Debt: The First 5000 Years by David Graeber

Rating: ★★★★

Debt is a sprawling book, so much so that I think its title doesn’t do it justice. It’s not just about debt: it’s about governments, money, and markets; it’s about war and slavery; it’s about philosophy and religion; it’s about anthropology, economics, and history as disciplines. It’s also engaging and very readable!

I loved this book even though Graeber has clear sympathies for certain groups. The last chapter is a bit of mess that gets some basic stuff wrong (the fact that other countries have a lot of US debt doesn't really mean they're paying tribute to us, it many cases it's kind of the opposite, a bribe to remain in the American sphere of influence), but if you go into this book knowing Graeber's point of view, it's great.

Here's a list of ideas I found interesting in Debt:


There's no evidence of money emerging from a barter economy or barter economies really existing. The only cases where barter has been recorded are times when people accustomed to using money didn't have access to it.

The standard narrative is that first there was barter, then money, and then credit; what is more likely is that credit came first, then money, and only then barter.

Mesopotamia and the emergence of money

Sumerian money wasn't created for commercial transactions but was instead made by bureaucrats to keep tracks of resources and shuffle them around. It was an accounting tool for administration. The earliest observable markets were effectively spillovers from the administrative state in Mesopotamia.

States and markets

States created markets, and markets require states, and neither could continue in their current forms without one another. Markets didn't emerge spontaneously – governments used money to create markets to administrate more easily. A simple example: a state gives its soldiers coins, and it demands its other subjects pay it the coins back. Subjects provide goods and services to soldiers so they are able to pay this tax. The government now doesn't have to provision its army directly because a market emerges.

The Inuit hunter passage

There's this striking passage about an anthropologist, Freuchen, who lived with Inuit people for some time. He went hunting with them, but didn't catch anything, and so when they shared their food with him, he thanked them. They were insulted.

"Up in our country we are human!" said the hunter. "And since we are human we help each other. We don't like to hear anybody say thanks for that. What I get today you may get tomorrow. Up here we say that by gifts one makes slaves and by whips one makes dogs."

Instead of seeing himself as human because he could make calculations, the hunter insists being truly human means refusing to keep score. He is aware of the propensity to calculation: that's why he said what he did.

The harm of certain debts

Graeber points out that revolutions to end slavery and castes are rare in history, but rebellions over debt are common. He says that while slavery and castes implies an inherent, unchangable inequality, in a debt relationship, there was a time when the two parties were equal. They aren't now, but there's a potential to be on equal footing again. It's more personally offensive to be treated poorly against this background of potential equality.

"Politically, it is never a particularly good idea to first tell people they are your equals, and then humiliate and degrade them"

Cash and violence

Coinage was more common in violent times because gold and silver are possible to steal while credit relationships between people can't be stolen. Much of the precious metal that was turned into coins came from raided temples. While everyday transactions were typically done on personal credit, pirates and kidnappers used cash to maintain anonymity.

Cash and pure greed and charity

Human economies (ones that aren't centered on cash and that have long-lasting relationships) assume motives behind actions to be complex: there's no overriding assumption that the most self-interested motive is necessarily the real one. You might be trying to help a friend or hurt an enemy. It's similar in early credit markets where the value of an IOU depends on personal character.

Cash transactions are only about figuring out proportions, estimating quality, and getting the best deal for yourself. When coinage was widespread, the idea that profit and self advantage were paramount followed.

Religions of the time reacted against this thinking: they emphasized pure greed and pure charity, concepts that barely existed before. Pure greed and pure charity are complementary, and neither can be imagined without the other – they could only arise in an environment that inisnts on single-minded behavior. In human economies, it seems almost impossible for people to conceive of pure selfishness and pure altruism: pure altruism is antisocial and inhuman.

Cash and science

Greek philosophers started talking about an abstract substance that made up everything around the same time that coinage emerged – that's basically cash! Liquidity means convertibility into anything else.