First Five Thousand Years of Debt

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* Book: Debt: The First 5,000 Years. David Graeber. Melville House Publishing, 2011

Video: David Graeber on the First Five Thousand Years of Debt


David Graeber:

"This book is a history of debt, then, but it also uses that history as a way to ask fundamental questions about what human beings and human society are or could be like—what we actually do owe each other, what it even means to ask that question. As a result, the book begins by attempting to puncture a series of myths—not only the Myth of Barter, which is taken up in the first chapter, but also rival myths about primordial debts to the gods, or to the state—that in one way or another form the basis of our common-sense assumptions about the nature of economy and society. In that common-sense view, the State and the Market tower above all else as diametrically opposed principles. Historical reality reveals, however, that they were born together and have always been intertwined. The one thing that all these misconceptions have in common, we will find, is that they tend to reduce all human relations to exchange, as if our ties to society, even to the cosmos itself, can be imagined in the same terms as a business deal. This leads to another question: If not exchange, then what? In chapter five, I will begin to answer the question by drawing on the fruits of anthropology to describe a view of the moral basis of economic life; then return to the question of the origins of money to demonstrate how the very principle of exchange emerged largely as an effect of violence—that the real origins of money are to be found in crime and recompense, war and slavery, honor, debt, and redemption. That, in turn, opens the way to starting, with chapter eight, an actual history of the last five thousand years of debt and credit, with its great alternations between ages of virtual and physical money. Many of the discoveries here are profoundly unexpected: from the origins of modern conceptions of rights and freedoms in ancient slave law, to the origins of investment capital in medieval Chinese Buddhism, to the fact that many of Adam Smith’s most famous arguments appear to have been cribbed from the works of free-market theorists from medieval Persia (a story which, incidentally, has interesting implications for understanding the current appeal of political Islam). All of this sets the stage for a fresh approach to the last five hundred years, dominated by capitalist empires, and allows us to at least begin asking what might really be at stake in the present day.

For a very long time, the intellectual consensus has been that we can no longer ask Great Questions. Increasingly, it’s looking like we have no other choice."


What better moment, it seems to me, than to start reexamining the historical record and to put our situation in a larger - much, much larger - context. So that's what I did. A few examples of what I turned up (much of which, I must admit, surprised even me):

  • that virtual money is nothing new - in fact it is the original form of money
  • that the first word for "freedom" recorded in any human language is a Sumerian word for debt relief
  • that our current core conceptions of freedom and rights trace back to Roman slave law
  • that most rebellions, insurrections, and revolutions in world history have been over issues of debt
  • that rather than markets and states being in some way opposed principles, markets - particularly ones that operated on cash instead of credit - largely emerged as the side-effect of military operations, and through most of history were maintained through government policy
  • that contemporary free market ideology (and in fact many of Adam Smith's specific phrases and examples, such as the pin factory) is derived from Medieval Islam."


  1. One: On The Experience of Moral Confusion 1
  2. Two: The Myth of Barter 21
  3. Three: Primordial Debts 43
  4. Four: Cruelty and Redemption 73
  5. Five: A Brief Treatise on the Moral Grounds of Economic Relations 89
  6. Six: Games with Sex and Death 127
  7. Seven: Honor and Degradation, or, On the Foundations of Contemporary Civilization 165
  8. Eight: Credit Versus Bullion, And the Cycles of History 211
  9. Nine: The Axial Age (800 BC–600 AD) 223
  10. Ten: The Middle Ages (600 AD–1450 AD) 251
  11. Eleven: Age of the Great Capitalist Empires (1450–1971) 307
  12. Twelve: (1971–The Beginning of Something
  13. Yet to Be Determined) 361

Key Theses Summary

Charles Eisenstein:

"Debt: The First 5000 Years covers a vast sweep of history, anthropology, and political economy, arguing not so much for a single thesis as for a braid of complementary ideas. Among them are:

  • That money originated as “social currencies” used to rearrange relationships among human beings (marriage, funerals, blood money, and other social functions), and was not used to buy and sell things. Indeed, this kind of money is to be found even in societies without a significant division of labor.
  • That the first money used for commerce took the form of credit: tallies of transactions and loans denominated in a common unit of account and periodically settled by delivery of various commodities.
  • That the conflation of these two different kinds of money led to debt peonage, slavery, the demotion of women's status, and other iniquities that one might expect to happen when human relationships are mediated by the same currency as commercial transactions.
  • That much of the psychology and morality around money traces its origins to the violence and slavery that have been part of creditor-debtor relationships for thousands of years. War and slavery were crucial in creating the economy we know today, which should not be surprising, as our economic habits still encode the anxiety one might expect from such origins. As well, they perpetuate violence and, if not outright slavery, debt servitude to this day.
  • That history has alternated between periods of credit money and coinage, with the latter corresponding to times of greater violence, social chaos, slavery, and the repression of women. So for example, the Middle Ages saw the virtual abolition of slavery and the flowering of complex credit relationships facilitating trade across the Indian Ocean and beyond. Coins were seldom used. Compared to the Axial Age that preceded it, it was a time of relative peace and prosperity, ending with the rise of Europe and the influx of vast amounts of silver from the New World. A new age of coinage began.
  • That markets have never been “free” in the sense of being separate from government, but, to the contrary, were created by governments to facilitate their acquisition of various goods (especially for their armies). They have been intertwined ever since.
  • That all major world religions grew in response to money, whether informed by the beliefs of people living in a money economy, or in reaction to its evils.
  • That the origin of capitalism as we know it today is “the story of how an economy of credit was converted into an economy of interest.” Debt, he says, is the primary instrument of colonization whether internal or abroad – keeping in mind that behind the man with the ledger is a man with a gun. Moreover, the enforcement of debts is key to maintaining the political power relationships the prevail today.
  • That the invasion of market relations into every sphere of life has always been accompanied by violence. War, debt, and the market are inextricably linked. Even today, our money system is based mainly on the monetization of government war debts. If there is one persistent theme to this book, it is that our association of debt repayment with morality is false; that, indeed, the debt relations that hold today are rooted in a history of violence; that debt and money itself are social creations and not unalterable facts of nature; that our understanding of human nature is deeply colored by the market-based, debt-based world we live in. The world could be different. We are right to want it to be different."



with Jay Kernis, CNN

David Graeber, Money was always virtual:

"The most remarkable thing I discovered in my historical researches is that virtual money is nothing new. Actually, it's the original form of money.

Back in ancient Mesopotamia, people didn't go to the bar or market with tiny bits of silver; they put things on the tab. Merchants used expense accounts. Commerce meant trust. What we now think of as cash, in contrast -– gold and silver coinage, and with them, impersonal, cash markets –- was basically invented much later, mostly to pay soldiers, and as a side-effect of military operations.

If you look at the last five thousand years of history, what you find is an alternation of periods where money basically means credit, periods of mostly virtual money, and periods where it's assumed to be a physical thing. It starts as credit.

Then around the 7th century BC, you see, simultaneously in Greece, India, and China, the invention of coinage -– and for maybe a thousand years after that, vast empires, with huge standing armies paid in cash, cash markets, where they're among other things selling all the slaves conquered in the wars, most of whom end up working in the mines producing more gold and silver to pay the troops with.

In the Middle Ages it all shifts back again –- the great religions, which really started as anti-war movements, take over, the armies are disbanded, cash disappears, people go back to virtual money (both checks and paper money for instance were Medieval inventions.)

Then, after 1492 it swings the other way, again –- we're back to gold and silver money, vast empires, slavery comes back (and some might argue its still here –- if Plato or Aristotle were alive today I doubt they'd see much distinction between selling yourself and renting yourself, so they'd probably see most Americans as, effectively, slaves). That's the period of history that's just ending now.

This is epochal. Changes on this scale only happen once every 500 or even 1000 years.

What will it mean? Well obviously it's impossible to say for sure. And to a large degree it's really up to us how it all turns out.

But one thing I have noticed is that in periods dominated by virtual money, it becomes impossible to deny that money is just a promise, that it's just a set of understandings we have with one another — and therefore, that you need some kind of watchdog institution in place to make sure things don't get completely out of hand.

In the ancient Near East, they used to simply declare periodic debt cancellations. The Medieval religious authorities tended to ban interest payments outright. Always there was some kind of overarching institution, usually bigger than any government, to protect debtors, to prevent the bulk of the population from simply being reduced to slaves (which, of course, is how most indebted Americans feel most of the time.)

Of course this time around, the first thing we did was create the IMF, a vast overarching institution designed basically to protect creditors. But (most people don't know this) that didn’t work out too well. The IMF has been effectively kicked out of Asia and Latin America for some time now, and now, most recently, from Egypt. So that model has definitely failed.

I think it's significant that growing opposition to the "debt crises" being inflicted on people in Europe, in places like Greece and Spain, is a call for "real democracy."

What they're effectively saying is, "In 2008, the financial elites let the cat out of the bag when they refused to let their banks fail like the textbooks say they were supposed to. As a result, we learned that the story about capitalism we'd been hearing for all these years wasn't really true. Markets don't really run themselves, and debts can be finagled out of existence if you really want them to be.

"But if that's true, if debt is just a promise and promises can be renegotiated, then if democracy is going to mean anything, it has to mean that it’s us, the public, that gets the ultimate say over how that happens – not some hedge fund manager.”

If they win, then we're going to be talking about a very different economic system. Whether you even want to call it "capitalism" is probably just a matter of taste. But it gives you a sense of just how much is at stake." (

with Alex Bradshaw

Alex Bradshaw (AB): Your latest book, Debt: The First 5000 Years, explores the origins of debt. What were some of the implications for communities and individuals when debt became a significant factor in people's lives?

David Graeber (DG): Well, one reason I wrote this book is that debt has come to pervade every aspect of our lives. International relations are all about debt, modern nation-states run on deficit financing, and consumer debt drives the economy—yet no one has, to my knowledge, ever written a history of the phenomenon. Even though people have written histories of almost anything else you can possibly imagine.

What I discovered was that in some ways, all this is nothing new. It’s probably fair to say that most human beings have been debtors at least at some point in their lives. Similarly, most uprisings, revolts, insurrections, mass political mobilizations in human history have been about debt—for instance, Athenian democracy or the Roman Republic largely emerged as a way of settling debt crises of one sort or another. Usually, in the end, enduring political regimes have had to come up to some solution to the debt trap, to avoid having the bulk of their population become effectively (or literally) slaves or peons to their creditors.

There’s two sort of solutions, usually. One, typical of ages of credit money—where money itself is assumed to be a social creation, so many IOUs or promises—is to impose some kind of direct controls. For instance, ancient Mesopotamian kings would often just declare a clean slate, all debts would be wiped out and people would start over again. Or you could ban the taking of interest, as both Christianity and Islam did in the Middle Ages. The other solution, typical of periods of actual, physical money, such Classical Antiquity or the last five hundred years or so, is more the imperial solution: insist that debts are sacred and not to be tampered with, and throw money at the problem, create standing armies and pay them, figure out ways to distribute cash directly to your subjects—or at least social welfare programs—so they don’t end up up to the ears and lose their freedom. This of course only works in the imperial centers (cities like Athens and Rome which literally gave wealth away to their citizens), elsewhere, you usually tend to have massive debt enslavement.

Looked at in these terms, we can see that, as we begin to move back to a system of virtual credit money, that solution is breaking down as well. As a result, everyone, even in countries like the US, are being reduced to effective debt slaves. The greatest social evil of antiquity was precisely this: people would fall so deeply in debt that they would end up selling their children into slavery, even, finally, themselves. But you know, if Plato or Aristotle were somehow magically transported to modern America, would he really see matter here as all that different? Sure, we no longer sell ourselves to employers, we rent ourselves. But for anyone from the ancient world, such a distinction would be at best a legalism. They’d probably consider most Americans to be debt slaves, and would they really be so wrong to do so?

AB: When we discuss debt, we also have to discuss the concept of money. What is the conventional narrative about why money came to exist, and did your studies of debt contradict this narrative? On this note, what is the essential connection between money and debt?

DG: If you pick up an economic textbook, it’ll tell you that once upon a time (it literally deserves such an introduction, it’s a fairy tale) there was no money, so people engaged in barter: “I’ll give you twenty chickens for that cow”, that sort of thing. If the guy doesn’t want chickens, you’re out of luck—so you have to go invent money. Gradually, this gives birth to more sophisticated financial forms like paper money, complex credit operations, securitized derivatives… Problem is that, as anthropologists have known for years, it just isn’t true. No one has ever found an economy based on barter (and believe me, they’ve been looking.) Actually it’s not just wrong, it’s backwards: credit systems come first, coinage is invented at least two thousand years later, and barter… well, when it does occur, it’s usually because people are used to using money, but somehow the money supply disappears, as it did, say, in Russia with the collapse of the Soviet Union. But if credit systems are the original form of money, that gives great support to those economists—and among economists, they are decidedly the minority—who argue that money really is debt; or, better perhaps, a system of accounting that allows us to keep track of credits and debts. That realization has profound implications.

AB: The discourse regarding financial markets only tolerates so much dissent; the most common dogma states that financial markets are merely a “natural” human occurrence. Does a critical history of debt undermine the view that financial markets proper have a benign, benevolent tradition? Further, could you explain your claim that markets are founded on a “logic of violence”?

DG: I find it somewhat amusing that a lot of conventional thinkers, when they hear me talk about ancient clean slates, Jubilees and whatnot, respond “but that couldn’t really be true! It would have a terrible effect on economic activity.” Well, perhaps, but what they don’t take into account is that “economic activity” of that sort, the sort which was based on cash or precisely quantified, legally enforced loans (rather than relations based on honor and trust between people with genuine moral relations with one another)—well, for most of human history, that was largely a side-effect of military operations. Coinage is invented to pay soldiers, and markets that used them tended to crop up alongside military camps. Similarly the modern banking system arises to help fund European wars. Central banks, in turn, institutionalized that system, since the debts they manage are basically government war debt, and always have been—at least back to 1694, when King William II offered some London merchants who’d made a loan of £1.2 million to fight a war in France the right to call themselves “The Bank of England” and loan that money he owed them to others in the form of banknotes, thus bringing our current currency system into existence. Modern money is still basically government war debt.


AB: Finally, to pull this conversation back to current events, would you argue that many current resistance movements – and I'm thinking of movements opposing neoliberal policy in Europe, including austerity measures – are based largely upon issues centering around debt, or debt forgiveness? Would you say that most examples of insurrections, revolutions, or general resistance are reactions to draconian debt policies?

DG: The great Classicist Moses Finley suggested that there was basically one single revolutionary program in all of antiquity: “abolish the debts, and redistribute the land.” The interesting thing is this is still much more true than we imagine. Take the recent revolutions in the Middle East. One of the biggest factors in the Egyptian revolution, hardly talked about, is microcredit. Gamal Mubarak, who used to work for Bank of America, decided he wanted to move away from the old welfare state model to a microcredit development model; since no one had any collateral to repossess, the police then became the guys who showed up to break your legs. Hence the universal outrage over police brutality.

When the Saudis panicked that the revolution might reach their own country, what did they do? Well, aside from beef up the security forces—they declared a Mesopotamian-style debt forgiveness for everyone in the Kingdom. (They still have a king so they can still do things like that.) Then there’s the ongoing revolts in Greece and Spain, like the Egyptian revolution, in the name of “real democracy.” There is a reason, I think, these things are happening now. What we learned in 2008 is that everything they told us about markets was a lie. Markets don’t run themselves, and debts don’t always have to be paid. If we’re talking about the real big players, the rules are different, even 13 trillion in gambling debts (by some estimations) can be made to disappear. We can’t deny that money is at core a political phenomenon, not an economic one—or at the very least, that it has now become so. But if that’s the case, then if democracy is to mean anything, it has to mean that it’s not just the richest 1% of the population that gets to decide who had to keep the exact letter of their promises and whose promises can be scotched or renegotiated… but everyone." (

with Philip Pilkington

"Interview conducted by Philip Pilkington, a journalist and writer based in Dublin, Ireland.

Philip Pilkington: Let’s begin. Most economists claim that money was invented to replace the barter system. But you’ve found something quite different, am I correct?

David Graeber: Yes there’s a standard story we’re all taught, a ‘once upon a time’ — it’s a fairy tale.

It really deserves no other introduction: according to this theory all transactions were by barter. “Tell you what, I’ll give you twenty chickens for that cow.” Or three arrow-heads for that beaver pelt or what-have-you. This created inconveniences, because maybe your neighbor doesn’t need chickens right now, so you have to invent money.

The story goes back at least to Adam Smith and in its own way it’s the founding myth of economics. Now, I’m an anthropologist and we anthropologists have long known this is a myth simply because if there were places where everyday transactions took the form of: “I’ll give you twenty chickens for that cow,” we’d have found one or two by now. After all people have been looking since 1776, when the Wealth of Nations first came out. But if you think about it for just a second, it’s hardly surprising that we haven’t found anything.

Think about what they’re saying here – basically: that a bunch of Neolithic farmers in a village somewhere, or Native Americans or whatever, will be engaging in transactions only through the spot trade. So, if your neighbor doesn’t have what you want right now, no big deal. Obviously what would really happen, and this is what anthropologists observe when neighbors do engage in something like exchange with each other, if you want your neighbor’s cow, you’d say, “wow, nice cow” and he’d say “you like it? Take it!” – and now you owe him one. Quite often people don’t even engage in exchange at all – if they were real Iroquois or other Native Americans, for example, all such things would probably be allocated by women’s councils.

So the real question is not how does barter generate some sort of medium of exchange, that then becomes money, but rather, how does that broad sense of ‘I owe you one’ turn into a precise system of measurement – that is: money as a unit of account?

By the time the curtain goes up on the historical record in ancient Mesopotamia, around 3200 BC, it’s already happened. There’s an elaborate system of money of account and complex credit systems. (Money as medium of exchange or as a standardized circulating units of gold, silver, bronze or whatever, only comes much later.)

So really, rather than the standard story – first there’s barter, then money, then finally credit comes out of that – if anything its precisely the other way around. Credit and debt comes first, then coinage emerges thousands of years later and then, when you do find “I’ll give you twenty chickens for that cow” type of barter systems, it’s usually when there used to be cash markets, but for some reason – as in Russia, for example, in 1998 – the currency collapses or disappears.

PP: You say that by the time historical records start to be written in the Mesopotamia around 3200 BC a complex financial architecture is already in place. At the same time is society divided into classes of debtors and creditors? If not then when does this occur? And do you see this as the most fundamental class division in human history?

DG: Well historically, there seem to have been two possibilities.

One is what you found in Egypt: a strong centralized state and administration extracting taxes from everyone else. For most of Egyptian history they never developed the habit of lending money at interest. Presumably, they didn’t have to.

Mesopotamia was different because the state emerged unevenly and incompletely. At first there were giant bureaucratic temples, then also palace complexes, but they weren’t exactly governments and they didn’t extract direct taxes – these were considered appropriate only for conquered populations. Rather they were huge industrial complexes with their own land, flocks and factories. This is where money begins as a unit of account; it’s used for allocating resources within these complexes.

Interest-bearing loans, in turn, probably originated in deals between the administrators and merchants who carried, say, the woollen goods produced in temple factories (which in the very earliest period were at least partly charitable enterprises, homes for orphans, refugees or disabled people for instance) and traded them to faraway lands for metal, timber, or lapis lazuli. The first markets form on the fringes of these complexes and appear to operate largely on credit, using the temples’ units of account. But this gave the merchants and temple administrators and other well-off types the opportunity to make consumer loans to farmers, and then, if say the harvest was bad, everybody would start falling into debt-traps.

This was the great social evil of antiquity – families would have to start pawning off their flocks, fields and before long, their wives and children would be taken off into debt peonage. Often people would start abandoning the cities entirely, joining semi-nomadic bands, threatening to come back in force and overturn the existing order entirely. Rulers would regularly conclude the only way to prevent complete social breakdown was to declare a clean slate or ‘washing of the tablets,’ they’d cancel all consumer debt and just start over. In fact, the first recorded word for ‘freedom’ in any human language is the Sumerian amargi, a word for debt-freedom, and by extension freedom more generally, which literally means ‘return to mother,’ since when they declared a clean slate, all the debt peons would get to go home.

PP: You have noted in the book that debt is a moral concept long before it becomes an economic concept. You’ve also noted that it is a very ambivalent moral concept insofar as it can be both positive and negative. Could you please talk about this a little? Which aspect is more prominent?

DG: Well it tends to pivot radically back and forth.

One could tell the history like this: eventually the Egyptian approach (taxes) and Mesopotamian approach (usury) fuse together, people have to borrow to pay their taxes and debt becomes institutionalized.

Taxes are also key to creating the first markets that operate on cash, since coinage seems to be invented or at least widely popularized to pay soldiers – more or less simultaneously in China, India, and the Mediterranean, where governments find the easiest way to provision the troops is to issue them standard-issue bits of gold or silver and then demand everyone else in the kingdom give them one of those coins back again. Thus we find that the language of debt and the language of morality start to merge.

In Sanskrit, Hebrew, Aramaic, ‘debt,’ ‘guilt,’ and ‘sin’ are actually the same word. Much of the language of the great religious movements – reckoning, redemption, karmic accounting and the like – are drawn from the language of ancient finance. But that language is always found wanting and inadequate and twisted around into something completely different. It’s as if the great prophets and religious teachers had no choice but to start with that kind of language because it’s the language that existed at the time, but they only adopted it so as to turn it into its opposite: as a way of saying debts are not sacred, but forgiveness of debt, or the ability to wipe out debt, or to realize that debts aren’t real – these are the acts that are truly sacred.

How did this happen? Well, remember I said that the big question in the origins of money is how a sense of obligation – an ‘I owe you one’ – turns into something that can be precisely quantified? Well, the answer seems to be: when there is a potential for violence. If you give someone a pig and they give you a few chickens back you might think they’re a cheapskate, and mock them, but you’re unlikely to come up with a mathematical formula for exactly how cheap you think they are. If someone pokes out your eye in a fight, or kills your brother, that’s when you start saying, “traditional compensation is exactly twenty-seven heifers of the finest quality and if they’re not of the finest quality, this means war!”

Money, in the sense of exact equivalents, seems to emerge from situations like that, but also, war and plunder, the disposal of loot, slavery. In early Medieval Ireland, for example, slave-girls were the highest denomination of currency. And you could specify the exact value of everything in a typical house even though very few of those items were available for sale anywhere because they were used to pay fines or damages if someone broke them.

But once you understand that taxes and money largely begin with war it becomes easier to see what really happened. After all, every Mafiosi understands this. If you want to take a relation of violent extortion, sheer power, and turn it into something moral, and most of all, make it seem like the victims are to blame, you turn it into a relation of debt. “You owe me, but I’ll cut you a break for now…” Most human beings in history have probably been told this by their debtors. And the crucial thing is: what possible reply can you make but, “wait a minute, who owes what to who here?” And of course for thousands of years, that’s what the victims have said, but the moment you do, you are using the rulers’ language, you’re admitting that debt and morality really are the same thing. That’s the situation the religious thinkers were stuck with, so they started with the language of debt, and then they tried to turn it around and make it into something else." (

with J. Gabriel Boylan

"IDEAS: You’ve done academic research on debt and valuation before, but the history of debt is a sprawling project. Why tackle it?

GRAEBER: It was really much to do with my political involvement, a lot of which revolved around debt. But once you’re onto it, you start noticing it everywhere. Almost all political issues turn on debt, and debt has this incredible power. That’s why I started the book with an anecdote where a liberal do-gooder lawyer actually thinks that paying debts is a fundamental moral obligation. The notion of, “Well, we have to pay our debts,” seems to be such a powerful argument that it’s the trump card of anyone trying to do any type of political demagoguery.

IDEAS: A lot of people think of barter, rather than debt, as the earliest kind of economy. But you write that pure barter economies never existed?

GRAEBER: As an anthropologist, it’s kind of a professional pet peeve. We’ve been looking for this mythical land of barter for the last 200 years, so we would have found it by now … .The spot trade, where it’s in the moment and you never see each other again, this is the opposite of any kind of exchange in primitive economies. In order to create the idea that life is just a series of exchanges we can all walk away from - a very antisocial notion of what people are about - you have to eradicate all obligations that people have to each other.

IDEAS: In the book you identify a move from human economies, those about human relationships, to commercial economy, where anything can be quantified. How does that happen?

GRAEBER: On some level all economies are human economies, because what you’re trying to do is keep people alive so they can do the things that are important to them. What I meant was more specific, that people use money to maintain relationships. So among the Lele people in Africa every time you visit your uncle you give him a little money. It’s way of saying, “Hi, I like you.” It’s also a sign of its own inadequacy; it’s recognized it could never be commensurate with human emotion or life. Or say you kill someone’s brother: well, you give him 12 cows, but you couldn’t suggest that these 12 cows are actually of the same value. That would just make people more angry. But the substitution is where commercial economy develops, where it is actually worth what you pay.

IDEAS: And this can eventually include human life? Slavery is something you discuss a lot in the book.

GRAEBER: So you killed somebody’s brother; they are going to want to an exact sum and not a penny less or this is war. That violent feeling starts you on the road to quantifying everything. But with slavery is where it flips. When you take people out of familial bonds, when they are totally loosened from society, you get to a point where they are totally quantifiable.

IDEAS: You split history into periods that favored either credit or bullion economies. How do these two types of economy affect how we treat debt?

GRAEBER: Credit money is the original form, and then you have this 1,000-year period where coins come mainly out of the building of empires and to pay soldiers, and then when the empires go, the coins do too. In the Middle Ages you go back to credit systems, very sophisticated in some times and places. Then we have another time of bullion money, since the 16th or 17th century, and that’s what’s going away now … .During those periods with gold or silver, debts tend to seem more like sacred obligations, and in the transition to credit there’s two problems. Both are happening right now. One thing is, how do you stop people just speculating ridiculously, and that’s why we have these huge bubbles. And the other thing is how do you make sure that the 1 or 2 percent of the population that has resources doesn’t end up enslaving the rest because of debt traps, which anyone will admit are vicious circles.

IDEAS: Have we learned anything from the various debt crises and default scares of the past few years?

GRAEBER: I think 2008 was a fundamental break. What we learned was that the line they were feeding us turns out not to have been true; that markets take care of themselves and that these are really, really smart people and they know what they’re doing so just shut up. The other thing we learned is that you have to pay your debts, except when you’re “too big to fail.” Apparently Argentina, the entire country, was not too big to fail by that reckoning, but Bank of America is. That’s why people are so angry and cynical." (


The Moral Confusion around Debt

David Graeber:

"Historically, credit money comes first, and what we are witnessing today is a return of assumptions that would have been considered obvious common sense in, say, the Middle Ages—or even ancient Mesopotamia.

But history does provide fascinating hints of what we might expect. For instance: in the past, ages of virtual credit money almost invariably involve the creation of institutions designed to prevent everything going haywire—to stop the lenders from teaming up with bureaucrats and politicians to squeeze everybody dry, as they seem to be doing now. They are accompanied by the creation of institutions designed to protect debtors. The new age of credit money we are in seems to have started precisely backwards. It began with the creation of global institutions like the IMF designed to protect not debtors, but creditors. At the same time, on the kind of historical scale we’re talking about here, a decade or two is nothing. We have very little idea what to expect.


"Arguments about debt have been going on for at least five thousand years. For most of human history—at least, the history of states and empires—most human beings have been told that they are debtors. Historians, and particularly historians of ideas, have been oddly reluctant to consider the human consequences; especially since this situation—more than any other—has caused continual outrage and resentment. Tell people they are inferior, they are unlikely to be pleased, but this surprisingly rarely leads to armed revolt. Tell people that they are potential equals who have failed, and that therefore, even what they do have they do not deserve, that it isn’t rightly theirs, and you are much more likely to inspire rage. Certainly this is what history would seem to teach us. For thousands of years, the struggle between rich and poor has largely taken the form of conflicts between creditors and debtors—of arguments about the rights and wrongs of interest payments, debt peonage, amnesty, repossession, restitution, the sequestering of sheep, the seizing of vineyards, and the selling of debtors’ children into slavery. By the same token, for the last five thousand years, with remarkable regularity, popular insurrections have begun the same way: with the ritual destruction of the debt records—tablets, papyri, ledgers, whatever form they might have taken in any particular time and place. (After that, rebels usually go after the records of landholding and tax assessments.) As the great classicist Moses Finley often liked to say, in the ancient world, all revolutionary movements had a single program: “Cancel the debts and redistribute the land.”

Our tendency to overlook this is all the more peculiar when you consider how much of our contemporary moral and religious language originally emerged directly from these very conflicts. Terms like “reckoning” or “redemption” are only the most obvious, since they’re taken directly from the language of ancient finance. In a larger sense, the same can be said of “guilt,” “freedom,” “forgiveness,” and even “sin.” Arguments about who really owes what to whom have played a central role in shaping our basic vocabulary of right and wrong. The fact that so much of this language did take shape in arguments about debt has left the concept strangely incoherent. After all, to argue with the king, one has to use the king’s language, whether or not the initial premises make sense.

If one looks at the history of debt, then, what one discovers first of all is profound moral confusion. Its most obvious manifestation is that most everywhere, one finds that the majority of human beings hold simultaneously that (1) paying back money one has borrowed is a simple matter of morality, and (2) anyone in the habit of lending money is evil. It’s true that opinions on this latter point do shift back and forth. One extreme possibility might be the situation the French anthropologist Jean-Claude Galey encountered in a region of the eastern Himalayas, where as recently as the 1970s, the low-ranking castes—they were referred to as “the vanquished ones,” since they were thought to be descended from a population once conquered by the current landlord caste, many centuries before—lived in a situation of permanent debt dependency. Landless and penniless, they were obliged to solicit loans from the landlords simply to find a way to eat—not for the money, since the sums were paltry, but because poor debtors were expected to pay back the interest in the form of work, which meant they were at least provided with food and shelter while they cleaned out their creditors’ outhouses and reroofed their sheds. For the “vanquished”—as for most people in the world, actually—the most significant life expenses were weddings and funerals. These required a good deal of money, which always had to be borrowed. In such cases it was common practice, Galey explains, for high-caste moneylenders to demand one of the borrower’s daughters as security. Often, when a poor man had to borrow money for his daughter’s marriage, the security would be the bride herself. She would be expected to report to the lender’s household after her wedding night, spend a few months there as his concubine, and then, once he grew bored, be sent off to some nearby timber camp, where she would have to spend the next year or two as a prostitute working off her father’s debt. Once it was paid off, she’d return to her husband and begin her married life.

This seems shocking, outrageous even, but Galey does not report any widespread feeling of injustice. Everyone seemed to feel that this was just the way things worked. Neither was there much concern voiced among the local Brahmins, who were the ultimate arbiters in matters of morality—though this is hardly surprising, since the most prominent moneylenders were often Brahmins themselves.

Even here, of course, it’s hard to know what people were saying behind closed doors. If a group of Maoist rebels were to suddenly seize control of the area (some do operate in this part of rural India) and round up the local usurers for trial, we might hear all sorts of views expressed.

Still, what Galey describes represents, as I say, one extreme of possibility: one in which the usurers themselves are the ultimate moral authorities. Compare this with, say, medieval France, where the moral status of moneylenders was seriously in question. The Catholic Church had always forbidden the practice of lending money at interest, but the rules often fell into desuetude, causing the Church hierarchy to authorize preaching campaigns, sending mendicant friars to travel from town to town warning usurers that unless they repented and made full restitution of all interest extracted from their victims, they would surely go to Hell.

These sermons, many of which have survived, are full of horror stories of God’s judgment on unrepentant lenders: stories of rich men struck down by madness or terrible diseases, haunted by deathbed nightmares of the snakes or demons who would soon rend or eat their flesh. In the twelfth century, when such campaigns reached their heights, more direct sanctions began to be employed. The papacy issued instructions to local parishes that all known usurers were to be excommunicated; they were not to be allowed to receive the sacraments, and under no conditions could their bodies be buried on hallowed ground."

An example of moral confusion in medieval Japanese buddhism:

"The moment that usurers were thought to go too far, exactly the same sort of stories as found in Europe would start appearing. A Medieval Japanese author recounts one—he insists it’s a true story—about the terrifying fate of Hiromushime, the wife of a wealthy district governor around 776 ad. An exceptionally greedy woman, she would add water to the rice wine she sold and make a huge profit on such diluted saké. On the day she loaned something to someone she would use a small measuring cup, but on the day of collection she used a large one. When lending rice her scale registered small portions, but when she received payment it was in large amounts. The interest that she forcibly collected was tremendous—often as much as ten or even one hundred times the amount of the original loan. She was rigid about collecting debts, showing no mercy whatsoever. Because of this, many people were thrown into a state of anxiety; they abandoned their households to get away from her and took to wandering in other provinces.

After she died, for seven days, monks prayed over her sealed coffin. On the seventh, her body mysteriously sprang to life:

Those who came to look at her encountered an indescribable stench. From the waist up she had already become an ox with four-inch horns protruding from her forehead. Her two hands had become the hooves of an ox, her nails were now cracked so that they resembled an ox hoof’s instep. From the waist down, however, her body was that of a human. She disliked rice and preferred to eat grass. Her manner of eating was rumination. Naked, she would lie in her own excrement.

Gawkers descended. Guilty and ashamed, the family made desperate attempts to buy forgiveness, canceling all debts owed to them by anybody, donating much of their wealth to religious establishments. Finally, mercifully, the monster died.

The author, himself a monk, felt that the story represented a clear case of premature reincarnation—the woman was being punished by the law of karma for her violations of “what is both reasonable and right.” His problem was that Buddhist scriptures, insofar as they explicitly weighed in on the matter, didn’t provide a precedent. Normally, it was debtors who were supposed to be reborn as oxen, not creditors. As a result, when it came time to explain the moral of the story, his exposition grew decidedly confusing:

It is as one sutra says: “When we do not repay the things that we have borrowed, our payment becomes that of being reborn as a horse or ox.” “The debtor is like a slave, the creditor is like a master.” Or again: “a debtor is a pheasant and his creditor a hawk.” If you are in a situation of having granted a loan, do not put unreasonable pressure on your debtor for repayment. If you do, you will be reborn as a horse or an ox and be put to work for him who was in debt to you, and then you will repay many times over.10 So which will it be? They can’t both end up as animals in each other’s barns.

All the great religious traditions seem to bang up against this quandary in one form or another. On the one hand, insofar as all human relations involve debt, they are all morally compromised. Both parties are probably already guilty of something just by entering into the relationship; at the very least they run a significant danger of becoming guilty if repayment is delayed. On the other hand, when we say someone acts like they “don’t owe anything to anybody,” we’re hardly describing the person as a paragon of virtue. In the secular world, morality consists largely of fulfilling our obligations to others, and we have a stubborn tendency to imagine those obligations as debts. Monks, perhaps, can avoid the dilemma by detaching themselves from the secular world entirely, but the rest of us appear condemned to live in a universe that doesn’t make a lot of sense."

The Imaginary Myth of Barter

David Graeber:

"In fact, our standard account of monetary history is precisely backwards. We did not begin with barter, discover money, and then eventually develop credit systems. It happened precisely the other way around. What we now call virtual money came first. Coins came much later, and their use spread only unevenly, never completely replacing credit systems. Barter, in turn, appears to be largely a kind of accidental byproduct of the use of coinage or paper money: historically, it has mainly been what people who are used to cash transactions do when for one reason or another they have no access to currency.


"The story ... is everywhere. It is the founding myth of our system of economic relations. It is so deeply established in common sense, even in places like Madagascar, that most people on earth couldn’t imagine any other way that money possibly could have come about.

The problem is there’s no evidence that it ever happened, and an enormous amount of evidence suggesting that it did not.

For centuries now, explorers have been trying to find this fabled land of barter—none with success. Adam Smith set his story in aboriginal North America (others preferred Africa or the Pacific). In Smith’s time, at least it could be said that reliable information on Native American economic systems was unavailable in Scottish libraries. But by mid-century, Lewis Henry Morgan’s descriptions of the Six Nations of the Iroquois, among others, were widely published—and they made clear that the main economic institution among the Iroquois nations were longhouses where most goods were stockpiled and then allocated by women’s councils, and no one ever traded arrowheads for slabs of meat. Economists simply ignored this information.15 Stanley Jevons, for example, who in 1871 wrote what has come to be considered the classic book on the origins of money, took his examples straight from Smith, with Indians swapping venison for elk and beaver hides, and made no use of actual descriptions of Indian life that made it clear that Smith had simply made this up. Around that same time, missionaries, adventurers, and colonial administrators were fanning out across the world, many bringing copies of Smith’s book with them, expecting to find the land of barter. None ever did. They discovered an almost endless variety of economic systems. But to this day, no one has been able to locate a part of the world where the ordinary mode of economic transaction between neighbors takes the form of “I’ll give you twenty chickens for that cow.”

The definitive anthropological work on barter, by Caroline Humphrey, of Cambridge, could not be more definitive in its conclusions: “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing.”

Now, all this hardly means that barter does not exist—or even that it’s never practiced by the sort of people that Smith would refer to as “savages.” It just means that it’s almost never employed, as Smith imagined, between fellow villagers. Ordinarily, it takes place between strangers, even enemies. Let us begin with the Nambikwara of Brazil. They would seem to fit all the criteria: they are a simple society without much in the way of division of labor, organized into small bands that traditionally numbered at best a hundred people each. Occasionally if one band spots the cooking fires of another in their vicinity, they will send emissaries to negotiate a meeting for purposes of trade. If the offer is accepted, they will first hide their women and children in the forest, then invite the men of other band to visit camp. Each band has a chief; once everyone has been assembled, each chief gives a formal speech praising the other party and belittling his own; everyone puts aside their weapons to sing and dance together—though the dance is one that mimics military confrontation. Then, individuals from each side approach each other to trade:

If an individual wants an object he extols it by saying how fine it is. If a man values an object and wants much in exchange for it, instead of saying that it is very valuable he says that it is no good, thus showing his desire to keep it. “This axe is no good, it is very old, it is very dull,” he will say, referring to his axe which the other wants. This argument is carried on in an angry tone of voice until a settlement is reached. When agreement has been reached each snatches the object out of the other’s hand. If a man has bartered a necklace, instead of taking it off and handing it over, the other person must take it off with a show of force. Disputes, often leading to fights, occur when one party is a little premature and snatches the object before the other has finished arguing.

The whole business concludes with a great feast at which the women reappear, but this too can lead to problems, since amidst the music and good cheer, there is ample opportunity for seductions. This sometimes led to jealous quarrels. Occasionally, people would get killed.

Barter, then, for all the festive elements, was carried out between people who might otherwise be enemies and hovered about an inch away from outright warfare—and, if the ethnographer is to be believed—if one side later decided they had been taken advantage of, it could very easily lead to actual wars.


What all such cases of trade through barter have in common is that they are meetings with strangers who will, likely as not, never meet again, and with whom one certainly will not enter into any ongoing relations. This is why a direct one-on-one exchange is appropriate: each side makes their trade and walks away. It’s all made possible by laying down an initial mantle of sociability, in the form of shared pleasures, music and dance—the usual base of conviviality on which trade must always be built. Then comes the actual trading, where both sides make a great display of the latent hostility that necessarily exists in any exchange of material goods between strangers—where neither party has no particular reason not to take advantage of the other—by playful mock aggression, though in the Nambikwara case, where the mantle of sociability is extremely thin, mock aggression is in constant danger of slipping over into the real thing. The Gunwinggu, with their more relaxed attitude toward sexuality, have quite ingeniously managed to make the shared pleasures and aggression into exactly the same thing.

Recall here the language of the economics textbooks: “Imagine a society without money.” “Imagine a barter economy.” One thing these examples make abundantly clear is just how limited the imaginative powers of most economists turn out to be.

Why? The simplest answer would be: for there to even be a discipline called “economics,” a discipline that concerns itself first and foremost with how individuals seek the most advantageous arrangement for the exchange of shoes for potatoes, or cloth for spears, it must assume that the exchange of such goods need have nothing to do with war, passion, adventure, mystery, sex, or death. Economics assumes a division between different spheres of human behavior that, among people like the Gunwinngu and the Nambikwara, simply does not exist. These divisions in turn are made possible by very specific institutional arrangements: the existence of lawyers, prisons, and police, to ensure that even people who don’t like each other very much, who have no interest in developing any kind of ongoing relationship, but are simply interested in getting their hands on as much of the others’ possessions as possible, will nonetheless refrain from the most obvious expedient (theft). This in turn allows us to assume that life is neatly divided between the marketplace, where we do our shopping, and the “sphere of consumption,” where we concern ourselves with music, feasts, and seduction. In other words, the vision of the world that forms the basis of the economics textbooks, which Adam Smith played so large a part in promulgating, has by now become so much a part of our common sense that we find it hard to imagine any other possible arrangement.

From these examples, it begins to be clear why there are no societies based on barter. Such a society could only be one in which everybody was an inch away from everybody else’s throat; but nonetheless hovering there, poised to strike but never actually striking, forever. True, barter does sometimes occur between people who do not consider each other strangers, but they’re usually people who might as well be strangers—that is, who feel no sense of mutual responsibility or trust, or the desire to develop ongoing relations. The Pukhtun of Northern Pakistan, for instance, are famous for their open-handed hospitality. Barter is what you do with those to whom you are not bound by ties of hospitality (or kinship, or much of anything else).


In fact, there is good reason to believe that barter is not a particularly ancient phenomenon at all, but has only really become widespread in modern times. Certainly in most of the cases we know about, it takes place between people who are familiar with the use of money, but for one reason or another, don’t have a lot of it around. Elaborate barter systems often crop up in the wake of the collapse of national economies: most recently in Russia in the ’90s, and in Argentina around 2002, when rubles in the first case, and dollars in the second, effectively disappeared.26 Occasionally one can even find some kind of currency beginning to develop: for instance, in POW camps and many prisons, inmates have indeed been known to use cigarettes as a kind of currency, much to the delight and excitement of professional economists. But here too we are talking about people who grew up using money and now have to make do without it—exactly the situation “imagined” by the economics textbooks with which I began.

The more frequent solution is to adopt some sort of credit system. When much of Europe “reverted to barter” after the collapse of the Roman Empire, and then again after the Carolingian Empire likewise fell apart, this seems to be what happened. People continued keeping accounts in the old imperial currency, even if they were no longer using coins.28 Similarly, the Pukhtun men who like to swap bicycles for donkeys are hardly unfamiliar with the use of money. Money has existed in that part of the world for thousands of years. They just prefer direct exchange between equals—in this case, because they consider it more manly.

The most remarkable thing is that even in Adam Smith’s examples of fish and nails and tobacco being used as money, the same sort of thing was happening.


Anthropologists have been complaining about the Myth of Barter for almost a century. Occasionally, economists point out with slight exasperation that there’s a fairly simple reason why they’re still telling the same story despite all the evidence against it: anthropologists have never come up with a better one.20 This is an understandable objection, but there’s a simple answer to it. The reasons why anthropologists haven’t been able to come up with a simple, compelling story for the origins of money is because there’s no reason to believe there could be one. Money was no more ever “invented” than music or mathematics or jewelry. What we call “money” isn’t a “thing” at all, it’s a way of comparing things mathematically, as proportions: of saying one of X is equivalent to six of Y. As such it is probably as old as human thought. The moment we try to get any more specific, we discover that there are any number of different habits and practices that have converged in the stuff we now call “money,” and this is precisely the reason why economists, historians, and the rest have found it so difficult to come up with a single definition."

States creates markets and money, not the other way around

David Graeber:

"Say a king wishes to support a standing army of fifty thousand men. Under ancient or medieval conditions, feeding such a force was an enormous problem—unless they were on the march, one would need to employ almost as many men and animals just to locate, acquire, and transport the necessary provisions.17 On the other hand, if one simply hands out coins to the soldiers and then demands that every family in the kingdom was obliged to pay one of those coins back to you, one would, in one blow, turn one’s entire national economy into a vast machine for the provisioning of soldiers, since now every family, in order to get their hands on the coins, must find some way to contribute to the general effort to provide soldiers with things they want. Markets are brought into existence as a side effect.

This is a bit of a cartoon version, but it is very clear that markets did spring up around ancient armies; one need only take a glance at Kautilya’s Arthasasatra, the Sassanian “circle of sovereignty,” or the Chinese “Discourses on Salt and Iron” to discover that most ancient rulers spent a great deal of their time thinking about the relation between mines, soldiers, taxes, and food. Most concluded that the creation of markets of this sort was not just convenient for feeding soldiers, but useful in all sorts of ways, since it meant officials no longer had to requisition everything they needed directly from the populace, or figure out a way to produce it on royal estates or royal workshops. In other words, despite the dogged liberal assumption—again, coming from Smith’s legacy—that the existence of states and markets are somehow opposed, the historical record implies that exactly the opposite is the case. Stateless societies tend also to be without markets.

As one might imagine, state theories of money have always been anathema to mainstream economists working in the tradition of Adam Smith. In fact, Chartalism has tended to be seen as a populist underside of economic theory, favored mainly by cranks.18 The curious thing is that the mainstream economists often ended up actually working for governments and advising such governments to pursue policies much like those the Chartalists described—that is, tax policies designed to create markets where they had not existed before—despite the fact that they were in theory committed to Smith’s argument that markets develop spontaneously of their own accord."

Human Existence is a form of debt

David Graeber on Primordial Debt Theory, i.e. the religious origins of debt:

"The core argument is that any attempt to separate monetary policy from social policy is ultimately wrong. Primordial-debt theorists insist that these have always been the same thing. Governments use taxes to create money, and they are able to do so because they have become the guardians of the debt that all citizens have to one another. This debt is the essence of society itself. It exists long before money and markets, and money and markets themselves are simply ways of chopping pieces of it up.

At first, the argument goes, this sense of debt was expressed not through the state, but through religion. To make the argument, Aglietta and Orléans fixed on certain works of early Sanskrit religious literature: the hymns, prayers, and poetry collected in the Vedas and the Brahmanas, priestly commentaries composed over the centuries that followed, texts that are now considered the foundations of Hindu thought. It’s not as odd a choice as it might seem. These texts constitute the earliest known historical reflections on the nature of debt.

Actually, even the very earliest Vedic poems, composed sometime between 1500 and 1200 bc, evince a constant concern with debt—which is treated as synonymous with guilt and sin.

There are numerous prayers pleading with the gods to liberate the worshipper from the shackles or bonds of debt. Sometimes these seem to refer to debt in the literal sense—Rig Veda 10.34, for instance, has a long description of the sad plight of gamblers who “wander homeless, in constant fear, in debt, and seeking money.” Elsewhere it’s clearly metaphorical. In these hymns, Yama, the god of death, figures prominently. To be in debt was to have a weight placed on you by Death. To be under any sort of unfulfilled obligation, any unkept promise, to gods or to men, was to live in the shadow of Death. Often, even in the very early texts, debt seems to stand in for a broader sense of inner suffering, from which one begs the gods—particularly Agni, who represents the sacrificial fire—for release. It was only with the Brahmanas that commentators started trying to weave all this together into a more comprehensive philosophy. The conclusion: that human existence is itself a form of debt.

Sacrifice (and these early commentators were themselves sacrificial priests) is thus called “tribute paid to Death.” Or such was the manner of speaking. In reality, as the priests knew better than anyone, sacrifice was directed to all the gods, not just Death—Death was just the intermediary. Framing things this way, though, did immediately raise the one problem that always comes up, whenever anyone conceives human life through such an idiom. If our lives are on loan, who would actually wish to repay such a debt? To live in debt is to be guilty, incomplete. But completion can only mean annihilation. In this way, the “tribute” of sacrifice could be seen as a kind of interest payment, with the life of the animal substituting temporarily for what’s really owed, which is ourselves—a mere postponement of the inevitable.

Different commentators proposed different ways out of the dilemma. Some ambitious Brahmins began telling their clients that sacrificial ritual, if done correctly, promised a way to break out of the human condition entirely and achieve eternity (since, in the face of eternity, all debts become meaningless.)35 Another way was to broaden the notion of debt, so that all social responsibilities become debts of one sort or another. Thus two famous passages in the Brahmanas insist that we are born as a debt not just to the gods, to be repaid in sacrifice, but also to the Sages who created the Vedic learning to begin with, which we must repay through study; to our ancestors (“the Fathers”), who we must repay by having children; and finally, “to men”—apparently meaning humanity as a whole, to be repaid by offering hospitality to strangers.36 Anyone, then, who lives a proper life is constantly paying back existential debts of one sort or another; but at the same time, as the notion of debt slides back into a simple sense of social obligation, it becomes something far less terrifying than the sense that one’s very existence is a loan taken against Death. Not least because social obligations always cut both ways. Especially since, once one has oneself fathered children, one is just as much a debtor as a creditor.

What primordial-debt theorists have done is to propose that the ideas encoded in these Vedic texts are not peculiar to a certain intellectual tradition of early Iron Age ritual specialists in the Ganges valley, but that they are essential to the very nature and history of human thought.


"How do we go from that absolute debt we owe to God to the very specific debts we owe our cousins, or the bartender?

The answer provided by primordial-debt theorists is, again, ingenious. If taxes represent our absolute debt to the society that created us, then the first step toward creating real money comes when we start calculating much more specific debts to society, systems of fines, fees, and penalties, or even debts we owe to specific individuals who we have wronged in some way, and thus to whom we stand in a relation of “sin” or “guilt.”

This is actually much less implausible than it might sound. One of the puzzling things about all the theories about the origins of money that we’ve been looking at so far is that they almost completely ignore the evidence of anthropology. Anthropologists do have a great deal of knowledge of how economies within stateless societies actually worked—how they still work in places where states and markets have been unable to completely break up existing ways of doing things. There are innumerable studies of, say, the use of cattle as money in eastern or southern Africa, of shell money in the Americas (wampum being the most famous example) or Papua New Guinea, bead money, feather money, the use of iron rings, cowries, spondylus shells, brass rods, or woodpecker scalps.42 The reason that this literature tends to be ignored by economists is simple: “primitive currencies” of this sort is only rarely used to buy and sell things, and even when they are, never primarily everyday items such as chickens or eggs or shoes or potatoes. Rather than being employed to acquire things, they are mainly used to rearrange relations between people. Above all, to arrange marriages and to settle disputes, particularly those arising from murders or personal injury.

There is every reason to believe that our own money started the same way—even the English word “to pay” is originally derived from a word for “to pacify, appease”—as in, to give someone something precious, for instance, to express just how badly you feel about having just killed someone’s brother in a drunken brawl, and how much you would really like to avoid this becoming the basis for an ongoing blood-feud.

Debt theorists are especially concerned with this latter possibility."

Credit vs gold in the cycles of history

Ch 8,, p. 213:

"If we look at Eurasian history over the course of the last five thou­sand years, what we see is a broad alternation between periods domi­nated by credit money and periods in which gold and silver come to dominate - that is, those during which at least a large share of transac­tions were conducted with pieces of valuable metal being passed from hand to hand. Why? The single most important factor would appear to be war. Bullion predominates, above all, in periods of generalized violence. There's a very simple reason for that. Gold and silver coins are distin­guished from credit arrangements by one spectacular feature: they can be stolen. A debt is, by definition, a record, as well as a relation of trust. Someone accepting gold or silver in exchange for merchandise, on the other hand, need trust nothing more than the accuracy of the scales, the quality of the metal, and the likelihood that someone else will be willing to accept it. In a world where war and the threat of violence are everywhere-and this appears to have been an equally ac­ curate description of Warring States China, Iron Age Greece, and pre­-Mauryan India - there are obvious advantages to making one's trans­ actions simple. This is all the more true when dealing with soldiers."

Towards a P2P Conception of Transforming our Debts

David Graeber:

"What does it mean to imagine our responsibilities as debts? To whom do we owe our existence?

It’s significant that their answer did not make any mention either of “society” or states (though certainly kings and governments certainly existed in early India). Instead, they fixed on debts to gods, to sages, to fathers, and to “men.” It wouldn’t be at all difficult to translate their formulation into more contemporary language. We could put it this way.

We owe our existence above all:

  • To the universe, cosmic forces, as we would put it now, to Nature. The ground of our existence. To be repaid through ritual: ritual being an act of respect and recognition to all that beside which we are small.
  • To those who have created the knowledge and cultural accomplishments that we value most; that give our existence its form, its meaning, but also its shape. Here we would include not only the philosophers and scientists who created our intellectual tradition but everyone from William Shakespeare to that long-since-forgotten woman, somewhere in the Middle East, who created leavened bread. We repay them by becoming learned ourselves and contributing to human knowledge and human culture.
  • To our parents, and their parents—our ancestors. We repay them by becoming ancestors.
  • To humanity as a whole. We repay them by generosity to strangers, by maintaining that basic communistic ground of sociality that makes human relations, and hence life, possible.

Set out this way, though, the argument begins to undermine its very premise. These are nothing like commercial debts. After all, one might repay one’s parents by having children, but one is not generally thought to have repaid one’s creditors if one lends the cash to someone else.

Myself, I wonder: Couldn’t that really be the point? Perhaps what the authors of the Brahmanas were really demonstrating was that, in the final analysis, our relation with the cosmos is ultimately nothing like a commercial transaction, nor could it be. That is because commercial transactions imply both equality and separation. These examples are all about overcoming separation: you are free from your debt to your ancestors when you become an ancestor; you are free from your debt to the sages when you become a sage, you are free from your debt to humanity when you act with humanity. All the more so if one is speaking of the universe. If you cannot bargain with the gods because they already have everything, then you certainly cannot bargain with the universe, because the universe is everything—and that everything necessarily includes yourself. One could in fact interpret this list as a subtle way of saying that the only way of “freeing oneself” from the debt was not literally repaying debts, but rather showing that these debts do not exist because one is not in fact separate to begin with, and hence that the very notion of canceling the debt, and achieving a separate, autonomous existence, was ridiculous from the start. Or even that the very presumption of positing oneself as separate from humanity or the cosmos, so much so that one can enter into one-to-one dealings with it, is itself the crime that can be answered only by death. Our guilt is not due to the fact that we cannot repay our debt to the universe. Our guilt is our presumption in thinking of ourselves as being in any sense an equivalent to Everything Else that Exists or Has Ever Existed, so as to be able to conceive of such a debt in the first place.

Or let us look at the other side of the equation. Even if it is possible to imagine ourselves as standing in a position of absolute debt to the cosmos, or to humanity, the next question becomes: Who exactly has a right to speak for the cosmos, or humanity, to tell us how that debt must be repaid? If there’s anything more preposterous than claiming to stand apart from the entire universe so as to enter into negotiations with it, it is claiming to speak for the other side.

If one were looking for the ethos for an individualistic society such as our own, one way to do it might well be to say: we all owe an infinite debt to humanity, society, nature, or the cosmos (however one prefers to frame it), but no one else could possibly tell us how we are to pay it. This at least would be intellectually consistent. If so, it would actually be possible to see almost all systems of established authority—religion, morality, politics, economics, and the criminal-justice system—as so many different fraudulent ways to presume to calculate what cannot be calculated, to claim the authority to tell us how some aspect of that unlimited debt ought to be repaid. Human freedom would then be our ability to decide for ourselves how we want to do so.

No one, to my knowledge, has ever taken this approach. Instead, theories of existential debt always end up becoming ways of justifying—or laying claim to—structures of authority.


Once we owed our lives to the gods that created us, paid interest in the form of animal sacrifice, and ultimately paid back the principal with our lives. Now we owe it to the Nation that formed us, pay interest in the form of taxes, and when it comes time to defend the nation against its enemies, to offer to pay it with our lives. This is a great trap of the twentieth century: on one side is the logic of the market, where we like to imagine we all start out as individuals who don’t owe each other anything. On the other is the logic of the state, where we all begin with a debt we can never truly pay. We are constantly told that they are opposites, and that between them they contain the only real human possibilities. But it’s a false dichotomy. States created markets. Markets require states. Neither could continue without the other, at least, in anything like the forms we would recognize today."


See also Keith Hart's review: The Anthropology of Unequal Society

Critique by Charles Eisenstein

Charles Eisenstein:

"Noticeably absent from Debt is much discussion of solutions. Rather, he says, he hopes to “throw open perspectives, enlarge our sense of possibilities; to begin to ask what it would mean to start thinking on a breadth and with a grandeur appropriate to the times.” Nonetheless, I would have loved to see Graeber apply the historical lens of his book toward various topics in alternative economics: peer-to-peer finance, mutual credit currencies, time banking, Georgist economics, negative-interest currency, and so forth. He doubts that capitalism as we know it will last another generation, but rather than just await its demise, what vision of a more beautiful world shall we work to create? Despite his well-known political radicalism, and the radical insights of his book, Graeber abides by fairly conservative conventions of scholarly decorum. He avoids sweeping generalizations and programmatic statements. While his cross-cultural comparisons of Chinese, Indian, and Occidental economic history certainly lend themselves to metahistorical conclusions, he seems wary of taking his argument to its final step. This circumspection might make the book palatable to a broader spectrum of readers, but it is frustrating to activists who want to do something with it.

Some of the policy implications of Debt are obvious. For the last seventy or eighty years, economic policy has always been predicated on the moral and practical necessity of enforcing the repayment of debts. By showing that there is no such necessity, Graeber opens a wider door to existing proposals for Third World debt amnesty, usury laws, debt forgiveness, principle reduction on underwater mortgages, and so forth.

Less obviously, many radical proposals from the fringes of economics could draw powerful support from Graeber's research. For example, Graeber describes how ancient rulers declared debt jubilees to right the social wrongs – concentration of wealth and loss of liberty – that arose through interest-based lending. A modern-day equivalent might be a negative-interest (demurrage-charged) currency, implemented perhaps as a liquidity tax on bank reserves, which is essentially a slow-motion jubilee. Another important idea in alternative economics is mutual-credit currencies – which bear a striking resemblance to the tally system used in Medieval villages. Graeber laments the incursion of market economics onto social relationships – and there are movements today, such as slow living and reskilling, that seek to reclaim various realms of life from the market economy. Even his call to overthrow the cult of “industriousness” and (by implication) recover a playful, pleasure-positive way of life has an economic analog in the idea of a social wage. If Graeber had made these alternative-economics connections explicit in his book, he might have empowered solutions that reach to the root of our systemic maladies.

I found myself wishing that he would apply the wisdom and intelligence that infuses his scholarship a little beyond it. What political prescriptions might he offer? What personal prescriptions for living in a world still so subject to insidious logic of slavery, violence, usury, and debt? How might we become active change agents on a personal or political level? Graeber seems reluctant to offer much speculation on what the future might bring, saying that the forty years that have elapsed since the resurgence of a credit-based system are nearly insignificant in comparison to the historical span he addresses.

A related shortcoming (I hesitate to use such a word for so breathtaking a work of scholarship) of the book is its hesitance to articulate any general principle of human nature. While he ably debunks the assumption that human economic behavior is motivated primarily by self-interest, he doesn't offer an alternative that might be the foundation of an economic philosophy. Perhaps he would say, “Human beings are complicated,” or, “Human nature is largely an artifact of culture.” True, perhaps, but having surveyed five millennia of economic behavior across so many cultures, mightn't Graeber attempt to discern some unifying, general feature of human economic psychology?" (

Money and Slavery

Matt Cropp:

"Initially, he notes, most human societies recognize that their constituent individuals cannot be truly bought or sold, and, as such, things such as dowries and bride wealth were paid in a special kind of currency (which he refers to as "social currency") which was generally not negotiable for commodities such as food, simple crafts, etc. Instead, such social currency had the function of rearranging the social relationships of people in the community, but, no matter the form of that rearrangement, each party had responsibilities towards the other.

This begins to shift in societies with the introduction of chattel slavery. In a traditional hierarchical society, even being at the bottom of the totem pole still meant that you existed in a web of mutual obligations with others in the community. However, an individual who has been entirely torn from their social context and purchased by an individual in a community in which they have no connections is an entirely different story. That slave can be treated in almost any manner without social repercussions, and can thus be used (and thought of) in an entirely instrumental way. This, according to Graeber, leads to a whole cascade of consequences that fundamentally changes the way people view the world in general: if humans are negotiable and alienable, so is everything else. The brutal effects of this transformation are illustrated with vivid historical examples from societies as disparate as West Africa and Thailand, and provides the foundation for a fascinating perspective that sees the social, religious, philosophical, and economic characteristics of a variety of historical periods as being heavily influenced by each era's conceptions about the nature of money and debt." (

Debt Obligations and Hierarchy

Matt Cropp:

"most interesting element, from a credit unionist perspective, is his discussion of the fundamental nature of debt. As he makes very clear, debt is such an essential element of our culture that we rarely stop to really consider its particulars. As such, he sets out to do just that, stating that, at its core, "Debt is a very specific thing ... It first requires a relationship between two people who do not consider each other fundamentally different sorts of being, who are at least potential equals, who are equals in those ways that are really important, and who are currently not in a state of equality--but for whom there is some way to set matters straight." (120)

A debt between two individuals thus creates a temporary hierarchical relationship between them, and in societies in which the alienation of relationships pioneered by slavery has been internalized, such debts can then be transfered to, or even originated by, a creditor with no interest at all in the wellbeing of the debtor as long as the debt continues to be serviced. As a result, debts in such societies can make the status of debtor virtually a form of slavery as they are pushed to do things that would have been unthinkable had the need to pay off their debts not been hanging over their heads.

A fascinating example of debt-obligations leading to incredible brutality can be historically located in the example of the conquest of Mexico. The leader of the small Spanish expeditionary force, Cortes, was deeply in debt, and saw the expedition as his chance to finally extricate himself from that situation. The incredible brutality of that campaign and of the genocidal working conditions later implemented by his lieutenants in the mines they administered has been traditionally been chalked up to the barbaric greed of thuggish conquistadors. However, Graeber argues that, as debtors, those men actually did not feel that they had much choice in the matter of how they behaved. In order to fend off their creditors, they had to extract as much wealth as quickly as they could in order to avoid being shipped off to Spain in chains, and their creditors, being distant and disconnected, cared little about what they were doing as long as the interest payments kept rolling in.

In light of this understanding of debt, the credit union project takes on new meaning. In contrast to the alienated quasi-slavery that resulted from being deeply indebted to a usurious loan shark, the credit union offered a different way of being. Instead of debt creating an hierarchical power relationship between the debtor and the lender, receiving a loan from an institution in which the debtor had an ownership stake allowed, in many cases, for being in debt to not have the effect of breaking the debtor's equal standing with the other members of his or her community. In addition, the "esprit de corps" that Roy Bergengren saw as a characteristic of many small credit unions functioned to limit the disconnect between the debt and the personal situation of the debtor. Old minutes of credit committee meetings are replete with instances of a loan being adjusted, or even written off, due to circumstances of legitimate hardship. As such, an appreciation of Graeber's perspective on the intersection of debt and power serves to provide a deeper understanding of the nature of the liberation that credit unions offered many people of modest means in the 20th century. The credit union was not simply a way to get better returns on one's savings or cheaper credit; it also offered a way for people who had been deeply socially degraded by debt to recover their dignity." (


Really interesting contributions can be found at: the Seminar on David Graeber’s Debt, at Crooked Timber.

Charles Eisenstein on moving from Primordial Debt Theory to Primordial Gratitude

Charles Eisenstein:

"Throughout the book, amid lengthy discussion of debt, obligation, honor, credit, and money, there is strikingly little mention of gratitude. He offers a sophisticated appraisal of the “primordial debt” theory of economic philosophy (and of theology); what about a theory of primordial gratitude? Instead of being born into debt (to society, the ancestors, God, the cosmos), perhaps we are born into gratitude: the knowledge of how much we have received, and the desire to give in turn. As I illustrate in Sacred Economics, the assumption of primordial gratitude generates a very different economics: one that need not be coercive in nature, but understands people's natural desire to create and contribute; one that internalizes costs rather than exporting them onto other people and future generations; one that, like gift economies of yore, discourages accumulation and makes wealth and status a function of giving.

Immersed in a system that enslaves us to debt and forces us into competition merely to survive, we are unused to expressing our innate desire to give. But when normal breaks down, that desire bursts forth. Many people in the Occupy movement (in which Graeber was deeply involved) have told me that the most amazing thing about it was how people stepped forward, without being paid to or ordered to, to meet whatever needs called to them. A gift economy – even a gift politics – quickly emerged. Even if it devolved into infighting and paralysis, we caught a glimpse of something real. “I saw how human beings are supposed to live,” one Occupier told me. I have seen the same happen after natural disasters disrupt the flow of normalcy: neighbors who ordinarily have no occasion to speak to one another emerge from their houses and everyone helps each other out. The desire to give, to contribute to the general welfare, lies latent in all of us. Could we build an economic system consciously designed to encourage this impulse? Because, as Graeber illustrates in so many vivid examples, the debt-pressure inherent in an interest-based system inhibits it." (

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