15 of 15 people found the following review helpful
5.0 out of 5 stars Fantastic book about where money (and of course debt) comes from
This is the book that Niall Ferguson's "The Ascent of Money" ought to have been. It is a fantastic, fabulous, rich account of what money is and where it has come from. In the process it trashes most of the conventional economic wisdom, and pokes enormous holes in what economists tell us about money. Money didn't arise out of dissatisfaction with barter. Credit-based...
Published on 1 May 2012 by Jezza
25 of 27 people found the following review helpful
3.0 out of 5 stars Rough diamond that requires some polishing
This is an almost great book which will cause a seismic shift in the way most its readers think about money and debt. It is a genuine pity, therefore, that the editing of the published version is so shoddy. The prose is careless and repetitive and in one instance I even saw a remark by a reviser in square brackets, wondering whether it was clear to whom the subject...
Published on 5 Mar 2012 by Ross Smith
Most Helpful First | Newest First
15 of 15 people found the following review helpful
5.0 out of 5 stars Fantastic book about where money (and of course debt) comes from,
This is the book that Niall Ferguson's "The Ascent of Money" ought to have been. It is a fantastic, fabulous, rich account of what money is and where it has come from. In the process it trashes most of the conventional economic wisdom, and pokes enormous holes in what economists tell us about money. Money didn't arise out of dissatisfaction with barter. Credit-based systems are older than bullion-based system.
As the title suggests it has a very broad sweep, starting with debt peonage in ancient Sumer, taking in the Biblical tradition of Jubilee and debt forgiveness, the relationship between bullion-based currency, war and slavery. It examines the relationship between the moral dimension of debt and sin, and the economic role of debt in keeping the economy turning over.
The trouble with money is that it's actually a very difficult thing to get your head around. It's easy to get cluttered up with historical detail that actually doesn't reveal anything (were prices rising in Medieval England, and so on). But it's also very political - what you think about money has implications for the way that you think society should work, and the limits as to how far that can change. So the simplifications that commentators make in order to make the story comprehensible depend on they think is really important, and what they want you to think is really important. Ferguson, with his right-wing boosterism is an obvious example.
I don't think you will find a better guide anywhere than this book. It comes right up to date, with the US war-based economy and the present financial crisis included, not as an afterthought but as the culmination of the story. Perhaps best of all, it tackles the way in which banks create money out of nothing without resorting to paranoid conspiracy theory or a simplistic call for a return to bullion, as so many critics of the banking system seem to do.
I haven't given anything five stars for a long time, but this really deserves them.
55 of 57 people found the following review helpful
5.0 out of 5 stars Community, Trust and Debt,
If you're thinking about studying economics, you should read this book first. If you've already studied economics, you should read this book, but be prepared to be disappointed in the critical faculties of your previous teachers. If you're studying economics, don't read this book - it contradicts too much of what you need to amass to pass your exams - yet.
Seriously, this is a great book. It teaches, generates reactions, inspires new thoughts and encourages further exploration. You want to strangle the author at a couple of points, and he's not short of opinions worth strangling someone about. There are (some) laughs. A previous reviewer rightly notes the lacuna of Hayek. But ... Graeber is an anthropologist squaring off against entire professions and generations of economists and financiers and bankers and government monetary policy-makers across a new battlefield (the study of how people behave). He scores some telling hits - the myth of the origins of barter, new ways of looking at the reasons behind the rise (till recently) of the West (and it isn't pleasant), the rise and fall of paper money in China, why the state matters, faith-salvation-and-debt, and builds a fundamental premise - communities form when people are prepared to be indebted to one another.
If this were the last book on the subject, sure it's incomplete and has a few flaws. But it's not the last; rather a fundamental read along an important road - when would we know our financial system is working?
7 of 7 people found the following review helpful
5.0 out of 5 stars Economics as if Adam Smith didn't matter,
I've given this book 5 stars because I'm convinced that it has the potential to change the conventional narrative about economics and money, and in doing so can help us navigate towards a more humane economy that better serves the long-term interests of humanity...
Debt is a long overdue anthropological view of money and of human economies (by "anthropological" I mean it starts many thousands of years before Adam Smith!) In his exploration, Graeber challenges much of the conventional wisdom that we all "know" about economics and money.
The breadth of material that Graeber covers is extraordinarily ambitious and though anchored in the perspective of social anthropology, he also draws on economics and finance, law, history, classics, sociology, linguistics, and philosophy.
Few mere mortals can keep up with such multidisciplinary competence, so I was delighted to discover that CrookedTimber dot org has done a "seminar" on the book. (Look for the Book Events link on the bottom right) They draw on experts and scholars from many of these different disciplines to provide some important and fascinating critical perspective. Graeber himself responds in perhaps slightly too pugnacious but nonetheless enlightening detail.
Oh - In case you haven't heard... In addition to being a world-reknown intellectual anthropologist, Graeber is a world-reknown intellectual anarchist. This anarchist label is typically used to try discredit him and I admit that it gave me pause for thought about his motives in writing such a book. I have followed him closely on Twitter since starting this book though, and I have heard little to fear from his worldview and much to respect. In these current troubled times, I'm willing to listen to anyone who has a coherent story that challenges the orthodoxy that we hear from mainstream media, business leaders, and politicians. Graeber's core theses feel sound and they are well presented in an entertaining and highly educational book.
I'm convinced that if we are going to find our way out of the current mess then we need to think deeper and wider than just unrolling 30 years or so of neoliberal orthodoxy - What was happening before was just as damaging to long-term human flourishing and was just as surely destroying our only planet (although admittedly at a slightly less breakneck pace.)
By taking an anthropological view, Graeber helps shine a light on what it is about human economies that make them humane...
If you're the kind of person who loves to have your moral and intellectual foundations challenged, then this book is for you. The first chapter is free online at mhpbooks dot com - check it out and make your own call on whether it is worth investing in the full book.
44 of 47 people found the following review helpful
4.0 out of 5 stars Sex, Money, Death, War. What's not to like?,
Graeber provides us with a fascinating exploration of debt and its relationship to money, economic systems, and society itself. He wears his heart on his sleeve, from the start of the book where he tells the reader about his contempt for the IMF, to the end of the book where he puts in a good word for the non-industrious poor.
He also tells us some fascinating tales about how other societies have organised exchange. For me this is where he's at his strongest. The book is worth the price alone just to hear about the Gunwinggu tribe who seem to have sorted out a very appealing alternative to capitalist economic relations. In the same vein, the Lele tribe's 'village wife' adds some more spice to the story, as Graeber goes where economists fear to tread; to the idea that we are ambivalent sexual creatures not just self-interested rational automotons. Slavery, sex, death, war and marriage across human history form the backdrop to his examination of debt. What's not to like?
Well, there are a couple of things that knocked one star from this review. For me Greaber fails to distinguish between money and currency. Although this is a common problem in almost everything I've ever read about money. Towards the close of the book he describes money as 'not "really" anything'. This feels like a bit of a cop out. Would he same the same about love?
A more serious criticism is his failure to even mention the Lord of Libertarianism, Hayek. For Hayek, money was a institution born of price that was determined through the magic of markets. Graeber has interesting stuff to say about free markets and the state; he tackles Adam Smith, and finds sympathy with Keynes. But Hayek remains the elephant in the room.
Anthropology has so much to teach us about money, debt, and exchange. It should be a requirement that anyone who refers to themselves as a banker or economist should study it. Graeber's book would be a good place to start.
75 of 81 people found the following review helpful
5.0 out of 5 stars Nobody owes those bankers anything,
Not only does Graeber make sense of the earliest origins of monetary debt some 5,000 years ago, when militaristic states first appeared. The investigation broadens into an extraordinarily ambitious overview of the entire span of written history. As Graeber proceeds, he confidently overturns the conceptual underpinnings of the entire discipline of economics, together with its many insidious extensions into religion, philosophy and science. Money didn't emerge as a medium of exchange between free agents. Graeber pours scorn on Adam Smith's mythic narrative in which men engage in barter until the arrival of that brilliant new invention - money. He turns instead to Marcel Mauss' classic book, The Gift. Left to themselves, humans are spontaneous communists. They value their relationships more than they value things. Why lay claim to a possession, if not to pass it on as a gift? The tension between giving and receiving would be cancelled out by an immediate return. The longer the interval between gift and counter-gift, the more impressive the demonstration of trust. Money annihilates all this.
So how did money originate? It began, explains Graeber, with conquest and extortion. Some violent patriarchal thug - Hernan Cortes in Mexico is a recent European illustration - persuades his henchmen to sign up for a campaign of rape, pillage and slaughter. The project rests on a promise: once the loot has been stolen, the accomplices may expect their share. So before setting out, the adventurer must issue his promissory notes - his advance undertakings to pay. These can be accepted and circulated as tokens of value - but only on one condition. Sufficient trust must prevail. But trust in this context differs in kind from that which so inspired Mauss. We're not talking about gift-giving or love. All that's required is trust in the prospects of the military campaign - confidence that sufficient loot will be obtained. In the final analysis, `money' rests on that and nothing else: the henchmen's expectation that their leader's campaign will succeed in extracting the promised loot for subsequent distribution among the thieves. Should that confidence falter, the entire system will inevitably collapse.
Like any good anthropologist, Graeber has no time for economics. The very idea that there is such a thing as `the economy' is itself an ideological fiction. More historian than economist, Graeber discusses how, from earliest times, politics, warfare, violence and deception - not to mention sex, love, solidarity and truth - have combined in complex ways to constitute our productive and imaginative lives. If you don't appreciate anthropology, you may not like any of this.
I can imagine Graeber's academic critics accusing him of not being sufficiently theoretical. He burdens us with almost no specialist terminology; he steers clear of arcane debates. If you want a technical treatise on the underpinnings of the current financial crisis, you may feel disappointed. Avoiding the temptation to blind us with science, Graeber writes like a proletarian - in straightforward, comprehensible English. The book includes exhaustive notes and references, direct quotes, illuminating graphs where needed, a bibliography and a good index. My copy was sprinkled throughout with minor typographical errors, adding nicely to the impression of an anarchist at work.
I love this book because it strips away so many myths. Money is rooted in extortion. `Debt' is a vague concept, its very ambiguities serving to disguise extortion as moral obligation. The conquered must pay up because - runs the argument - we inhabit a moral universe. Graeber concludes by asking: Do we really owe those bankers anything at all?
25 of 27 people found the following review helpful
3.0 out of 5 stars Rough diamond that requires some polishing,
This review is from: Debt: The First 5,000 Years (Kindle Edition)
This is an almost great book which will cause a seismic shift in the way most its readers think about money and debt. It is a genuine pity, therefore, that the editing of the published version is so shoddy. The prose is careless and repetitive and in one instance I even saw a remark by a reviser in square brackets, wondering whether it was clear to whom the subject pronoun of a sentence referred, which had not been erased in the final edit.
It seems that the book was brought out in too much of a hurry, perhaps to cash in on the author's current celebrity status as the mind behind the US anti-bank movement "Occupy Wall Street". The publisher need not have worried: the global financial crisis still has years to run.
"Debt: the First 5000 Years" deserves to become a classic in its field and hopefully it will help to change attitudes towards the current financial status quo. The subject matter is crucial and the author knows how to write for a lay public. All that is needed is a some professional, careful editing before the second edition comes out.
10 of 11 people found the following review helpful
5.0 out of 5 stars Smashes through barriers of misconception with the greatest of ease,
What is most striking about Debt is the overwhelming power of its numerous ideas. It is so rare that a book can hit the reader over the head with even one major new idea. I mean a world-shaking idea that upsets one's entire value system and causes the reader to reframe everything going forward. David Graeber seems to be able to do it at will.
Here are a few small points that have changed my way of thinking:
-Graeber begins by debunking the sacred Adam Smith, which he admits threatens the very foundation of economics, and that economics itself rests on the completely false foundations of Smith's unfounded and unprovable assumptions. The first clop up the side of the head is the destruction of the notion that money preceded markets and credit. He shows definitively and with total certainty that it was completely the other way around. Credit came first because there was no coinage. Markets and money, on the other hand, are side effects of governments. They cannot exist without institutional structures in place. And countries didn't appear until late in the human game. Ultimately, he says Smith was describing an ideal state, not anything that has ever existed anywhere.
-Next, Graeber swings a punch for honor. All debt seems to stem from honor. Medieval Ireland for example, was structured on a monetary system that valued the honor of various classes of people, and assigned hard goods to value them - right in law. So honor was "monetized" in hard goods. Coins had no place beside eggs and cows and slave girls. Too abstract. Too remote. Similar official valuations of honor to commodities occurred elsewhere in history too. Tellingly, the Greek word for honor is the same word for price. In other words, the very human condition of honor is possibly the single most important driver of economics. This is a delightfully radically different viewpoint.
-About the earliest evidence of the knowledge of structured debt that we have comes from 2402 BC. Money itself only appears around 600 BC, and most interestingly, it disappears again around 600 AD. Medieval societies existed without cash. Cash came back, obviously. But the question remains: is it cyclical? This gets short shrift, and only at the very end of the book.
-Money itself seems to have come into play all over the world at about the same time, and for about the same reason: to pay armies. Alexander the Great alone required half a ton of silver a day to keep his men his men. This of course became a vicious circle. More need of silver meant wider conquests, more mines, more slaves to work them, and larger armies to oversee the expanding empire. In very many ways, little has changed.
-For centuries, peasant uprisings have focused not on equality, not on an end to slavery, but the destruction of debt records. From medieval India to modern Chiapas, it is debt that causes violent dissatisfaction with life.
-Market economies and capitalist economies are not (necessarily) the same thing, or even compatible. Market economies seek to trade goods for money in order to obtain more goods. Capitalist economies use money to buy goods to make more money. Put that way, it's two different universes.
-and finally, "Capitalism cannot really operate in a world where people believe it will be around forever." I don't think I've seen a more highly charged statement in a rational context - ever.
What a fine book!
3 of 3 people found the following review helpful
4.0 out of 5 stars The Aphrodisiac That Is Owing Money,
This review is from: Debt: The First 5,000 Years (Paperback)
Straight out this book comes across as a Leftie rant at capitalism. It is such, in my opinion, and it is surely a very valid rant (I'm a Leftie and I believe in capitalism). Graeber focuses on debt and how it has shaped the modern economy and truth be told how it has come to bedevil the poor and simple-minded.
There's a story Graeber retells about Neil Bush who during divorce proceedings with his wife admitted to multiple infidelities sometimes with women who mysteriously appear at his bedroom door (! Go figure).
"You have to admit it's pretty remarkable" remarked one of his wife's attorneys, "for a man to go to a hotel room door and open it and have a woman standing there and have sex with her"
"It was very unusual", Bush replied, admitting this happened on numerous occasions.
"Were they prostitutes?"
"I don't know."
I don't know about you but there's a definite whiff of bribery and corruption in that air. And this was a man who was a governor of a state in America and rumoured at one point to be considering running for President. This is the sorry and scary state of capitalism today and dare I say since its modern inception in fourteenth or fifteenth century Venice or seventeenth century Amsterdam if you prefer. Unfortunately this economic model is foisted on all of us as a system run by men who can do no wrong; a system whose precepts and tenets as taught in our academies of economics and finance are like the Koran and the Bible; only challenged by heretics.
Graeber asks: "How did we get here?"
3 of 3 people found the following review helpful
5.0 out of 5 stars Utterly fascinating,
I confess that my heart sank when I received this book. It is long and looked to be tedious. What a surprise to find something so engrossing and lively. Graeber takes an anthropologist's view of debt, and shows by example how the standard version of economic history is simply nonsense. The consequence of our failure to understand the nature of debt is that we base our economic system on shaky ground. I hope economics undergraduates are made to read this superb book.
9 of 10 people found the following review helpful
5.0 out of 5 stars Good for Christians who do not believe in blessed capitalism,
There are a number of insightful reviews on Amazon about this book. This one is from the perspective of a christian pastor looking for a take on the modern slavery to money and debt and how that relates to the promise of wealth in Christ and His (very negative) view of money.
The Author shows very clearly that money is a human construction and not a "given" of the created order. He also persuasively argues that cultures which are strangers to money are nevertheless able to share and exchange natural and manufactured goods efficiently without having to keep records of debts or barter. Calculations of "price" or value are not explicitely made because they are damaging to trust and the sense of belonging to the community. Relationships are more like "covenant" relationships than contactual relations.
He mentions an extreme case where a Maori glutton abuses the right to ask successful fishermen for the prime portion of their catch so often that he becomes a nuisance. Rather than introduce the idea of a "fair price" or giving a flat refusal and so destroy their system of justice they take the simpler expedient of murdering him - considering his death to be a lesser evil than weakening the community of trust between themselves!
However, concepts of precise valuation are known in such cultures when warfare is involved or when trading with "outsiders". After successfully pillaging an enemy, there needs to be a system of valuation to share the spoils "fairly". In the same way, travelling merchants are aliens without a stake in the community. Trading may well benefit the group but but it must on a basis of equality of exchange so that the strangers do not impoverish the home culture by trickery.
A reliable coinage helps deal with both problems. Even conceptual money (tokens) or virtual money can fill the vacuum of trust if both parties believe in it as a measure of value and, therefore, as a medium of exchange.
Hence the power of money grows in a context of violence and suspicion.
The rise of debt in particular begins with a special kind of contract. A king or lord wishes to gather a warband and equip them with weaponry, horses, boats etc. He pays the investors and adventurers with promises to share the wealth obtained by his war. Those promises to pay become the basis of a system of debt and credit. In the same way, a merchant adventurer is convinced he would be able to make a journey which will yield a high return in terms of wealth gained and he raises funds by issuing shares or bonds. Hence war, exploration and conquest become a debt-fuelled search for profit.
The Christian disciple who is challenged by Jesus "to make friends using unrighteous Mammon" and see whoever he comes across as his neighbour will recognise that this account of the rise of money and credit makes much more sense than the myths of economics and the phoney theories of justice constructed on those myths.
The author points out that religious systems which see obligations to Gods or ancestors as "debts" have a tendency to impoverish and even enslave their adherents. As proverbs says 22:7 "The rich rule over the poor, and the borrower is servant to the lender." And when the debt is life itself the service ends only with death.
The revelation of redemption through Christ's death includes the idea of being set free from debt bondage into what? A covenantal sense of obligation certainly but also a freedom from the calculation or imposition of precise debts.
Read this with Money & Power (Jacques Ellul Reprint) and you will begin to have the tools to think through your own relationship to the ruling principalities and powers of our times.
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Debt: The First 5,000 Years by David Graeber