Debt: The First 5000 Years by David Graeber

 

Disclaimer: This book should be mandatory reading in every Economics Graduate School. Unfortunately this is, and will, not be the case. Buy, download, borrow (or whatever) this book, and read it!

Review: David Graeber is an Anthropologist, and Debt: The first 5000 Years is an Economic Anthropological book. So unlike economists this book is not based on fairy tales and wonderlands, is based in historical facts (even though some times not rock solid historical facts) of societies, countries, tribes and individuals.

The subject is not the Debt of nations, but it is the concept of Debt itself, how did we humans came up with that concept? In the book we see the evolution of the concept in it’s religious, social and individualistic spheres, to finally become a economic concept. This trip from the origins to the modern use of the concept of Debt is wonderful and is the thesis of the book -give a historical background of the concept of Debt (from 5000 years ago until today).

In chapter 2 David Graeber completely destroys the myth of a Barter Economy! So next time any Professor comes up with the story of Barter Economy we can be armed with rock solid arguments and historical facts to destroy the Professor argument. Altought Graeber makes a huge effort to expose this, given his training and the objective of the book the consequences of this for Economic Theory are not completely expose.

I’ll try to give an important consequence: first Microeconomics, in Microeconomic Theory we cannot explain the rise of money and debt and we take it as ad hoc. Given this choice how can we realisticly integrate it in our models? Perhaps this is the reason why integration of money in the General Equilibrium Theory has failed (or when accomplished with very unreal assumptions behind), we need a evolutionary (historically based) theory of money in order to be able to understand the emergence of money, his role and his characteristics.

Furthermore in this chapter and in many others he attacks Adam Smith and his naive and biased view of the world, exposing him as a Utopian that was describing a world he ought to live and not the world he was living in. The attacks are well founded throughout and at the end of the book Adam Smith does not look good as the “father” of a discipline…This undermines the credibility of the majority of economist that buy on the stories of Adam Smith.

David Graeber exposes in length many societies in several different historical eras in order to show their resemblances, differences and the consequences of these. It’s a wonderful read and I learned a lot, although I recommend further reading in order to really grasp the historical contexts of the periods presented (there are several references in each chapter).

One thing that nagged me was that the author jumps a lot within chapters to different eras (already exposed or not), and within each era sometimes events far apart in that era are contiguous in the exposition so it’s a bit confusing, 100 years or 200 years apart is a lot and so I felt lost sometimes asking myself what happened in the middle of those two events, but nothing very disturbing.

This historical analysis of several eras is amazing and highly enriching! I was craving for more, I found the book too short on this! Not because it didn’t cover enough but because it was expose is such a way that reading it was a pleasure and so I wanted more.

One great thing was the fact that David Graeber knows and cites French (and other European) authors! Sometimes I wondered if Americans knew that there exists foreign Academics (but I start to realize that’s only in Economics…). Since I’ve read many of the authors cited I found that he did justice to them and also the the School of thought they represent and on which Graeber inserts himself. Throughout  the book we see Graeber giving credit to great Academics that shaped his ideas, again not very common in American scholars (once again maybe is only in Economics).

The weaker part of the book is the last chapter which analysis the modern era, it is weak because I felt the author has much much more to say and it could’ve say it in a more deep way if he had given more space to that section (maybe he had space limitations). But is too bad, maybe with more 100 pages for that section it would’ve become a reference of modern analysis, in it’s current state is short exposition of some of the author ideas. Maybe in a future edition more space could be given to that section!

We highly recommend reading this book! It should be a must read for every Economist (or ought to be). It’s inspiring, you will learn a lot, it will highly expand your vision of the world in historical and anthropological ways and I hope will make people see that there other ways to live and see the world not only this Capitalistic destructive view of the world.

 

 

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