graeber also explains quite clearly that the the rise in bullshit jobs, stems entirely with from the human races preoccupation with debt and money. Two concepts that are actually just figments of our own imagination, yet it completely vexes us!

Bullshit jobs

A theory

explores one of society’s most vexing and deeply felt concerns, indicting among other villains a particular strain of finance capitalism that betrays ideals shared by thinkers ranging from Keynes to Lincoln.  Bullshit Jobs gives individuals, corporations, and societies permission to undergo a shift in values, placing creative and caring work at the center of our culture. 

I figured , that if Debt was only half as enlightening as Bullshit jobs, then it would still be worth a read. Overall, I am delighted to say that in fact to the book is doubly more enlightening!

I would have to say, that although Bullshit jobs, despite being a shortish book, it is actually quite a slow, deep read and is yet thoroughly entertaining. Debt, is also long, slow read but it still yet quite surprisingly a fascinating page turner. If I were to really attempt to explain this book, is that it reads like a economics psychological historical investigative thriller!

There is tonnes of intellectual information packed into Debt: The first 5,000 years and the reality is that this book could easily be broken out into 5 volumes! However, Graeber has attempted to do this in 400 pages and few pages of notes!

Graeber is an anthropologist at the London School of Economics, and he has written a massive, sprawling history of debt, credit, and the development of markets and money; he ties it to war, slavery, taxes, tribute, government bureaucracy, religious thought, and both local and international trade, by looking at societies from ancient Mesopotamia, to India, to China, to ancient Greece and Rome, to Latin America, to the Middle Ages, and to the Modern Ages.

The aim of the book, is quite clearly to guide us as species to completely rethink our sense of the rhythms of economic history. Economists and historians, usually come at history in opposite directions. “Economists tend to come at history with their mathematical models–and the assumptions about human nature that come along with them–already in place: it’s largely a matter of arranging the data around equations. Historians …..often refuse to extrapolate at all; in the absence of direct evidence…..they will not ask whether it is reasonable to make (certain) assumptions….this is why we have so many “histories of money” that are actually histories of coinage….Anthropologists, in contrast, are empirical–they don’t just apply preset models–but they also have such a wealth of comparative material at their disposal they CAN actually speculate about what village assemblies in Bronze Age Europe or credit systems in ancient China were likely to be like. And they can reexamine the evidence to see if it confirms or contradicts their assessment.”

I have previously studied Economics, and as Graeber points out in the beginning of this book is that most of the economic text books usually start out, extolling the problems of a Barter Based economy. As an admirer of French anthropologist Marcel Mauss, addresses this “pet peeve” of anthropologists everywhere and introduces it at the beginning of the book, but he has really convinced me as a reader through his extensive and comprehensive looks at every possible facet of this question.

The so called Credit Crunch of 2008, which was primarily caused by global private bankers blatant greed and stupidity.  All because the debts created by the selling of debt, and the insurance pay outs that covered those obligations became too big to pay – hence the US and UK Government bailing out private banks, by effectively just printing more money and giving it to the stupid and greedy bankers in the hope that they would create more money!

Politicians implemented and blamed their austerity policies on debt – the debt they say the State has written up in just providing services – never mind the £300 billion plus that the Bank of England pumped into the UK banking sector just to enable us to get at our own money through quantitative easing.

This is the backdrop for Graeber’s book – and explains why he does condemn the current way in which debt is treated today. Should the cause not be prosecuted, and not those who were just getting on with their lives and actually doing something productive?

Money almost always arises first from objects that are used primarily as adornment of the person.

David Graeber

What I like about this book

This is is a really wide ranging book, the reality it is actually trying to cover 5000 years up to and including 2009/10! Graeber, is not coming at it from an economic perspective but is actually providing the anthropological and archaeological and long-term historical perspective informed by what we know about how past cultures dealt with debt, how money became to be created – debunking the myth of barter – and how credit and money work together or as is evident don’t!

What I really found interesting, is how Graeber explores the rise of patriarchy in ancient society and how at one stage in the ancient world men and women were more equal in terms of jobs and status and seems to suggest that it was economic pressures that brought about the rise in patriarchy and the subjugation of women.

I also found the book especially poignant at this time, reading it during a global pandemic and the rise of the global protests of the George Floyd killing and Black Lives Matter movements. In that Graeber also discusses how debt fuelled the North Atlantic slave trade, not only from the perspective of slave traders but also from the African communities involved. This also highlights how the very concept of debt has actually fuelled the slave trade across numerous societies for millennia!

The concepts contained in this book are foundational, where money comes from, how debt is used for good and evil, how humans really interact positive and negative. It’s certainly an eye opener, especially when you consider the time frame that this book was initially released, circa the 2008, Credit Crunch. All the problems and issues we are experiencing today stem directly.

The clincher for Graeber though is why – if the principle is that debts are to be paid – did the banking sector seem to get off scot-free? Why dis so many of those CEOs keep their ill-gotten gains? How many went to court over selling sub-prime loans or taking out insurance on financial instruments they knew would fail? Why were too few banks wound up?

It’s inconsistencies like this that causes Graeber to question the morality of debt – debts should be paid in a good society – but what about the monetised debts created from immoral motives such as predatory mortgage lending, insuring things that we have a keen interest in seeing fail (like credit default swaps) or betting speculation ? How can the reciprocal motive/morality be justified there?

Graeber highlights in ancient times many rulers wiped slates clean of debt, because it had got so out of hand and completely unsustainable, in order to completely reset the “imagined economy” for the good of society. However, our society seemed to take the line of the only way to save the economy was to create even more debt, by creating more imaginary money to benefit only 1% of the worlds population!

Graeber explains how debt can be weaponised and used in a negative way by human greed and or the need to make war , and how the monetisation of debt has become such a big problem.

Why I recommend this book

This book, is a definite must read, if you ever want to try understand how money and debt really works and why it even exists.

Graeber provides plenty of historical evidence and context on how various societies have used and evolved the use of money and debt and not only that but how tightly money and debt have been at the core of our very existence. It was the need of tracking and recording debt and financial obligation that was the real innovation of reading and writing!

I found this book extremely interesting and have returned to it on several occasions to re-read chapters!

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