Notas sobre el origen de la deuda / Graeber

This semester’s book forum is dedicated to “Debt – the First 5,000 Years” by David Graeber. If you follow social theory, you may know Graeber as the author of Fragments of an Anarchist Anthropology. He’s also an outstanding anthropologist, having written the highly lauded Toward an Anthropological Theory of Value. He’s also recently drawn attention as an inspiration and organization for many Occupy events.

Debt is Graeber’s latest book. I think it is to be taken seriously because it offers a number of claims that are very important to consider. This will post will lay them out:

1. Exchange is carried out in non-industrial societies in terms of a debt economy. Barter does not exist in most social situations.

2. Therefore, the classical economic explanation of the origins of money is wrong. This is not merely a mistake of intellectual history, it undermines much of the foundations of neo-classical economics.

3. In fact, debt comes first and then money is used to formalize debt. It is not the case that money precedes credit.

4. Debt is used as a mechanism of social control.

5. Societies have debt/credit cycles that lead to severe social economic crises, which often result in catastrophic resolutions.

As you can see, this book is ambitious. It is nothing less than an attempt to completely undermine the traditional view of credit and debt as normal and functional features of the market economy. Over the next few weeks, we’ll get into these arguments in some detail.



I often teach the graduate course that introduces students to major themes of macro-sociology. I start off with rational choice theory, which, as you can imagine, triggers teeth grinding rage. I then ask students: “If people aren’t following their preferences, then what are they doing?” Answer: silence.

Of course, there are good answers to this question. Most economists, especially behavioral economists, would probably argue for a model that is close to rational choice, but includes biases. Sociologists often take this a step further and argue that people respond to social conventions, follow norms, heuristics, or employ cultural tool kits. The difference between the textbook rational choice model and what many sociologists believe lies not in the maximizing part of the model but in how individuals construct the options and judge alternatives.

I bring up this pedagogical example because contemporary economics is built on a number of simple assumptions that appear obvious and incontrovertible but can actually be successfully critiqued. The surface plausibility of standard economics is hard to argue with by novices, which is why first year graduate students often get stumped by the question I asked.

One important difference between economists and other social scientists lies in their willingness to entertain serious alternatives to the rational choice model. Psychologists are  so used to thinking about different models of decision making that they find the insistence on the rational choice model a bit puzzling.

The problem, however, is that for many routine social science questions, it is hard to articulate a simple alternative model that is easy to understand and can easily be the foundation for normal science. The rational choice model has handful of simple axioms, it’s easy to formalize, and easy to tweak.


So what does this have to do with David Graber’s book on this history of debt? Aside from being a radical criticism of debt, Graeber offers one of the few successful attacks on academic economic theory. He doesn’t attack the rational choice model directly. Rather, he, in my view, attacks one of the core ideas of economics that is tied to the rational choice model.

When you read the nitty gritty of economics, you often see the following jump. You start with a description of the rational choice axioms: people have options, rank them, and act upon them in a consistent way. The jump is this: money is the natural way that you should figure out what people prefer. Money is the natural expression of needs and the money economy is the natural resolution of the economic problem of distributing goods. Without money, you’d need to barter to pursue your own personal goals and that’s very inefficient.

The first chunk of Graeber’s book is a anthropological account of barter. Where does it exist?   Is it actually true that the money economy represents a solution to the problem of barter? Graeber claims that barter is actually exceedingly rare. According to him, barter makes little sense at all. Why pile up on specialized goods and wait for other people to pile up on what you want and then trade? That’s bizarre.

Instead, what happens in most non-monetized cultures is that people engage in generalized exchange. If you need X, Fred will give you X, but you (or someone else in the group) has to help Fred sometime later. Thus, most groups engage in a debt economy, not a direct trade (barter) economy. Of course, there are some exceptions, such as trade between hostile groups or prisoners from Western societies. But overall, Graeber claims that the overwhelming theme in economic ethnography is that barter simply doesn’t exist.

The conclusion? Adam Smith was wrong to say that people have a natural tendency to “truck and barter.” Why? It’s a strange, unintuitive form of economic exchange. Therefore, money is not the natural solution to barter, since barter, for the most part, does not exist.


According to Graeber, the anthropology literature, composed of observations of dozens and dozens of societies, undermines the link between self-interest and modern capitalist institutions. Classical economists, as well as their contemporaries, have made a deep error in assuming that a Western economic practice is the natural functional solution to economic issues that arise in all societies. I myself have even promoted this argument in my undergraduate class on economic sociology.

We’ll discuss the next step in Graber’s argument next week, but for now, I’ll conclude on the implications of Graeber’s attack on the barter-money link. If direct exchange of goods (barter) is not the embodiment of rational action, then what is? The answer, I think, is generlized exchange. A true believer in economics text books would correctly point out that generalized exchange can be described in terms of utility functions. Fair enough, but that’s not the point.

The real deep point is that monetary exchange, credit markets, and a whole host of other modern financial institutions are in no way natural. Furthermore, there’s actually an alternative to price theory, which uses money as it’s main variable (e.g., “clearing price”). The anthropologist’s version economics would start with indirect exchange as the main variable, which has a better claim to universality than prices, and then describe all institutions as recorders and shufflers of debt.


In the last installment of this book forum, I argued that Debt could be read as an attack on the functionalist view of money, which in turn, I think, is an indirect argument on the current state of economics. In this installment, I’ll delve into the middle section of the book, which can be read as another critique of contemporary economic history and theory.

The crux of Debt is a historical review of the origins of money and credit. The big empirical claim is that barter does not exist in most societies, so money can’t be seen as a naturally evolved institution that solves the problem of barter. The next claim that Graeber makes in the middle of Debt is that there is a very important difference between monetized economies and what he called “human economies,”  and that very bad things happen when the two mix. Money is the catalyst for these bad things.

Let’s move on the key distinction in the middle of the book. Graeber views “human economies” as social institutions where people (and objects) are unique and strongly embedded in a web of social relations. Even when money is used, it’s more as a symbol of an obligation or relationship that can’t be payed. It’s not a literal exchange. In contrast, commercial economies are based on using money to exchange impersonal goods that are interchangeable.

In reviewing historical accounts of servitude, slavery, and other forms of domination, Graeber describes how people in human economies become dominated when the come into contact with commercial economies. Essentially what happens is that people participate in spiraling debt traps, which often end up with people pawning themselves and their families in order to seek status, or to pay off “debts” created through violence. Money is what allows people to willingly subjugate themselves to others. Graeber describes this in detail for the Atlantic slave trade and suggests that a similar processes occur in other regions where symbolic debt economies mix up with monetized economies (e.g., Southeast Asian hill people contacting monetized Asian kingdoms).

As you can imagine, Graber (p. 210) makes a striking claim at the end of this section of the book where he claims that modern life is essentially willful subjugation based on a hidden system of violence:

Formal slavery has been eliminated, but (as anyone who works from nine to five can testify) the idea that you can alienate your liberty, at least temporarily, endures. In fact, it determines what most of us have to do for most of our waking hours, except, usually, on weekends. The violence has been largely pushed out of sight. But this is largely because we’re no longer able to imagine what a world based on social arrangements that did not require the continual threat of tasers and surveillance cameras would even look like.

If one were to accept Graeber’s thesis, then one must abandon the view that money is a functional requirement of the economy. Instead, it is a system of illusions that mask the violence that converted pre-modern people into docile modern subjects. Norbert Elias minus the salad fork, but with a credit card, if you will.

After the New Year: societies and debt cycles.