Table of Contents:
- 8a. The Military-Coinage-Slavery Complex
- 8b. The Break Down of the Military-Coinage-Slavery Complex
- 10a. The Early Middle Ages: The Rise of Religious Wealth and the Overcoming of Restrictions on Usury
- 10b. The Later Middle Ages: The Re-establishment of Trade Networks
- 12a. Bank Runs
- 12b. Inflation
- 17a. Capitalism as an Unsustainable Economic System
- 17b. Capitalism as an Illegitimate and Corrupt Economic System
Debt is certainly a topic of deep interest and import these days, what with future prosperity seemingly threatened on all sides by a combination of personal, commercial, and national debt. A fact that has been brought home with particular poignancy in recent times by the role that debt played in the latest global financial crash of 2008, and the continuing threat of growing consumer debt and national debts in places such as Greece, Ireland, Portugal, and now Italy, and, of course, the US. According to Anthropologist David Graeber, author of the new book ‘Debt: The First 5000 Years’, debt takes on an even larger significance when we trace its history, since this exercise allows us to gain a new and more complete understanding of economics as a whole, and our modern capitalist system in particular (not to mention several other aspects of the human condition to boot). The story of debt takes us from the origins of money itself; through to the age of slavery and conquest; on to the origins of the major world religions (with their near universal prohibitions on usury); through to the middle ages, and the beginnings of capitalism and the modern banking system; and finally on to the modern age itself with its national currencies, central banks, and commitment to market capitalism.
While this story is interesting in its own right, Graeber’s main argument here is that tracing the history of debt unearths some uneasy truths and deep flaws in the nature of modern capitalism, and it is high time, he proposes, that we rekindle the conversation about how and with what we might replace it.
According to Graeber, capitalism is faced with two fundamental flaws. To begin with, its assumptions about human nature are both false and immoral. Second, it is ultimately unsustainable.
With regards to the first flaw, Graeber complains that capitalism is a completely impersonal system that treats people not as they truly are—that is, moral agents, and nodes in a nexus of interpersonal relationships—but as isolated, impersonal, self-interested entities; transaction machines, as it were, and ultimately reducible to mere matter and mathematical calculations (the traditional narrowly self-interested and materialist homo economicus of classical economics lore). According to Graeber, seeing people in this way flies in the face of our intuitive way of regarding ourselves and one another, and leads us into immoral behaviour that we would not otherwise stoop to or conceive of as conscionable (for example, holding others to their monetary debts [including developing countries], come hell or high water).
With regards to capitalism’s second flaw, Graeber argues that capitalism is ultimately unsustainable since it depends on perpetual growth (quantifiable at a rate of 5% per annum), which simply cannot be maintained on a finite planet.
Graeber’s arguments that capitalism is essentially a corrupt and unsustainable economic system remain ultimately unconvincing. Nevertheless, it is clear that tracing the history of debt does add to our understanding of history, economics, modern capitalism, and indeed many other aspects of the human condition, and, as such, is a worthwhile project on this count alone.
In what follows, I will retrace the major steps in the history of debt as presented in Debt: The First 5000 Years. I will also outline David Graeber’s main arguments with regards to the faults of modern capitalism. Where I am unable to resist, I will provide a response to Graeber’s line of thinking.
*For prospective buyers: To get a good indication of how this (and other) articles look before purchasing, I’ve made several of my past articles available for free. Each of my articles follows the same form and is similar in length (15-20 pages). The free articles are available here: Free Articles