I’ve only just begun what will no doubt be a long exploration of the ideas put forward by anthropologist (and anarchist) David Graeber, author of Debt: The First 5,000 Years.
Graeber supposes that our traditional reading of history, that debt followed barter, is backwards. He posits that debt comes first, here in a much discussed interview with naked capitalism:
[W]hat anthropologists observe when neighbors do engage in something like exchange with each other, if you want your neighbor’s cow, you’d say, “wow, nice cow” and he’d say “you like it? Take it!” — and now you owe him one. Quite often people don’t even engage in exchange at all — if they were real Iroquois or other Native Americans, for example, all such things would probably be allocated by women’s councils.
So the real question is not how does barter generate some sort of medium of exchange that then becomes money, but rather, how does that broad sense of “I owe you one” turn into a precise system of measurement — that is: money as a unit of account?
By the time the curtain goes up on the historical record in ancient Mesopotamia, around 3200 BC, it’s already happened. There’s an elaborate system of money of account and complex credit systems. (Money as medium of exchange or as a standardized circulating units of gold, silver, bronze or whatever, only comes much later.)
So really, rather than the standard story — first there’s barter, then money, then finally credit comes out of that — if anything its precisely the other way around. Credit and debt comes first, then coinage emerges thousands of years later and then, when you do find “I’ll give you twenty chickens for that cow” type of barter systems, it’s usually when there used to be cash markets, but for some reason — as in Russia, for example, in 1998 — the currency collapses or disappears.
It really looks from the anthropologists that Adam Smith was wrong–that we are not animals that like to “truck, barter, and exchange” with strangers but rather gift-exchange pack animals–that we manufacture social solidarity by gift networks, and those who give the most valuable gifts acquire status hereby.
A more skeptical Tyler Cowen:
Do you seek an overly verbose, sometimes fascinating synthesis of economic anthropology, early 20th century credit theories of money, and the history of debt? The book overinterprets early historical evidence and falls apart as it approaches contemporary times, still it has a vitality which many other tracts lack.
A Big Picture Great Minds interview:
A Tech Nation interview with Moira Gunn.