Saturday, October 13, 2012

Wobbly times number 155

DEBT, The First Five Thousand Years 
by David Graeber
Pages544; ISBN9781933633862; 
Publication date July, 2011

Even by the time one is halfway through chapter 3 of DEBT, THE FIRST 5,000 YEARS, Graeber has yet to put his finger on who produces 'value', a term he throws around quite regularly. Yes, he does tell his readers who sees 'value'--humans, obviously.  People see value, they see the use-value of the commodities they trade.  A commodity can have all the labour time in the world in it and if it isn't perceived as having a human use, it will have zero exchange-value. Stick a pin there.

Graeber does tell some very important tales in DEBT, pinning the need and therefore usefulness of money on ruling class desires for more wealth than they needed just to live.  In other words, in order to be rulers e.g. to pay for armed bodies of men, through the governing/enforcement structure of the political State. As a means of transferring produced wealth of the peasantry to rulers' ownership, tax systems are decreed by ruling classes which require payment in 'sovereigns'/money. Even so, the confusion accumulates when he poo-poos money itself as being a commodity.   

Graeber's DEBT is all about definitions. I think he's written a very readable book with many great tales of credit. In addition, he makes definitive statements like, "Money is credit, it can be brought into being by private contractual agreements...."  And so, we have a self-professed anarchist like Graeber who would like to see the end of the State and the formation of a classless society. According to Graeber, money is the creature of the State. So, without a State, there would be no money.  I think one can surmise this from Graeber's ideology.  

As Graeber reveals to his readers, the famous bourgeois economist, Lord Keynes, early on in his career made a study of Mesopotamian cuneiform texts which took years of research and resulted in his celebrated treatise on money. Like Keynes, Graeber basically dismisses labour as being the source of value when it comes to exchange.  He goes so far as identifying and trashing Adam Smith's 'labour theory of value' with a sentence early in his book. 

Why is this important for understanding the theme of the book, debt? 

Because Graeber embraces what amounts to a consumption theory of value, one which isn't tied to socially necessary labour time; but is more in tune with how price is determined i.e. by supply and demand for use-values. Mike Beggs has correctly observed in his review of DEBT, that Graeber's theory of money is related to 'chartalist' sources. In other words, it's kind of half right. Indeed, Graeber uses his anthropological wisdom to eviscerate the standard bourgeois economic notion that the clumsiness of barter brought about the need for money. 

As I said, his book is peppered with some great tales, such as the one about Keynes and his years long study of Sumerian texts concerning money, which in turn resulted in one of the good Lord's most celebrated works. But in this reviewer's opinion, it is important to know the source of the production of wealth which is represented by money. And in my opinion that source is to be found in the socially necessary labour time it takes to produce it, for that is the point where economy becomes political. Sure, the State creates money, today's States and yesteryear's States, just as Graeber says. But what does money represent? 


Sure. But what is debt, if not the promise to pay in wealth and where does wealth come from? 

For Marx there are only two sources of wealth, labour and nature. I was curious about Graeber. He's a self-described anarchist. As far as I know, he's still a member of the IWW. He's also touted as a leader of the 'occupy movement'. I wondered how he would solve the fetishism of the commodity in his work, as the commodity, IMO, is the building block of class society and class society is the foundation for the political State and yes, as Graeber says, the political State does mint what passes for the universal equivalent used to exchange commodities and pay off debts.  

Graeber's anthropological reflections are quite useful in bringing to the fore the notion that barter was rare as an historical phenomenon and money was absent in classless societies of hunter/gatherers. People basically used what they found/hunted. Trade between groups (my commodity for yours) was extremely limited. Those observations by Graeber made sense to me and so the book as a whole is not a total loss.  No, no, no.  Read the book.  In fact it's a bloody good anecdotal romp through 5,000 years of history.

For instance, in chapters 3 and 4 of Graeber's DEBT, THE FIRST 5,000 YEARS, we read of enlightening ties between debt, sin, guilt, owing society, owing parents, ancestors and ultimately the creation of money to repay debts to the sovereign. Of course deities can never be totally repaid and many times under absolutist rule, the sovereign becomes a demi-god or even god. All good here.

I especially enjoyed the way he uses Nietzsche's GENEALOGY OF MORALS, not as dogma, but as a way to illustrate mass religious conceptual ideologies and their cultural penetration into what passes in daily life for normative thinking.

Chapter 5 is divided into an examination of each of three themes of human interaction. He starts off with 'communism' and proceeds to define solidarity. The communism that communists know as common ownership of the means of production, production according to ability, distribution according to need is poo-pooed and shelved in good anarchist fashion. In an effort to sell us Graeber-communism (also based on the ability/need axis), he brings us out of the 'communism' of the great beyond (after the State withers away) to the daily praxis of solidarity between humans (up to a point) as being bits and pieces of actually existing 'communism' throughout the ages. According to Graeber, the social revolution is already happening, with co-operation between workers within corporations to get the job done (one not charging the other handing a screw driver to the bloke who needs one to complete the company's job); giving to relatives with no expectation of being paid back but, expecting reciprocal deeds when in need and so on. I can see his point and it's good to read someone who has something positive to say about how we live our lives in communistic behaviour patterns. Of course, he does drag out the ghost of the USSR to scare us away from 'Communism' and this works into his arguing against the conception of 'communism' as any real communist/socialist would define it.

No sign of labour being the source of all wealth not found in nature at this point in the book. DEBT remains a stimulating, if often frustrating, read. It made me want to call Davey up on the phone and share ales over conversations about how to change the world.

Onward to the next of the three themes of chapter 5, 'exchange'.

"Originally, human beings lived in a state of nature where all things were held in common; it was war that first divided up the world and the resultant 'law of nations,' the common usages of mankind that regulate such matters as conquest, slavery, treaties , and borders, that was first responsible for inequalities of property as well." David Graeber writes in DEBT, The First Five Thousand Years

No David. Private property precedes war. Nevermind--a bloody good read.  Also, the State doesn't come before private property; but after its establishment in the wake of humans' discovery of how to domesticate those plants and animals capable of being domesticated.  Geography has much to do with this, as Jared Diamond has pointed out in his GUNS, GERMS AND STEEL. The provision of a stable food supply, one not totally dependent on hunting and gathering what could be found in nature, was driven by our instincts for survival and freedom, IMO.  Agriculture and animal husbandry began to emerge thousands of years before records began to be written in Sumer.  But back to Graeber....

Debt is certainly very important in the establishment of class and patriarchal domination; but when will Professor Graeber recognise in writing DEBT the fact that wealth, to which debt is intimately related, is either a product of labour or exists before us in nature and then is merely possessed by threat of violence through the State's law enforcement hirelings? 

Maybe I'm supposed to give him a 'huss' and assume that what I'm missing is 'implied'. The problem with that is that while I may see it, others may not, as he dismisses 'the labour theory of value' earlier on in DEBT, with regard to Adam Smith, as I've already stated.  

Wealth is liberty — liberty to recreation — liberty to enjoy life — liberty to improve the mind. "Wealth is disposable time, and nothing more. " (From a pamphlet published anonymously in 1821, The Source and Remedy of the National Difficulties).  Debt certainly leads to slavery or at the very least to dependency structures woven into the social fabric via culture e.g. the 'milk debt' Graeber outlines with regard to the ongoing establishment of Hinduism in the historical time frame he labels, "The Axial Age".  But even 'milk debt' involves scads of labour time, in fact, our whole Hindu guided lives, if that's where we're at.  

Graeber provides his readers with many original source anecdotes concerning the question of slavery which go basically along these lines:  Once upon a time, the producers of wealth believed their monarchs deserved to live high on the hog while they lived lives of poverty. Once upon a time, slaves believed slavery was normal for those defeated in military conflict. All this is true.

I kept being frustrated about the questions he raised in my mind about the source of wealth. At the same time I was fascinated by his anecdotes concerning how various cultures dealt with certain kinds of debt. For example, cattle were used as currency for some transactions in pre-State Wales. Women were used in ancient Irish areas for certain forms of debt. Yet, halfway through chapter 6 and still no theory of where wealth comes from. 

Debt is expanded beyond economic transactions to include sin and other moral questions and while these are cogent observations, Graeber's emphasis on them turns our attention away from what is being asked of those who are indebted.  And what is that but their labour time and giving up their free time in some way shape or form up to and including becoming chattel slaves to those to whom they owed their debts.  Labour time is the source of exchange-value which is wrapped up in the social relations between those in debt and those to whom debts are owed.  And this is precisely what Graeber misses and or dismisses when it comes to his analysis of debt and his continual mystifications regarding money.  For Graeber, money is not based on embodied labour time but on the trust people have in the authorities.  Sure, there is trust; but as the old folk wisdom goes, "Where's the beef?"  Graeber's rulers seem to just decree what the value of money is as opposed to money being a universal equivalent used to trade objects with exchangeable labour time embodied in them.  

So, what is value? What is price? What is profit? Graeber continually mixes up exchange-value with a sense of debt which is based on being beholden to another person in some honourable way. I see the connection; but I find his anecdotes confusing the issue. Exchange-value is based on socially necessary labour time (snlt). Humans perceive their own labour time thusly, their own life expenditure in the exchange of commodities. This social perception is born of haggling around price until a sense of 'this is right' is established. But why is it, 'right'? It's the perception of life's labour time in the object or service which is based on the material reality of socially necessary labour time embodied therein. 

 I'm beginning to be forced to assume that many anarchists want to de-legitmate Marx so badly that they refuse to grasp or have a mental block when it comes to seeing the validity of his critque of political-economy. I saw it in Goldman. I've seen it in other anarchist thinkers e.g. Proudhon. And now, it appears in Graeber. I kept hoping as I read that I'd be wrong in my assumptions.  However, Graeber's analysis of debt is completely tied up in moralist ideology and fogged over with liberal consumptionist oriented economics which just begin to touch on the issue i.e his attachment to the Chartalists and Keynes.  Alas, even the great anarchist Proudhon had his peoples' banks and equality wages schemes for his new society.

In chapter 7 of DEBT,The First Five Thousand Years, we find a cogent analysis of honour's connection to owing interest and principal. By using the first Sumerian texts, Graeber takes us in his anecdotal 'way-back machine' to the last social revolution's event horizon at the beginning of history as we know it from Mesopotamian writing around 3000 BC, bringing his reader through to the end of the Bronze Age in 1200 or so BC. Transition from classless hunter/gatherers to farming and animal husbandry took many hundreds of years to complete. 

Priestly temple sustaining economies congregate in ancient cities, as Sumerian history unfolds. Surplus wealth is appropriated by theocratic cults thus, magnificent temple construction. Through his own interpretation of those first written texts of the Sumerians circa 3,000 B.C., Dr. Graeber opens the door on a time when women were still near political equals with men--as the social relations of power based on class ownership of wealth produced by others, began to take shape in its cradle, newborn civilisation. Patriarchy begins with debt, according to Graeber. A farmer took out a loan to make it till harvest or to get some tool needed for production. That farmer might put up his wife, daughters or sons as collateral. Usually, the debt is paid. However, when it is not paid, 'a pound of flesh' is extracted in terms of the 'collateral' having to do labour time under the lender's thumb. The more loans, the more chances of default to debt-pawn status for the wife and kids. The origins of chattel slavery can be found here. The owning of one person by another becomes normalised in the thousand year historical transition out of the Bronze Age, to the point where even slaves and former slaves endorse the notion that honour is tied to debt. It's a cultural value/norm. And, if one reads closely, one can see the hand of private property rights over class divided wealth emerging: property rights over the product of the exploiteds' labour, along with what was becoming known as his possessions: women and children, in a word, patriarchy. Graeber doesn't put it that way, but it's a valid interpretation of his anecdotal histories, anthropologies, economics, literary interpretations and anarchism as far as I am concerned.

Graeber often declares that money is the creature of the State and is usually connected with the need to pay the first ancient political State's plundering soldiers.  Fair enough; but that doesn't explain what intrinsic value is embodied in money whether it is paper or gold.  Gold, of course, does contain socially necessary labour time/snlt (although Graeber never acknowledges this in his assertions about fiat money and credit) and paper money is the promise of value creating labour time.  But, Graeber brushes any labour theory of value creation aside early on in DEBT, The First Five Thousand Years.  Money, like value, can seemingly come out of the ether of ruler decrees.  David tells a thousand fine anecdotes but he doesn't explain what the substance of the universal equivalent is and how that substance leads those in positions of political power to be more or less the same people who own private property in the means of production and nature, who own slaves, who make up patriarchal rules bound up with the perceived necessity of keeping private property where it 'rightfully belongs, and to whom debt itself is owed. 
And how, pray tell, is debt paid off other than through labour time and objects which take snlt to produce or promissory notes promising what....labour time of the debtors.  

Nope.  The economic theory that he is most attracted to is 'chartalism'. Contemporary economists i.e. since the turn of the 20th century completely abandoned Smith's labour theory of value for political reasons, including the Chartalists. Michael Perleman's work consistently shows this as he is an astute reader of Marx and and the history of modern 'economics'. Check him out. He's well worth the read. 

Back in the mid-19th century, one could tell that U.S. President Lincoln was still influenced by the labour theory of value as exemplified in his statement, "Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not .". The political consequences of a President making such a statement today would be EXPLOSIVE! 

A surplus of any commodity will bring down its price in the market and skills are commodities. What the Black Death did was to lower the supply of labour power and increase its price. Graeber acknowledges this. Ownership of the product of labour is also dependent on access to the means of producing wealth and that access was closed off by privatising what had been the commons during the latter part of the feudal era when the landlord class was riding high. Closing off the commons drove the peasantry off the land (their means of production) and into the urban centres where they were obliged to sell their skills for wages to employers who owned the factories, mines and 'satanic' mills of commodity production. The oversupply of labour power brought about by privatising the commons, brought with it a rise in unemployment, lowering of wages and working conditions and vagrancy laws like those of Henry VIII--vagrancy was a capital crime in Henry's time. 

What to do with the unemployed? 

Put them in 'workhouses', debt and pick-pockets' prison; hang them or transport them off to the colonial gulags, America first and after the anti-colonial political revolution in America, to Australia after 1788, where the labour power was needed for exploitation under the wage system. 

Certainly, one should read Graeber's DEBT; but only after grasping what Marx was saying in terms of exchange-value's connect with snlt.  Reading "Value, Price and Profit" can help in that regard.  CAPITAL is, of course, more clearly definitive and definitely more enlightening--especially the early on in the chapter on money.

I close this review with a powerful observation from Marx which should be kept in mind when reading the final chapter of Graeber's DEBT, The First Five Thousand Years.

CAPITAL, Volume One

Chapter Thirty-One: Genesis of the Industrial Capitalist

The money capital formed by means of usury and commerce was prevented from turning into industrial capital, in the country by the feudal constitution, in the towns by the guild organisation. [3] These fetters vanished with the dissolution of feudal society, with the expropriation and partial eviction of the country population. The new manufactures were established at sea-ports, or at inland points beyond the control of the old municipalities and their guilds. Hence in England an embittered struggle of the corporate towns against these new industrial nurseries.
The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalised the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief momenta of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre. It begins with the revolt of the Netherlands from Spain, assumes giant dimensions in England’s Anti-Jacobin War, and is still going on in the opium wars against China, &c.
The different momenta of primitive accumulation distribute themselves now, more or less in chronological order, particularly over Spain, Portugal, Holland, France, and England. In England at the end of the 17th century, they arrive at a systematical combination, embracing the colonies, the national debt, the modern mode of taxation, and the protectionist system. These methods depend in part on brute force, e.g., the colonial system. But, they all employ the power of the State, the concentrated and organised force of society, to hasten, hot-house fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society pregnant with a new one. It is itself an economic power."

For an extensive discussion of Graeber's DEBT from other perspectives click here


  1. You'll never believe this, but borrowers of student loans in the U.S. have no consumer protections such as bankruptcy rights. Knowing this disadvantage of students, schools misrepresent their employment statistics to trick students into purchasing expensive education for jobs that already have an oversupply of labor. The government (the lender) perpetuates the myth that education leads to the land of opportunities when it really leads to the debtor's prison (figurative of course, the government is not going to put these victims of fraud up in a cozy debtor's prison.) At least I get to go to Maui and stay the the Four Seasons since I won a contest.

  2. Oh I believe it alright. Graeber tells many sad tales of producers like yourself, borrowing with the promise to repay as soon as their investment pays off. Investment in self, in education is fine. Investment when there is no market for the commodity you own generates levels of servility in societies dominated by ruling classes who already own the lion's share of the wealth the producers have laboured to create.

    Hope your stay in Maui is full of wowy-times.

  3. Good stuff. Excellent. I think Graeber gets the order of private property and war back to front because of Genealogy of Morals. I think Nietzsche said something to the effect that human relationships are established on the basis of war. One fights others and then settles for the kinds of relationships that one's strength allows, or something to that effect. I'm not sure if this was precisely it, but I remember writing in the margins that he'd got this order back to front.

  4. Interesting observation, Jennifer. Nietzsche's error is probably based on faulty, purely speculative anthropological observations. Lewis Henry Morgan's work in ethnography was considered on a level with that of Darwin's by Marx and Engels, as for the first time i.e. the 1870s, the social relations of hunter/gatherer societies took on some scientific shape.

  5. i find that to be a pretty good and interersting review though i've only read reviews of 'debt' including the one in jacobin. i've read a bunch of essays by graeber and haven't found them very profound or coherent---but anthropology often is more like a literary collection of anecdotes than a science (theorem'theory, proof/evidence) and i think thATS Often because they are not trained scientifically, and also for good reasons have become skeptical of 'grand theories' or narratives because of past ones (eg i can think of malinowski or levi-strauss). However, in science people like darwin, newton, einstein, etc had flaws in their grand narratives, but scientists revise them rather than ignore them.

    i guess debt does aim for a grand narrative in a sense (as does jared diamond) but i dont think its based much on fundamentals; and i think to a large extent current economic theory has the same problem---rather than starting with first principles, people work with existing theories (finance, macro/micro) and end up in a morass of equations---though this stuff has its own intrinsic interest, as does art, but its just not that connected to reality.

    anyway, i think your emphasis on locating the origin of value is 'spot on'---and i think is consistant with ecology in general, even before humans were around---and ecology is based on 1st principles (physics).

    of course, 'culture' really does make analyses from 1st principles almost impossible though this exists in ecology too (eg s jay gould or darwin himself on the problem of diversity or underdetermination; a good example i think is darwin/fisher theory of sexual selection---eg why do peacock's tails have value, or bird songs). I guess 'chartalism' is about this (since i'll have to google it again)---basically 'symbolic value' which is hard to quantify or derive---though i'm not sure its really distinct from 'marginal utility' except by name.

    a last note on graeber ---i think part of the problem in his stuff is in a sense 'alienation' which marx also wrote on---its easy to, say, blame the state for violence and all other sin because then one's own self can plead not guilty. (science in my view for example sees 'violence' and other 'sins' as part of nature, rather than something to shed crocodile tears about). cheers. (i am curious why you quit the IWW---because you stopped working? the iww is a fine idea, but i note alot of what they do is stuff like organize starbucks, which is a far cry from the original iww; we want free frappes while the construction workers and coffee plantation workers can fight for whatever they think they deserve).

  6. I quit the IWW because the members currently in the union seem unable to resist the lure of identity politics and the ideology of 'progressive nationalism'. There are now 'gender caucuses' in the union and the concept of 'race' is being given legitimation in the sense of an embrace of there being more than one race, the human race.

    Racism is something the IWW always fought, from the get-go in 1905, seeing it as, among other matters, a ruling class tactic for dividing the working class thus, sapping it of its real power--classwide class conscious organisation. The notion that there exist multiple races effectively splits class unity albeit through the swamp of a guilt-tripping leftist liberalism. And while there are actually two sexes (some would argue even more), there is absolutely no reason to ape the bourgeoisie (as the various and sundry bourgeois socialists do) by dividing the working class into gender based, holier than thou caucuses.

    All these changes represent a terrible tragedy and one which will play out in countless faction fights within and without the IWW in the future, as did the stupid fight over dropping the 'political clause'. The 1908 resolution on political parties and anti-political sects was a valiant attempt by then existing members to bridge that festering bit of reified ideological practice; but it continues to rear its head, especially amongst the self-identified anarchists in the union.

    When I was finally brought up on charges of 'racism' and 'sexism' for writing my views about such matters on this blog, I decided to throw in the towel and call it quits. The whole 'charges' section of the Constitution is an invitation to faction fights amongst power mongers, an invitation to purge and purify. Philosophical Idealists take the bait every time and its off to making One Big Union of the working class smaller, again and again. I still support the principles embodied in the IWW Preamble; but the Constitution has now been altered to the point of embracing a kind of New Left politics (see above) that I cannot in all good conscience call on workers to join. The emphasis, the focus of the union should be on the principles embodied in its Preamble, most importantly: organising consciously for the abolition of the wage system. That, as you point out, has been largely set aside in drives for quantitative membership counts which results in a membership that has little or no clue as to why the abolition of wage labour was inscribed in the Preamble.

    You know what's depressing? I mean, other than the neo-Depression. It's a left that that has been so immersed in bourgeois reformist tactics of 'boring from within' (something which disgusted early Wobs, but is now embraced) that it can't remember or doesn't have the guts or is too opportunistically engaging in reformist half-truths or idenitity politics and 'progressive nationalism' in order to 'provide leadership to the masses' to publicly call for the abolition of the wage system, the system which leads to the division of wealth and political power which is brought into clear focus by this Credit Suisse report :

    Depressing, sickening, revolting!