Debt

Economics textbooks tell a story in which people bartered, invented money to make trade easier, and only later developed credit. Graeber, an anthropologist, argues that the anthropological and historical record shows no barter economies of that kind. Credit and debt came first, recorded in Mesopotamian accounts long before coins, and history since has swung between eras of credit money and eras of gold and silver bullion.

The book is as much about morality as money. Graeber traces how the language of debt shaped ideas of sin, guilt and redemption, and ends by arguing that modern debt crises are political choices rather than natural laws.

The book became an unexpected best seller and a touchstone for Occupy Wall Street, in which Graeber was a major figure. It won the 2012 Bateson Prize from the Society for Cultural Anthropology. Robert Kuttner in the New York Review of Books found it exhaustive and engaging but at times exasperating. Economists including Brad DeLong and George Selgin disputed parts of its economics, and Mike Beggs in Jacobin argued that anecdotes spanning 5,000 years do not add up to political economy.

Read it for the history and for an outsider's challenge to assumptions most finance people never question, and pair it with a conventional monetary history.

1. Credit came before cash. Graeber's reading of Mesopotamian records and ethnography suggests that money began as a unit of account for debts, which puts credit, not coins, at the center of monetary history.
2. Debt is a moral claim as well as a contract. The belief that all debts must be repaid is a moral principle that societies have applied selectively, often protecting creditors with state power.
3. Debt cancellation has deep precedent. Ancient rulers routinely wiped out consumer debts to prevent unrest, which gives context to modern arguments over sovereign restructuring, student loans and mortgage relief.
4. Money regimes cycle. Eras of credit money and eras of hard metal alternate, and Graeber places the post-1971 fiat dollar system at the start of a new credit era.
5. Read the critics alongside. Economists dispute his account of barter and many of his historical claims, so treat the book as a provocative frame rather than settled history.

The book moves from a moral puzzle to a theory of money, then through four historical eras.

1. The moral confusion of debt. Graeber opens by asking why the principle that debts must be repaid feels both obvious and troubling, and why the language of debt carries so much moral weight.
2. Against the myth of barter. He argues that there is no evidence for barter economies of the kind Adam Smith imagined, and that credit systems predate coinage.
3. Primordial debts, honor and degradation. Chapters on theories that tie money to obligations to gods and the state, on how human beings came to be priced in marriage, feud and slavery, and on how debt shaped ideas of honor.
4. Credit versus bullion. He proposes that history alternates between periods dominated by virtual credit and periods dominated by precious metal, then follows that cycle through the Axial Age, the Middle Ages and the age of capitalist empires from 1450 to 1971.
5. After 1971. The final chapter treats the end of the gold standard as the start of a new credit era and argues for a modern form of debt jubilee.

A revised and updated edition of the international bestseller. Graeber, one of the early organisers of Occupy Wall Street and a well regarded academic, presents a stunning reversal of conventional wisdom; he shows that before there was money, there was debt. For more than 5000 years, since the beginnings of the first agrarian empires, humans have used elaborate credit systems to buy and sell goods, long before the invention of cash. It is in this era, Graeber argues, that we first see a society divided between debtors and creditors.