4 ms·

I highly recommend that people read "Debt: The First 5,000 years" by David Graeber which is a fascinating and erudite exploration of the development of money.

dalbasal 9y ago
I've made that recommendation, with mixed results. I think it has less impact unless you studied/read a little classic economics. Most economics "schools" start from a standard Smithian narrative for the invention of money. Spot traded goods, durable goods as values stores and eventually some sort of money. The money supply narrative is completely separate. It's explained via the "money multiplier" effect, which turns 1X amount of money into nX via lending. Generally, it's taught via the lens of central bank policies, monetarism and macroeconomics. Graeber merges these narratives. Debt predates money, and is the primordial money. All through history nearly all money has been debt and actual money (eg gold) just got used to quantify debt. Gold rarely exchanged hands or even made it to the hands of most people. Once you start with debt instead of money, the picture changes. Familial, religious or cultural obligations form the basis of well obligations, debt. That's the origin of money. Graeber is also politically eccentric and that appeals to people with sympathies to his views, but for an average reader... It's not revolutionary unless you already know/care about the mainstream ideas.
- xchaotic 9y ago
  Yeah, the biggest value in the the "history of debt" is the unlearning and debunking myths that are taught as 'science' in economics schools. There were no 'barter' economies, money did not 'evolve' from barter etc. Even otherwise respectable names in economics built their theories on top of these ideas which are in fact pure, convenient fantasy.
  - dsimms 9y ago
    so much this, and it's repeated over and over ...and over in the book.
- novalis78 9y ago
  I would also suggest 'The origin of virtue' which has a chapter on money and explains a similar idea based on evolutionary psychology (game theory, altruism, social behavior of apes) - quite fascinating as it connects social narratives with genetic strategies to better replicate.
  - frabbit 9y ago
    And to add to this Unto Others (Sober and Wilson). That has a much more specifically genetic/evolutionary slant to it. I liked it a lot.
- frabbit 9y ago
  "I think it has less impact unless you studied/read a little classic economics." I suspect that most people would repeat the claim that the chain of events was barter leading to coinage of some sort. Debunking that on its own is interesting. Other interesting ideas are: * that in order to manage debt there needs to be (as there was historically) regular corrections to whatever debt system is in operation (the jubilee being his historical example). * once debt is quantized and mensurable the emotional, social origins of debt are destroyed Regardless of the validity of his thesis I found the comparitive anthropology, history and literature interesting. I find your last statement confusing. It seems to suggest simultaneously that there might be an average reader who is educated in mainstream ideas and will find the book revolutionary, and also average readers who are undeducated and will not find it revolutionary and finally anarchists (which is what Graeber is) who will also find it revolutionary. I did not like the writing style, but I thought the content highly stimulating. It is definitely worth a read.
  - dalbasal 9y ago
    Revolutionary as in the "different from conventional" rather than "en route to revolution." I guess my choice of words was poor for this case. :) It's not just educated, but also interested. For two reasons.. the first is that a nuanced change to the origin of money narrative is not really interesting in itself, without the context. 2nd, because the really interesting implications (imo) come from merging the barter and debt narratives. He doesn't get into it very explicitly. A lot of modern economics (eg much of Friedman's work) orbits the money multiplication concept. (1)Savers deposit money. (2)Banks lend the money. (3) borrowers buy a house with it. (4/1)The money gets redoposited by by the seller (5/2) banks lend the money.... Each time they lend the money, the total amount of money in existence (in people's bank account) multiplies. This process controls the supply of money, and its inflation implications. It's how (most) money gets created. It relates to banking stability. Business cycles. Stimulus. A lot of the complicated implications of money stem from here. Graebers story is more elegant, with a single mechanism. It's all debt. The banking money multiplier predates money, and is the real way money came to be. I immediately thought of bitcoin. My current thinking is that bitcoin will be real money when people start borrowing it, not when they start buying stuff with it. Or else, maybe bitcoin is not really significant since it's just a way of denominating money. Anarchists will be interested for the anthropology, the history of debt rebellions and such. Not a lot of anarchists out there, so I assume modern writing from anarchist perspectives is generally interesting to them.
- woodandsteel 9y ago
  So social obligation precedes debt and money. That's interesting. I think classical economics starts with barter because its psychology and anthropology is one of humans being basically autonomous creatures who at some point voluntarily come together to engage in social relations. However, what the science actually shows is that human beings have always been members of complex societies, and human psychology includes many social motives and mechanisms.
  - frabbit 9y ago
    That is roughly what I take from it. Graeber presents evidence to back up the idea that debt is precisely that which cannot be repaid or quantized and that the attempt to do so is "naturally" (from several examples) taken as an abnormal or hostile act. There are some really fascinating anthropological stories to support this. I really recommend the book.
    - dalbasal 9y ago
      .. not exactly that it cannot/is never paid back, but that it is never fully cleared, in normal circumstances.
      - frabbit 9y ago
        Thank you for the precision. Yes. It is a web or network of unending obligation. Like his example of the women who are always heading off to give small amounts of foodstuffs in some complicated pattern.
zaphod4prez 9y ago
This is my favorite book ever. However, another commenter mentioned that having studied classical economics a bit is an important precursor to really understanding this book— I agree with that assessment.

dalbasal 9y ago

I've made that recommendation, with mixed results. I think it has less impact unless you studied/read a little classic economics. Most economics "schools" start from a standard Smithian narrative for the invention of money. Spot traded goods, durable goods as values stores and eventually some sort of money. The money supply narrative is completely separate. It's explained via the "money multiplier" effect, which turns 1X amount of money into nX via lending. Generally, it's taught via the lens of central bank policies, monetarism and macroeconomics. Graeber merges these narratives. Debt predates money, and is the primordial money. All through history nearly all money has been debt and actual money (eg gold) just got used to quantify debt. Gold rarely exchanged hands or even made it to the hands of most people. Once you start with debt instead of money, the picture changes. Familial, religious or cultural obligations form the basis of well obligations, debt. That's the origin of money. Graeber is also politically eccentric and that appeals to people with sympathies to his views, but for an average reader... It's not revolutionary unless you already know/care about the mainstream ideas.

xchaotic 9y ago
Yeah, the biggest value in the the "history of debt" is the unlearning and debunking myths that are taught as 'science' in economics schools. There were no 'barter' economies, money did not 'evolve' from barter etc. Even otherwise respectable names in economics built their theories on top of these ideas which are in fact pure, convenient fantasy.
- dsimms 9y ago
  so much this, and it's repeated over and over ...and over in the book.
novalis78 9y ago
I would also suggest 'The origin of virtue' which has a chapter on money and explains a similar idea based on evolutionary psychology (game theory, altruism, social behavior of apes) - quite fascinating as it connects social narratives with genetic strategies to better replicate.
- frabbit 9y ago
  And to add to this Unto Others (Sober and Wilson). That has a much more specifically genetic/evolutionary slant to it. I liked it a lot.
frabbit 9y ago
"I think it has less impact unless you studied/read a little classic economics." I suspect that most people would repeat the claim that the chain of events was barter leading to coinage of some sort. Debunking that on its own is interesting. Other interesting ideas are: * that in order to manage debt there needs to be (as there was historically) regular corrections to whatever debt system is in operation (the jubilee being his historical example). * once debt is quantized and mensurable the emotional, social origins of debt are destroyed Regardless of the validity of his thesis I found the comparitive anthropology, history and literature interesting. I find your last statement confusing. It seems to suggest simultaneously that there might be an average reader who is educated in mainstream ideas and will find the book revolutionary, and also average readers who are undeducated and will not find it revolutionary and finally anarchists (which is what Graeber is) who will also find it revolutionary. I did not like the writing style, but I thought the content highly stimulating. It is definitely worth a read.
- dalbasal 9y ago
  Revolutionary as in the "different from conventional" rather than "en route to revolution." I guess my choice of words was poor for this case. :) It's not just educated, but also interested. For two reasons.. the first is that a nuanced change to the origin of money narrative is not really interesting in itself, without the context. 2nd, because the really interesting implications (imo) come from merging the barter and debt narratives. He doesn't get into it very explicitly. A lot of modern economics (eg much of Friedman's work) orbits the money multiplication concept. (1)Savers deposit money. (2)Banks lend the money. (3) borrowers buy a house with it. (4/1)The money gets redoposited by by the seller (5/2) banks lend the money.... Each time they lend the money, the total amount of money in existence (in people's bank account) multiplies. This process controls the supply of money, and its inflation implications. It's how (most) money gets created. It relates to banking stability. Business cycles. Stimulus. A lot of the complicated implications of money stem from here. Graebers story is more elegant, with a single mechanism. It's all debt. The banking money multiplier predates money, and is the real way money came to be. I immediately thought of bitcoin. My current thinking is that bitcoin will be real money when people start borrowing it, not when they start buying stuff with it. Or else, maybe bitcoin is not really significant since it's just a way of denominating money. Anarchists will be interested for the anthropology, the history of debt rebellions and such. Not a lot of anarchists out there, so I assume modern writing from anarchist perspectives is generally interesting to them.
woodandsteel 9y ago
So social obligation precedes debt and money. That's interesting. I think classical economics starts with barter because its psychology and anthropology is one of humans being basically autonomous creatures who at some point voluntarily come together to engage in social relations. However, what the science actually shows is that human beings have always been members of complex societies, and human psychology includes many social motives and mechanisms.
- frabbit 9y ago
  That is roughly what I take from it. Graeber presents evidence to back up the idea that debt is precisely that which cannot be repaid or quantized and that the attempt to do so is "naturally" (from several examples) taken as an abnormal or hostile act. There are some really fascinating anthropological stories to support this. I really recommend the book.
  - dalbasal 9y ago
    .. not exactly that it cannot/is never paid back, but that it is never fully cleared, in normal circumstances.
    - frabbit 9y ago
      Thank you for the precision. Yes. It is a web or network of unending obligation. Like his example of the women who are always heading off to give small amounts of foodstuffs in some complicated pattern.

zaphod4prez 9y ago

This is my favorite book ever. However, another commenter mentioned that having studied classical economics a bit is an important precursor to really understanding this book— I agree with that assessment.