Society

Economics

Our debt to David Graeber
The anthropologist’s ideas about finance are just as relevant as ever

David Graeber in 2016. Image © Alamy

Capitalism. Bullshit jobs. Debt. Wasteful bureaucracy. Global justice. Since David Graeber passed away on September 2, obituaries have repeatedly pointed to the unusual breadth in his work.

Both as a scholar and an activist, Graeber refused to stick to one narrow topic, preferring instead to forge his own intellectual path and let his readers do the work of drawing links between his books and actions. As a result, although his books are certainly quotable, it’s difficult to come up with one catchphrase that sums up his life’s work. (Graeber has long rejected the label “anarchist anthropologist”.) 

But common threads certainly do exist, and you don’t have to dig too deep to find them. At first glance it may seem like Graeber took quite a leap between Direct Action: An Ethnography (2009) and Bullshit Jobs: A Theory (2018). Yet the logic is clear: both books are part of his overall project of not only critiquing capitalism, but also questioning how we think about society at large and challenging us to actively change it.   

For me, though, his standout book is 2011’s Debt: The First 5,000 Years. And it’s not just me. Debt was a bestseller, and Graeber described it as the book “which virtually everyone seems to have read”. But why should a book about the history of debt capture the imaginations of so many people?

My hunch is that people find Debt compelling because it asks hard questions about how we understand the world of finance. It challenges us to overthrow all our assumptions about how debt originated and how we should engage with it as moral beings.

First, Graeber tells us that our microeconomics textbooks are completely wrong in claiming that humans developed barter systems, then payments, then debt. In fact, he says, credit came first. People don’t necessarily have goods on hand to swap at all times, and nor do they want to spend days running around their village trying to undertake a series of exchanges that will eventually turn their chicken into a bushel of grain. True barter only developed later in systems that already had money, and it seems to have had more of a ritual function than an economic one. Instead, people used various ways to remember who owed what to whom, including tally sticks and memory.

This debunking of barter’s history matters because Graeber made this claim in the years closely following the global financial crisis. This period saw the emergence of a student movement calling for “pluralist economics” to be taught in universities. Seeing how the financial system had failed, students wanted a broader financial education that covered real life as well as economic theory. Graeber used history and anthropology to challenge economics in the ivory tower. And it wasn’t just students who appreciated this shift: his book has proved just as popular among established economists as among novices.

Second, Graeber stopped us in our tracks by asking us if we really have a moral obligation to pay our debts. Why should we pay back our bank? Or our neighbour? Or our government?

We think it’s common sense that one must pay one’s debts, but as Graeber shows, our ideas about debt and morality are cultural, not natural. In numerous cultures, creditors have been depicted as a kind of devil sucking away the lifeblood of their victims. Today, loan sharks and debt collectors are seen to be evil, while people who default on their loans are viewed as lazy or morally weak. (As some put it, “debt is bad, credit is good”.)

In contrast, Graeber argues that debt is actually a kind of social glue binding us all together. This idea is not new to Graeber. For over a century, anthropologists have documented how reciprocal giving and trading bind communities together. In contemporary times, a great example of this is buying rounds of drinks at the pub. I buy, then you buy. We trust each other, so it works. It’s an expression of a relationship. And if you have to leave before it’s your turn, you’re obligated to come to the pub with me again so you can pay me back. Simply transferring the money may seem offensive. That’s how debt works as a social glue.

On a higher level, Graeber points out that paying one’s debts isn’t actually how the financial system works. Debt cancellation has been a common occurrence throughout history (such as the “jubilee” in Mesopotamia). And if everyone did actually have to pay their debts, then there would be nothing to stop banks from giving out irresponsible loans, and the whole system would fall apart.

This systemic failure of the financial system is essentially what happened in the lead-up to the global financial crisis of 2008, as certain investment banks competed to be among those who were deemed “too big to fail” so that they could make far riskier investments than they normally would, knowing that they would be bailed out by their host governments while mortgagees lost their homes. (For a great discussion of this, I recommend a book by another anthropologist, Gillian Tett, called Fool’s Gold).

Such financial sector exceptionalism has come under fire in many countries, including Australia. The 2017–2019 banking royal commission examined the financial sector’s failures on issues including money laundering for drug syndicates, ignoring terrorism financing, disregarding statutory reporting responsibilities, and improper behaviour in foreign exchange trading. Yet despite the fact that we have such clear examples of flaws in our banking system, our ideas about debt remain entrenched.

If financial institutions don’t have to pay their debts or behave in society’s interest why should the rest of us?

The question of debt has recently risen again in public debate regarding the Australian government’s JobKeeper scheme. Arguing against extending the scheme to casual workers, those on temporary visas, academics and arts workers, Treasurer Josh Frydenberg commented that the scheme is “a debt that the country will pay for years to come” and repeatedly claimed that “we had to draw the line somewhere”. But this is a moral argument disguised as an economic one. It draws the line between who is deemed worthy and who is not, who gets public support and who does not. If Graeber has taught us anything, it’s to pay less attention to the monetary values quoted, and more attention to the human values.

Graeber intended for Debt to stimulate a public conversation about debt that should have emerged from the ashes of the GFC, but it didn’t because our thinking about society has become so caught up in economic language that the present system is naturalised. Debt makes it clear that, if we are to even think about avoiding another global financial crisis, then we need to cast aside our economic assumptions and take a fresh look at the evidence that is available to us.

Graeber laid a lot of groundwork for us. Our debt to him is to look behind the assumptions and numbers presented to us, and ask fresh questions about what kind of society we want and what kind of financial system can support it. In his words, “in the larger scheme of things, just as no one has the right to tell us our true value, no one has the right to tell us what we truly owe.”

Erin B. Taylor

Dr Erin B. Taylor is an associate in the Institute for Culture and Society at Western Sydney University, and co-founder of Canela Consulting in the Netherlands. She holds a PhD in anthropology from the University of Sydney.

@erinbtaylor_

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