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Matthew Jordan's Reviews > Debt: The First 5,000 Years
Debt: The First 5,000 Years
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[August 2022 Review]
This is my second time reading Debt, and it's very clear that I had absolutely no clue what I was talking about the first time around. Re-reading my review from last time, I absolutely missed the point.
This time, I can confidently say that Debt is one of the most profound, radical, provocative, imagination-expanding, and perspective-altering books I've read in a very, very long time, and I feel like I've only barely scratched the surface of really properly getting it.
I think the reason I didn't fully grasp what was going on last time is because I hadn't participated in the economy in any meaningful sense. In other words, I had never really thought about what it meant to have financial responsibilities to others and to be in someone's service through salaried employment. I had had jobs, of course, but I was never doing them "for the money"; the money was always kind of a second thought. In adult life, however, money is often a central thought, and I started reading Debt at the very beginning of my first proper salaried job.
The thing I learned from that job—the thing which allowed Debt to make sense to me—is the sheer number of types of human relationship, and how relationships of all kinds can be shaped by money. What does it mean to be a peer? A boss? A patron? What does it mean, as an individual or as an institution, to be able to afford something? I think in order to really get Debt, you need to spend quite a bit of time living in these kinds of relationships, from multiple perspectives. It doesn't hurt to watch people raise money from rich venture capitalists, watch how wealthy people relate to each other, watch how people's lives change when they come into wealth, or lose their wealth, or go from being someone's employer to someone's peer, or watch complicated status games play out in a community where social rank is not determined financially, or is determined financially, or any of the other millions of microscopic ways that money interacts with human relationships.
Having now seen all of this up-close. I get it now. I really get it. Money is fake. Debt is fake. These are just conveniences, shorthands, ways of coordinating people. The thing that's real is human relationships and human actions. If I pay you money to do some work for me, what's happened is two things: first, you've agreed to be in my service, and in exchange, you get to now go get some people to act in your service, with the money I gave you. The "real" thing is the network of ownership and trust and reciprocity—money is just a way of mediating between people. Money is almost never about money. It's about the things money represents. Power, status, ownership, reputation. When we look at money and debt, *that* is what we should be looking at. It clicked for me this second time around. It really clicked. Now I can't unsee it.
Two key revelations from this read. The first is that any ongoing relationship between two people will always involve mutual debt. I edit my friends' essay; they host me on their couch; I bring them lunch; they give me a ride somewhere. There is no explicit accounting here, but there's a constant—and ideally lifelong!—ledger of gifts and favours, a perpetual incurring of unpayable debts. This is what it means to have a relationship with someone else. You're always owing the other, ad infinitum. This is why you cannot put an explicit price on, say, your friend giving you a ride. The whole point of putting an explicit price on anything is so that you can sever all obligations to the person you're transacting with. When I go to a restaurant, I pay an exact fare, and I never have to talk to anyone at the restaurant again. They gave me the food, I gave them the coin. All ledgers settled, all debts payed. If you pay your friend to drive you somewhere, you're essentially saying "everything's settled, we can go ahead and terminate this relationship right now if need be", which is the exact opposite of a friendship.
The second key realization is that I had no clue what it means to be able to afford something. It's really quite complicated. The basic answer is "if you have the money to pay for it", but there are plenty of people in our current world who do not have the money to pay for things, and yet they're able to take out loans, or call in favours, or ask nicely, and somehow get what they want. So maybe it's less about "having money" and more "having trust"—trust that you've got the money now, or will be good for it in the future, or are able to pay back in some way.
Graeber has this unbelievable passage where he has us imagine a world where someone, call him Charles, goes to get food or something, but doesn't have his wallet, so he gives the restaurant a piece of paper saying "Charles is good for the money, I promise", with a picture of Charles' face on the front, and since he is beloved and trusted by all, they accept this future promise. But then the restauranteur has to get a haircut, and instead of paying in cash, pays in the Charles IOU, reassuring the barber that Charles is super trustworthy. The barber, deeply trusting the restauranteur, is willing to accept it. The barber then continues this payment chain at the grocery store, then the grocer uses the IOU to buy concert tickets, and so on. All of the sudden, there's a little mini-economy based on a trusted promise. But then, says Graeber, imagine that Charles is in fact KING Charles, and the IOU is a bill with his face on the front—that's all that money actually is! It's just a promise—from the king, from the government, from whoever—to eventually pay the holder back. Of course, given that there's no gold standard anymore, there's no longer anything to pay anyone back in, but that doesn't really matter, because from the IOU story it's clear that you don't actually _need_ to ever pay anyone back in order for the money to work as money. All you need is for everyone to trust everyone else.
Of course, you cannot run a massive 21st century economy on trust alone—there are simply too many relationships, too much large-scale coordination, too much to keep track of. But locally, at small scales, I feel like I just want to engage in webs of mutual trust where no money is required. I don't want to live in a communist country, but I want to live in communist friend groups and families: from each according to their ability (in my case, editing essays, injecting fun and spontaneity into people's lives, a perpetual stream of new information and half-baked ideas), to each according to their need (in my case again, couches to sleep on). I have definitely felt this basic communism throughout my travels, and with each passing day feel that the more places we can eliminate money from our lives, the better. In other words, small-scale economies of mutual aid rule and more things should be like that. It's just better. How nice would it be to live in such a way that you can ask people for favours, and they can ask you for the same, and you can just give 'n' take in your little economy where everyone is in everyone else's debt? How fun would it to celebrate at the jubilee, annulling all the debts at year's end? Isn't that more fun than TAXES?
So those are my big new thoughts on Debt. I'm feeling extremely grateful for David Graeber. That dude understood something very deep about the human experience. What I've written here only captures a tiny fraction of what's actually discussed in the book. It's really a masterwork. But the key point, which I come back to again and again and again is: money is never about money. If a government "can't afford" to do something, that's almost always a question of willpower, or of political economy, or of broken trust relations. Money itself is really just a stand-in for these much, much more complicated, fundamentally unquantifiable things. Behind all decisions about money there are decisions and assumptions about how society should be structured, how people should relate to each other, who counts as worthy of our trust, and what we owe each other simply by being human.
[February 2021 Review]
Debt was an unusual mix: 3/4 boring and unfollowable, 1/4 radicalizing, fascinating, late-night-Wikipedia-binge-inducing, and altogether brilliant. It's a rare audiobook that can serve as both worldview-alterer and white noise machine.
This seems to be a theme among the books I've been reading recently. I'm discovering that my favorite nonfiction books do one of three things:
(1) Discuss a singular concept or thesis, often coining a term in the process (like "Grit" or "Flow" or "Bullshit Jobs").
(2) Summarize the academic literature on a specific topic.
(3) Tell a historical story as engagingly as possible (memoirs, biographies, narrative nonfiction).
Debt is some weird mix of all three. It tries to summarize the anthropological literature, tell a story about the emergence of money and states, and argue...something? My attempt at a summary would be "all human societies engage in informal relationships of debt and credit. The things we now understand as financial markets are created by heavy-handed states, slave traders, and other violent institutions."
The audiobook was read by Grover Gardner, who is about 100x better than the next-best audiobook narrator. From the first words, I realized how much I'd missed him.
This is my second time reading Debt, and it's very clear that I had absolutely no clue what I was talking about the first time around. Re-reading my review from last time, I absolutely missed the point.
This time, I can confidently say that Debt is one of the most profound, radical, provocative, imagination-expanding, and perspective-altering books I've read in a very, very long time, and I feel like I've only barely scratched the surface of really properly getting it.
I think the reason I didn't fully grasp what was going on last time is because I hadn't participated in the economy in any meaningful sense. In other words, I had never really thought about what it meant to have financial responsibilities to others and to be in someone's service through salaried employment. I had had jobs, of course, but I was never doing them "for the money"; the money was always kind of a second thought. In adult life, however, money is often a central thought, and I started reading Debt at the very beginning of my first proper salaried job.
The thing I learned from that job—the thing which allowed Debt to make sense to me—is the sheer number of types of human relationship, and how relationships of all kinds can be shaped by money. What does it mean to be a peer? A boss? A patron? What does it mean, as an individual or as an institution, to be able to afford something? I think in order to really get Debt, you need to spend quite a bit of time living in these kinds of relationships, from multiple perspectives. It doesn't hurt to watch people raise money from rich venture capitalists, watch how wealthy people relate to each other, watch how people's lives change when they come into wealth, or lose their wealth, or go from being someone's employer to someone's peer, or watch complicated status games play out in a community where social rank is not determined financially, or is determined financially, or any of the other millions of microscopic ways that money interacts with human relationships.
Having now seen all of this up-close. I get it now. I really get it. Money is fake. Debt is fake. These are just conveniences, shorthands, ways of coordinating people. The thing that's real is human relationships and human actions. If I pay you money to do some work for me, what's happened is two things: first, you've agreed to be in my service, and in exchange, you get to now go get some people to act in your service, with the money I gave you. The "real" thing is the network of ownership and trust and reciprocity—money is just a way of mediating between people. Money is almost never about money. It's about the things money represents. Power, status, ownership, reputation. When we look at money and debt, *that* is what we should be looking at. It clicked for me this second time around. It really clicked. Now I can't unsee it.
Two key revelations from this read. The first is that any ongoing relationship between two people will always involve mutual debt. I edit my friends' essay; they host me on their couch; I bring them lunch; they give me a ride somewhere. There is no explicit accounting here, but there's a constant—and ideally lifelong!—ledger of gifts and favours, a perpetual incurring of unpayable debts. This is what it means to have a relationship with someone else. You're always owing the other, ad infinitum. This is why you cannot put an explicit price on, say, your friend giving you a ride. The whole point of putting an explicit price on anything is so that you can sever all obligations to the person you're transacting with. When I go to a restaurant, I pay an exact fare, and I never have to talk to anyone at the restaurant again. They gave me the food, I gave them the coin. All ledgers settled, all debts payed. If you pay your friend to drive you somewhere, you're essentially saying "everything's settled, we can go ahead and terminate this relationship right now if need be", which is the exact opposite of a friendship.
The second key realization is that I had no clue what it means to be able to afford something. It's really quite complicated. The basic answer is "if you have the money to pay for it", but there are plenty of people in our current world who do not have the money to pay for things, and yet they're able to take out loans, or call in favours, or ask nicely, and somehow get what they want. So maybe it's less about "having money" and more "having trust"—trust that you've got the money now, or will be good for it in the future, or are able to pay back in some way.
Graeber has this unbelievable passage where he has us imagine a world where someone, call him Charles, goes to get food or something, but doesn't have his wallet, so he gives the restaurant a piece of paper saying "Charles is good for the money, I promise", with a picture of Charles' face on the front, and since he is beloved and trusted by all, they accept this future promise. But then the restauranteur has to get a haircut, and instead of paying in cash, pays in the Charles IOU, reassuring the barber that Charles is super trustworthy. The barber, deeply trusting the restauranteur, is willing to accept it. The barber then continues this payment chain at the grocery store, then the grocer uses the IOU to buy concert tickets, and so on. All of the sudden, there's a little mini-economy based on a trusted promise. But then, says Graeber, imagine that Charles is in fact KING Charles, and the IOU is a bill with his face on the front—that's all that money actually is! It's just a promise—from the king, from the government, from whoever—to eventually pay the holder back. Of course, given that there's no gold standard anymore, there's no longer anything to pay anyone back in, but that doesn't really matter, because from the IOU story it's clear that you don't actually _need_ to ever pay anyone back in order for the money to work as money. All you need is for everyone to trust everyone else.
Of course, you cannot run a massive 21st century economy on trust alone—there are simply too many relationships, too much large-scale coordination, too much to keep track of. But locally, at small scales, I feel like I just want to engage in webs of mutual trust where no money is required. I don't want to live in a communist country, but I want to live in communist friend groups and families: from each according to their ability (in my case, editing essays, injecting fun and spontaneity into people's lives, a perpetual stream of new information and half-baked ideas), to each according to their need (in my case again, couches to sleep on). I have definitely felt this basic communism throughout my travels, and with each passing day feel that the more places we can eliminate money from our lives, the better. In other words, small-scale economies of mutual aid rule and more things should be like that. It's just better. How nice would it be to live in such a way that you can ask people for favours, and they can ask you for the same, and you can just give 'n' take in your little economy where everyone is in everyone else's debt? How fun would it to celebrate at the jubilee, annulling all the debts at year's end? Isn't that more fun than TAXES?
So those are my big new thoughts on Debt. I'm feeling extremely grateful for David Graeber. That dude understood something very deep about the human experience. What I've written here only captures a tiny fraction of what's actually discussed in the book. It's really a masterwork. But the key point, which I come back to again and again and again is: money is never about money. If a government "can't afford" to do something, that's almost always a question of willpower, or of political economy, or of broken trust relations. Money itself is really just a stand-in for these much, much more complicated, fundamentally unquantifiable things. Behind all decisions about money there are decisions and assumptions about how society should be structured, how people should relate to each other, who counts as worthy of our trust, and what we owe each other simply by being human.
[February 2021 Review]
Debt was an unusual mix: 3/4 boring and unfollowable, 1/4 radicalizing, fascinating, late-night-Wikipedia-binge-inducing, and altogether brilliant. It's a rare audiobook that can serve as both worldview-alterer and white noise machine.
This seems to be a theme among the books I've been reading recently. I'm discovering that my favorite nonfiction books do one of three things:
(1) Discuss a singular concept or thesis, often coining a term in the process (like "Grit" or "Flow" or "Bullshit Jobs").
(2) Summarize the academic literature on a specific topic.
(3) Tell a historical story as engagingly as possible (memoirs, biographies, narrative nonfiction).
Debt is some weird mix of all three. It tries to summarize the anthropological literature, tell a story about the emergence of money and states, and argue...something? My attempt at a summary would be "all human societies engage in informal relationships of debt and credit. The things we now understand as financial markets are created by heavy-handed states, slave traders, and other violent institutions."
The audiobook was read by Grover Gardner, who is about 100x better than the next-best audiobook narrator. From the first words, I realized how much I'd missed him.
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I think there's another dimension of friendship, too, that cannot be covered with the metaphor of debt, and that's -- there is so much to friendship that is like, who owes who here? I just read this review, carefully, sending you my fave bits over text, which presumably made you happy on some level, but it made ME really really happy to read this and hear your thoughts too. So who owes who?
What is that part of friendship that is beyond favours and giving and receiving, but this other thing in which the individual actors themselves seem to dissolve? (Not that Graeber was trying to write a theory of friendship, but I'm just curious about it. This is the part where the metaphor of debt seems to break down in relation to friendships!)