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I suspect you actually found good factual critiques, but decided to label them "quibbles". The Fed issues the modern world's most important debt instrument, an

I suspect you actually found good factual critiques, but decided to label them "quibbles". The Fed issues the modern world's most important debt instrument, and has a structure and purpose that Graeber gets fundamentally wrong. The reason critics focus on this is that, if he's lazy and wrong about the modern world's most important debt instrument... in a book about "debt"... it's probably a good sign you can't trust the rest of the book.

jongjong 3y ago
I don't agree that Graeber's interpretation was incorrect. However, regardless of implementation details and nuances, there is one critique which is irrefutable about reserve banking; it is far too complicated to be understood by the majority who rely on it. This complexity obscures the functioning of the most important force in economics and society. It is unacceptable on that basis alone. People should not be coerced to participate in a system which they cannot understand on the basis of trust alone. Especially when it involves trusting people they've never met and who may have conflicting interests.
- reducesuffering 3y ago
  People have to rely on complex chemistry and physics they don’t understand too. Given a choice between a simplistic economic system with worse outcomes and complex system with better outcomes, I’m choosing the better outcomes every time.
  - floydnoel 3y ago
    that's probably a false dichotomy, though. a lot of us think that the complex system also delivers the worse outcomes. the great depression didn't happen until after the fed existed, after all.
    - disgruntledphd2 3y ago
      How about?: https://en.wikipedia.org/wiki/Panic_of_1873 https://en.wikipedia.org/wiki/Panic_of_1873 https://en.wikipedia.org/wiki/Panic_of_1884 https://en.wikipedia.org/wiki/Panic_of_1884 https://en.wikipedia.org/wiki/Baring_crisis https://en.wikipedia.org/wiki/Baring_crisis Don't get me wrong, the Great Depression was 100% made worse by the economic thinkers (including the Fed) of the time, but the creation of a central bank was driven by prior problems.
      - floydnoel 3y ago
        of course those were all used as examples to support the creation of the Fed. so our next question should be, have the business cycles been cured? no, they certainly haven't. so I'm not sure what your point was.
        disgruntledphd2 3y ago
        You said > that's probably a false dichotomy, though. a lot of us think that the complex system also delivers the worse outcomes. the great depression didn't happen until after the fed existed, after all. I pointed out that a bunch of financial crises happened before the Fed existed. I took your point to be that the Fed made things worse. > so our next question should be, have the business cycles been cured? no, they certainly haven't. I'm not sure how that could happen at all, without incredible amounts of totalitarianism. Is that what you expect a central bank to do?
- tsunamifury 3y ago
  All of life is built on dependencies on systems people don’t understand. This is a ridiculous position to hold. Also it’s not complicated. The fed issue money and people buy it. The trust it because it’s backed by the largest military and economy in the world and that combines into an ideology most economies want to support and be a part of. A dollar is a debt investment in the America ideal. The day we aren’t strong enough or liked enough the system will collapse.
  - jongjong 3y ago
    That's true but there are a lot of people who, for example, like to avoid products which contain certain substances which they don't understand or don't want. Many people want to see the ingredients lists. Everyone shouldn't be forced to depend on things that they don't understand just because the majority are OK with that. When you trust something that you don't understand, you're taking a risk. Society shouldn't be coerced into taking risks which it (as a whole) doesn't understand. Especially when it comes to something as important as money. Most people have a completely wrong mental model about money. They think the money supply is limited, that governments only spend the money they receive as taxes, that nobody gets rich from government money and that bank loans come entirely from other people's bank deposits (hence why they receive interest on their deposits). This is all wrong. Most of society is operating on severely flawed assumptions. I don't see how it can be morally justified that complexity is not a problem when most of the population is being deceived by the complexity. Not only that, but there is no escape hatch. Even if you're intelligent and you take the time to learn about how the system works, there's no way for you to take advantage of it unless you have significant capital to invest... Meaning, you're already a beneficiary of the system (in which case you probably don't need an escape hatch anyway). I don't see any moral justification for it. It only benefits insiders who control the system. Insider trading in all but name.
    - kemotep 3y ago
      What would be an acceptable “escape hatch” that would primarily benefit the more vulnerable and less well off people in society that does not also benefit those with lots of capital? Like how would this alternative system be more moral than fractional reserve banking and fiat currency?
- thisgoesnowhere 3y ago
  Coercion is such a meaningless term now that libertarians have got ahold of it. Coercion, in this case, is when a system exists that you don't understand yet you have to follow it's rules. Which is why mom is clearly being coerced into using the internet. Don't get me started on how my dad get coerced by logistic networks when he gets a package delivered? Abstraction and interfaces into complicated systems are the best part of the modern economy yet somehow you found the opposite conclusion.

jongjong 3y ago

I don't agree that Graeber's interpretation was incorrect. However, regardless of implementation details and nuances, there is one critique which is irrefutable about reserve banking; it is far too complicated to be understood by the majority who rely on it. This complexity obscures the functioning of the most important force in economics and society. It is unacceptable on that basis alone. People should not be coerced to participate in a system which they cannot understand on the basis of trust alone. Especially when it involves trusting people they've never met and who may have conflicting interests.

reducesuffering 3y ago
People have to rely on complex chemistry and physics they don’t understand too. Given a choice between a simplistic economic system with worse outcomes and complex system with better outcomes, I’m choosing the better outcomes every time.
- floydnoel 3y ago
  that's probably a false dichotomy, though. a lot of us think that the complex system also delivers the worse outcomes. the great depression didn't happen until after the fed existed, after all.
  - disgruntledphd2 3y ago
    How about?: https://en.wikipedia.org/wiki/Panic_of_1873 https://en.wikipedia.org/wiki/Panic_of_1873 https://en.wikipedia.org/wiki/Panic_of_1884 https://en.wikipedia.org/wiki/Panic_of_1884 https://en.wikipedia.org/wiki/Baring_crisis https://en.wikipedia.org/wiki/Baring_crisis Don't get me wrong, the Great Depression was 100% made worse by the economic thinkers (including the Fed) of the time, but the creation of a central bank was driven by prior problems.
    - floydnoel 3y ago
      of course those were all used as examples to support the creation of the Fed. so our next question should be, have the business cycles been cured? no, they certainly haven't. so I'm not sure what your point was.
      - disgruntledphd2 3y ago
        You said > that's probably a false dichotomy, though. a lot of us think that the complex system also delivers the worse outcomes. the great depression didn't happen until after the fed existed, after all. I pointed out that a bunch of financial crises happened before the Fed existed. I took your point to be that the Fed made things worse. > so our next question should be, have the business cycles been cured? no, they certainly haven't. I'm not sure how that could happen at all, without incredible amounts of totalitarianism. Is that what you expect a central bank to do?
tsunamifury 3y ago
All of life is built on dependencies on systems people don’t understand. This is a ridiculous position to hold. Also it’s not complicated. The fed issue money and people buy it. The trust it because it’s backed by the largest military and economy in the world and that combines into an ideology most economies want to support and be a part of. A dollar is a debt investment in the America ideal. The day we aren’t strong enough or liked enough the system will collapse.
- jongjong 3y ago
  That's true but there are a lot of people who, for example, like to avoid products which contain certain substances which they don't understand or don't want. Many people want to see the ingredients lists. Everyone shouldn't be forced to depend on things that they don't understand just because the majority are OK with that. When you trust something that you don't understand, you're taking a risk. Society shouldn't be coerced into taking risks which it (as a whole) doesn't understand. Especially when it comes to something as important as money. Most people have a completely wrong mental model about money. They think the money supply is limited, that governments only spend the money they receive as taxes, that nobody gets rich from government money and that bank loans come entirely from other people's bank deposits (hence why they receive interest on their deposits). This is all wrong. Most of society is operating on severely flawed assumptions. I don't see how it can be morally justified that complexity is not a problem when most of the population is being deceived by the complexity. Not only that, but there is no escape hatch. Even if you're intelligent and you take the time to learn about how the system works, there's no way for you to take advantage of it unless you have significant capital to invest... Meaning, you're already a beneficiary of the system (in which case you probably don't need an escape hatch anyway). I don't see any moral justification for it. It only benefits insiders who control the system. Insider trading in all but name.
  - kemotep 3y ago
    What would be an acceptable “escape hatch” that would primarily benefit the more vulnerable and less well off people in society that does not also benefit those with lots of capital? Like how would this alternative system be more moral than fractional reserve banking and fiat currency?
thisgoesnowhere 3y ago
Coercion is such a meaningless term now that libertarians have got ahold of it. Coercion, in this case, is when a system exists that you don't understand yet you have to follow it's rules. Which is why mom is clearly being coerced into using the internet. Don't get me started on how my dad get coerced by logistic networks when he gets a package delivered? Abstraction and interfaces into complicated systems are the best part of the modern economy yet somehow you found the opposite conclusion.