Contrary to the assumption that the primary function of debt was to ensure that the lender grew richer from the interest, it seems that that key issue was labour. In a situation with plenty of land and scarce labour, all sorts of means were used to secure labour. One was debt. Why else would a wealthy person lend money to an impoverished peasant? Would it not be more profitable to lend to another wealthy person? It seems not. Since it was routinely impossible for the debtor to pay off even even the interest, he would need to work the land of the lender until the ‘debt’ was paid off. The lender was in no hurry to see the debt repaid. As Steinkeller observes:

Assuming that most loans were made with other objectives than the interest-generated profit in mind, it follows that, in such circumstances at least, interest was a tool and not an economic end in itself, being therefore devoid of real economic value. Its rate was largely irrelevant vis-à-vis the amount of the loan, except that it had to be sufficiently high to make it impossible for the borrower to repay the capital (‘The Money-Lending Practices in Ur III’, 2002, p. 113).


A small insight into how the German approach to debt operates, at least on a personal level. Earlier this year, I purchased a ‘Bahn 25’ card: at 25 Euro it gives you 25% discount on all travel on the German rail network for three months. The German network is adequate, not brilliant, but the deal sounded attractive. Soon enough, the outlay seemed to be returned. Generous buggers, I thought, especially if you book early, get the 29 Euro ticket for anywhere and then an additional 25% off.

But … when the initial period of my Bahn 25 card ran out, I was sent a friendly looking notice about renewing it, now for a year. This time it was over 60 Euro. Since this one wasn’t worth my while, I simply ignored it. Before I knew it, a stern letter arrived in the mail (or in Christina’s letter box in Berlin). Pay up, it said. You have seven days or the debt collectors will call, with leather straps, pliers and chains, in order to extract that amount. A flurry of inquiries ascertained that I had automatically, without any acquiescence on my part or even notification, been signed up for the year-long contract and that I was now – without warning – indebted to the German state.

A small insight into the experiences of Greece, Spain, Portugal, Italy, Ireland, let alone all those countries in eastern Europe?

While there is a plenty of material one can use from David Graeber’s Debt: The First 5,000 Years, most of it appears on the edges, in insights scattered here and there. These include, in random order: a market is not necessarily tied to profit, indeed, most markets in history have not had profit as their prime function, if at all (which leads one to the logical position that capitalism and markets are by no means synonymous and may be opposed to one another); debunking Adam Smith’s quaint founding myth of the origins of ‘the economy’; labour under capitalism has hardly ever been ‘free’; the reason why the treasures of the Americas were mined at all was due to Chinese need for bullion (90% of the total output) – most ships simply sailed straight there; redistributive economics is based on the violence and war of warrior aristocracies; markets always arose as a side product of the state’s activities, rather than state and economy being separate spheres; his redesignation of the Near East as the Near West, indeed that the West begins somewhere around Iran and Iraq, since from a global perspective there was little that distinguished Muslim, Christian and Jewish parts of the world.

Most of these points you can find elsewhere, but Graeber’s genius is to weave them into an intriguing narrative. But the problems are greater than these insights. To begin with, he is an ardent advocate of the superior role of anthropology, especially in response to economists. This may take the form of some great accounts (the Tiv from Africa is one example, which I read as an instance of the imaginary resolution of a real contradiction), but it usually ends up in a kind of primitivist argument: the true insight into human nature and interactions is to be found in these anthropological investigations into tribal peoples from Africa, Greenland, Asia, the Americas and – Graeber’s own field of research – Madagascar. The upshot is an assumption he shares with Adam Smith et al: human nature is the same wherever we look. The trick is to identify how we tick. All of which leads to a trans-historical assumption, embodied in the inadequate suggestion that all human societies operate on the basis of interwoven patterns of baseline communism, reciprocity and hierarchy.

Further, for a long book that deals with a central economic, social and political issue, there is no systematic economic theory that underpins his argument. For instance, he accepts the common position that the prime economic motor in some periods of history was plunder. The catch here, as Marx drily observed, is that you need something to plunder. Another example: despite his extended discussions of slavery and its crucial role in relation to coinage, one searches in vain for any theory of class. He has many opportunities, such as the ‘military-slavery-coinage’ complex as a way of relieving debt pressure in ancient Greece (228-30). This cries out for a class analysis, but none is forthcoming. And for my purposes, ancient Mesopotamia plays a crucial role in his discussion, for it provides the earliest evidence of what he calls a credit-based economy with far-flung international ‘trade’. Not only does he rely almost solely on the problematic Keynesian approach of Michael Hudson, but he provides no treatment of the crucial economic factor here, agriculture, let alone any effort at making sense of ancient economies.

He also buys into that intellectualist fantasy of the Axial Age, which he extends from 800 BCE to 600 CE. The Buddha, Confucius and Pythagoras were all alive at its beginning, thereby setting in train debate, intellectual schools, traditions of thought. But why is this an intellectualist fantasy? It imagines that the activity of intellectuals may determine a great stage of world history.

Ultimately, his criticism of capitalism is moral. I was taken with his proposal that the absolute thug, Hernan Cortes, is the quintessential image of the entrepreneur – ostentatious, debt-ridden, cunning, unbelievably brutal, with an unhealthily high opinion of himself. Despite this promising beginning, the argument boils down to morality. Self-interest, that key element of capitalism, is simply a derivation from theological notions of sin. That is, capitalism valorises and gives free reign to one of the basest motives of human beings, greed. That point might be worth making when scoring a cheap shot against some dull-witted economist, but it doesn’t get you very far.

A case in point is Graeber’s curious valorisation of village life in Europe before it was torn up by industrialisation and the ideology of self-interest. Despite the gossip, back-biting and scandals, above all people lived together in trust and communal ‘love’. They spent time with one another, valued friendships and family, extending credit to one another in a complex web without coinage. After all, since you know everyone and can trust them, such credit is not a problem. I hardly need to point out that this is a romantic ideal, a fantasy-land that never existed. But the stronger point is that production of such a life takes place under capitalism, that the ‘traditional’ is itself a product of the modern. Apart from that, I grew up in such places, small villages and towns in country Australia. The reality is that you can’t have bucolic bliss without village idiocy – the lantern jaw, the glazed eye of just a little too much inbreeding.

As a result, Graeber’s solution is quite lame (I only hope that his publisher wanted something more positive at the end). It’s a biblical-style Jubilee, a global cancellation of debt. Not only does this contradict his romanticised image of a community based on trust and mutual credit, but it fails to realise that a Jubilee is a system-restoring device, not one that leads to anything new.

This is as common as it’s problematic. A child owes a debt to society (and its parents, who are part of this society) for having raised it, educated, fed and kept it healthy. A prisoner must pay his or her debt to society for something a society has deemed wrong. An activist may become involved in, say, removing graffitti as a civic duty, a debt partially paid to one’s society. In the end this debt can never be repaid fully, so we keep on paying it – in taxes, volunteer work, voting, doing one’s bit for the good of society, or even making it better.

But what is this ‘society’? As Graeber points out in a good point in an otherwise increasingly problematic work, I certainly don’t think of what I do as part of my responsibility to Sweden or North Korea. What I really mean is the nation of Australia, a neatly contained and artificial demarcation. And that nation is maintained by a problematic ideology, odious rituals, border controls, indigenous sublimation, passports, patterns of inclusion and exclusion (only those with permission may avail themselves of medicare and so on).

Actually, I’d rather overthrow such a society. In that light, I’m all for social breakdown.


At the forefront of all serious revolutions in history is the simple slogan: cancel the debts and redistribute the land. As a result, one of the first acts after a revolution is to destroy tax and debtor records, as well as land contracts.

Why? Debt involves not the generous offer of support from a creditor to a lender, but the net flow of wealth and power to the creditor. The current situation in Europe is but the latest example of this pattern of exploitation. Thus, any serious revolution destroys the pattern.