Debt: Reading 1 (ch 1&2)
The book opens with a personal anecdote about a dinner party in which Graeber discusses the finer points of IMF policy and their debt recovery mechanisms with a guest at the dinner party and to his astonishment is struck by her arguments on Third World debt, claiming as she did that “surely one has to pay one’s debts”. It is this sentence and this anecdote that serve as the primary hook in the opening chapter. For Graeber the obligation to repay debts becomes more than an economic assertion, but takes on a moral character of accepting one’s responsibilities and of accepting the implications should one refuse to pay debts. To this Graeber links his own personal experiences and some academic discussions to note that there is a moral confusion regards the necessity to pay one’s debt, introducing us to one of the ostensible main strands of the text: that our current understanding of debt (and money – as for Graber a history of debt is also a history of money) contains many misconceptions and is contestable.
To be sure, the remainder of the chapter devotes discussion to various moral and religious obligations associated with owning and owing debts, which are dissected with much humour and insight. This concludes with a brief statement on the purposes and roles of the text: to ask what humans and society could be like; to demonstrate that our misconceptions reduce human relations to notions of exchange; to question the origins of money; and to demonstrate the role of violence within principles of exchange.
Much discussion here was centred on the anecdotes and stories recounted in illustrating religious notions of debt. Time was also devoted to speculating upon the violence of exchange, which some of the group linked to the work of Christian Marazzi.
So far, so good.
The theme of challenging knowledge is continued in chapter 2 where Graber aims to dispel the myth of barter. Taking economic textbooks as the starting point, the idea of a barter system, argues Graber, is purely imaginary as they are predicated on various economic myths and assumption. Key to this argument is Graeber’s attack on what these texts indicate as the origin of monetary exchange. Prior to money, economists imagine a barter economy where market participants trade goods to meet their individual needs and wants, so long as there is a mutually beneficial outcome in the trade (or in the language of these economic texts, that there is a double coincidence of wants). Barter economies outlive their usefulness in situations where the trade of goods is not mutually beneficial, and it is here that economists theorise the origins of money as a medium of exchange to facilitate the trade.
It is the use of the word “imagine”, that Graber takes issue with, as for him the scenario in most economics textbooks is the same, that to debate the origins of money, the texts ask readers to: imagine an economy, much like our own but without money, with some unspecific space-time location. This act of imagination for Graeber creates a sustained economic myth on the origin of money, which is also linked to Adam Smith’s writings on the creation of money and his insistence on money and markets reflecting human’s drive toward trading and exchange. Again, Smith’s account on the origin of money is contested by Graber by a series of historical developments, notably a sustained section on Mesopotamian systems. Smith’s insistence on exchange is also questions by reference to gift economies.
So far, so good (..) so what!
Well this is where the group’s main points of contention arose. What is the value in visiting the opening chapters of undergraduate economic textbooks in questioning the origins of money?
Whilst it is crucial to Graeber’s project to question economists’ theories on the origins of money, that they presuppose a barter economy in the context of contemporary monetarised economies, who exactly is this they? Which economists does Graber refer to here? Is it simply a matter of questioning the received wisdom of the mainstream academic position? Or are professional economists conflated in this blanketised coverage?
Equally there was some debate over the use of Smith. The group readily acknowledges the use of Smith as an historical marker in the maintenance and creation of the myth of the inception of money and credit systems, however, in so doing members of the group felt that Graeber glosses over the classical liberal position of Smith’s philosophy and instead reads Smith on the role of money as though Smith is a neo-liberal.
While this may be a moot point, it is nonetheless an interesting point for discussion: does Graeber’s questioning of the received wisdom become any(more/less) valid when one can question his reading as contestable? This is particularly important as one main thrust of the project in Debt is to set out on questioning the limits of society and what it is to be human.
We are sure that the answers to these questions will be provided over the next sessions, and we invite you to join us in the remaining sessions (documented here: http://www2.le.ac.uk/departments/management/research/units/cppe/Archive%20Activities/2012%20Summer-Reading%20Group-Debt.pdf) or to virtually debate the material using the group updates as a means of/for intervention.
 With apologies to Megadeth…