‘Debt: The First 5,000 Years’ reviewed by Mary Mellor

Debt: The First 5,000 Years

Melville House, New York, 2012. 544pp., £14.99 / $32 pb
ISBN 9781612191294

Reviewed by Mary Mellor

About the reviewer

Mary Mellor is Emeritus Professor in Social Science at Northumbria University, Newcastle upon Tyne. …


This is an Aladdin’s Cave of a book. It is full of thought-provoking gems: evidence, anecdotes, insights, challenges. The scholarship is immense, covering fields from anthropology, politics, economics, philosophy, history, sociology, religion, culture. To mix metaphors it is a mine of information. However, it has to be mined. The information comes so densely packed, crossing disciplines and eras, that the reader is almost overwhelmed. There are almost forty pages of references and sixty pages of footnotes. It is one of those books in which the footnotes almost stand alone as a source of information and debate. Opening the page at any point will engage the reader in some intriguing nugget of information. The downside is that it is hard to grasp the threads of the book. After several enthusiastic attempts to start reading at different points it became clear this is a book that cannot be read systematically. It must be read from page one or treated more like an encyclopedia.

It is a long book that seems to fall into two halves that could almost form the basis of separate books. I found the second half of the book much easier to read than the first. The first half (chapters one and four to seven) addresses the idea of debt in the context of a wider, mainly anthropological, discussion of the nature of exchange and socio-economic relations in human societies. The discussion draws on anthropology, religion, philosophy and literature. The titles of the chapters indicate the breadth of the issues discussed: Cruelty and Redemption, A Brief Treatise on the Moral Grounds of Economic Relations, Games with Sex and Death, Honor and Degradation, or, On the Foundations of Contemporary Civilization. Although there was lots of interesting material I felt the discussion needed more signposts to guide the reader as to the specific relevance to debt. For example, the last of these chapters had the subsections: ‘Honor is Surplus Dignity’, `Honor Price (Early Medieval Ireland)’, `Mesopotamia (Origins of Patriarchy)’, `Ancient Greece (Honor and Debt)’, `Ancient Rome (Property and Freedom)’, and many other sections separated only by dots. Graeber summarises his aim in these chapters as being to develop a concept of human economies. For Graeber, humans are `each a unique nexus of relations with others’. There can be no exact equivalence between people or between people and things. This pure condition is destroyed when humans become objects of exchange, particularly women in marriage, or slaves in war. Violence is the driving force. `it is only by the threat of sticks, ropes, spears, and guns that one can tear people out of those endlessly complicated webs of relationship with others (sisters, friends, rivals)’ (208). His critique of violence, hierarchy and residual or actual forms of slavery form the main link with the second part of the book.

The second half, which I found most helpful and relatively easy to read, contains a history of money and debt and a critique of conventional economics. It spans Chapter two and half of Chapter three and from Chapter eight onwards. Chapter two opens with the declaration that debt must be understood in relation to money, `a history of debt … is … necessarily a history of money’ (21). Graeber frames his analysis in the context of conventional and heterodox debates within economics about the origin and nature of money. His main challenge is to the myth of barter, the oft repeated history of money in economic texts that assumes economies were originally based on barter until the inconvenience of achieving a ‘coincidence of wants’ led some bright spark to invent precious metal coinage. Evidence from the 5,000 year history he explores reveals no economies based on barter, but does show money and debt to be deeply rooted in human history. An important distinction for Graeber is between debts that reflect a social relationship and those that can be quantified. Where debts have a social role they may remain unpaid representing an ongoing social relation. Debt becomes based in money when the question of repayment is more specific and requires quantification. However, through most of history, money remained solely a measure and record of values. It did not represent value in itself, that is, intrinsic value.

For Graeber, money did not originate in trade or as precious metal. Instead, `the real origins of money are to be found in crime and recompense, war and slavery, honour, debt and redemption’ (19). This is the history that Graeber seeks to present, he argues that money preceded markets, particularly capitalist markets, and was for most of early history social or political in nature. The critical distinction is between money as a social form and money as intrinsic value, bullion. The first is linked to social relations, the latter mainly to war and violence. He structures his evidence of the relation between debt and money, credit and bullion, within what he sees as three historical epochs the Axial Age from 800BC to 600 AD – the Middle Ages (600 AD – 1450 AD) The Age of the Great Capitalist Empires (1450 – 1971). He ties these great eras to the different fundamental forms of money, as credit (a token representing a value) versus bullion (money embodying intrinsic value). Before the Axial age he argues that money took the credit form. This requires a social or power relation to encourage people to honour the values ascribed to the monetary form or recorded in the records.

Graeber sees the Axial Age as the age of coinage. This signals a breakdown in systems of trust and/or power. Payment must be made in something of value. Arguably, precious metal coinage did not replace barter, it was the basis of barter. Graeber claims that precious metal coinage emerged in three different locations simultaneously: the Great Plains of China, the Ganges Delta and the Aegean. The trigger in each case was war and the emergence of a different type of military. Until that point soldiers were socially based, trained to defend the honour of their community. The Axial age saw the widespread use of mercenaries who needed to be paid in a universally acceptable way. Credit money demanded community, to honour the value attached to the monetary form. Coins made of precious metal did not require such social solidarity. Graeber reports that Alexander the Great needed half a ton of silver a day to pay his imperial army.

The Middle Ages, Graeber argues, saw the decline of bullion based money and the re-emergence of credit systems. The former only reappeared with the Capitalist Age and the discovery of huge reserves of precious metal. He appears to see the latter as contingency rather than cause, as he dates the change from before the discovery of precious metal in the Americas. He also claims that while slavery was widely abolished around 600 AD it was reinvented in the Capitalist era. This first Capitalist Age ended in 1971 with the final collapse of the Gold Standard when Nixon closed the gold window in the US.

While Graeber’s ‘Cycles of History’, are open to critique and debate, they form an intriguing starting point. Are we talking about regional or global forces? Contingency or causation? Did the shift between credit and bullion drive change or did social division and war drive the change in money? A complication for seeing the ascendance of credit money or bullion as a major force for, or consequence of, social change, is the view of social theorists of money that all money is credit as Graeber himself points out. Even in the bullion led eras most people used credit instruments as precious metal was very much an elite resource. Coins were often more like tokens because the actual value of bullion based money was hard to specify, and rarely did the nominal value reflect the precious metal content.

Although parts of Graeber’s analysis debunk conventional economics about the metallist origin of money, he does argue for the political and economic importance of precious metal coinage. For Graeber, money, debt and violence go together and state power gives rise to capitalist market. He sees America’s global financial position as based on its military power. His conclusion is that ‘modern money is based on government debt, and that governments borrow money in order to finance wars `the creation of central banks represented a permanent institutionalization of that marriage between the interests of warriors and financiers’ (364).

For Graeber debt in the sense of obligation and entitlement is central to the function of society. However, traditional communities generally have some mechanism to avoid the destructive build-up of debt. Money is a mechanism representing the obligations and entitlement of individuals and groups that can take many tangible or intangible forms. Enforced payment of debt is a reflection of power that represents more harsh economic regimes, including slavery, where there is no right to repay debt (buy freedom). Graeber sees the many peasant revolts as based on the repudiation of debt. Following his logic, the current economic breakdown and austerity is caused by the failure to forgive unpayable debts and he calls for a Jubilee to relieve people of debt slavery today including mortgages and student loans. Graeber also makes a plea for the ‘non industrious poor’.

Graeber’s final chapter tries to grapple with the post 1971 era and he comes to no concrete view of what is likely to come next as his title indicates `1971 – The Beginning of Something Yet to be Determined’. He analyses the role of banks in the creation of money as debt and points out that the major borrowers (and therefore money creators) are the highly leveraged financial sector companies. He does, however, acknowledge that his model of financial eras does not seem to hold:

If history holds true, an age of virtual money should mean a movement away from war, empire-building, slavery, and debt peonage (waged or otherwise), and toward the creation of some sort of overarching institutions, global in scale, to protect debtors. What we have seen so far is the opposite. (368).

Again, it is hard in this final chapter to draw out the threads from a plethora of observations, thoughts, evidence about the nature of banking, central banks and reserves, violence and war, the role of China, supply side economics among many others. This is a book I will return to many times as a resource, but I have serious reservations about some of the conclusions that Graeber draws such as:

Just as markets, when allowed to drift entirely free from their violent origins, invariably being to grow into something different, into networks of honor, trust, and mutual connectedness, so does the maintenance of systems of coercion constantly do the opposite: turn the products of human cooperation, creativity,, devotion, love and trust back into numbers again. (386-7)

He then goes on to speak of a communism of love.

This should, however, not detract from the many acute observations Graeber makes on a vast range of material. I think it is important that Marxists read this book, not for its conclusions, but for its challenge to both conventional and Marxian economics to widen their knowledge of the role of money and debt in human societies and economies.

1 December 2013


  1. This is an interesting review. Graeber’s book is highly important book. However, I believe Mellor gives the impression that the book is more daunting than it is. I am teaching the book in an undergraduate class “Capitalism in Crisis.” It is an excellent read and with interesting stories and examples throughout. Most of my students are economic majors, but even the non-majors have found this a highly accessible and entertaining read.

    Mellor is correct when she suggests that it is not always clear Graeber primary thesis within each chapter. I also would agree that there are two separate themes at work that could have constituted two books (however, I am very thankful that Graeber included both). I would explain these themes a little differently than Mellor has in her review (although I am not necessarily disagreeing with her here).

    Graeber is actually doing three things, all of which are ontologically symbiotic. First, Graeber is constructing an immanent critique of several theories of the historical emergence of money. Second, Graeber is attempting to provide a historical account of money. Third, Graeber is attempting to suggest the mainstream version of money and debt fail to understand the full constitution or ontology of money.

    In regarding the third theme: within the mainstream, money is: (1) Medium of Exchange, (2) Unit of Account, and (3) Store of Value. At the very least this definition of money fails to understand (4) money as a social relation; but money is also (5) a power relation, and the power relation is often one of (6) violence and (quasi-)debt peonage/slavery.

    These aspects of money are very difficult to “see” in money’s modern form. However, the history of money certainly demonstrates a very close connection, and helps reveal that necessarily these aspects of money still prevail in very important ways.

    Now, Graeber does not offer any single definition of money or debt. He establishes there is a historical and ontological connection; most important his book suggests a full definition and understanding of money and debt has yet to be written.

    Instead the conventional definition of money is reductionists, in that it is reduced to the three functions of money. And debt is understood as a benign modern extension (Marx was probably the first theorist to understand that debt is not a modern extension, nor is debt benign in its modern manifestation). The reduction of money merely to its function is to misunderstand it; and debt is hardly a modern extension, but instead the origin of money (not the other way around). Further to understand how debt functions as a social relation, power relation, its connection with debt-peonage, exploitation, macroeconomic instability, and violence is simultaneously to extend our understand modern money and modern socio-economic problems (and to support Marx’s understanding of debt and money as a power relation).

    Graeber provides us the historical clues. It will be up to political economists and social theorists to learn from these lessons (which may very much connect to Mellor’s points about feeling “almost overwhelmed.” But readers need not feel this while reading Graeber, he is a very good and entertaining writer).

    Now as to the historical emergence of money and the immanent critiques of prevailing theories. It is interesting to me that Mellor is more comfortable here than in the accounts of money and debt. For I believe that Graeber’s immanent critiques of “double coincidence of wants”, “state theory” and “primordial theory of debt” are exaggerated. His critiques of these theories are not as fatal has Graeber suggests in the book. Graeber is certainly correct to underscore that none of these theories can exhaustively explain the emergence of debt and money, however, almost for certain each has been at work in each historical emergence of debt and money.

    My own conclusion here is that we need to be far more eclectic in our understanding of the historical emergence of debt and money. Sometimes the need for a means of payment or medium of exchange is strongly at work, sometimes the state, sometimes other state-power relations, sometimes exploitation of a population, sometimes primordial feelings of existential debt and cosmic guilt. But generally it is probably a combination of several things at once, depending on the particular society being historically analyzed. To employ Althusser’s excellent term (usurped from Freud), the historical emergence of debt and money is overdetermined.

    Graeber says at a minimum we need to understand societies as necessarily built on what he calls Base Communism (roughly, the minimum altruism in any society or social relations), moreover he claims all societies are Hierarchical, and all societies have Modes of Exchange. This simple insight has very important implications for our understanding of debt and money. Namely the altruism, hierarchies, and modes of exchange, will determine how debt and money function as a social relation, power relation, how they exploit, and to the degree there is debt peonage and violence.

    Finally, Mellor concludes: “I think it is important that Marxists read this book, not for its conclusions, but for its challenge to both conventional and Marxian economics to widen their knowledge of the role of money and debt in human societies and economies.” I believe I would agree with this. However, it depends on what Mellor means by “challenge” to Marxian economics. I believe Graeber’s immanent critiques to be highly consistent with endogenous theories of money in the Marxian, Post-Keynesian and Institutionalist political economy traditions. I would contend that Graeber’s account is a compliment to, rather than a “challenge” of, Marxian theories of money from such theorists such as for example Duncan Foley, Michal Aglietta, and Alain Lipietz.

  2. Professor Despain writes:
    In regarding the third theme: within the mainstream, money is: (1) Medium of Exchange, (2) Unit of Account, and (3) Store of Value. At the very least this definition of money fails to understand (4) money as a social relation; but money is also (5) a power relation, and the power relation is often one of (6) violence and (quasi-)debt peonage/slavery.

    But with respect to Professor Despain who knows the works of Marx much better than I do,
    I would say that everything in the quote I give above, of his comment, is precisely and elaborately addressed by Marx in numerous works, but especially in Volume 1 of Capital.

  3. Sydney,

    You have a point here. However, it is open to interpretation. Marx does not have the specific details of the historical correlation between money and violence/slavery. But it does seem to me that money is the essence of Marx’s theories of surplus-value and exploitation (which are at bottom both based a social relation and power relation). The organization of Capital volume one is important here. Commodity – Exchange – Money.

    The role of money in Marx’s political economy has been underappreciated. But frankly, it seems to me to be underdeveloped in Marx (in Part I of Capital). Crucial, but underdeveloped. Thus, certainly Marx asserts the presence of money/credit is the basis of an overproduction economic crisis. Moreover, Marx asserts money is a social relation that has social-powers – but money is held and controlled privately. Thus, the social-powers of money become private powers.

    In Part II of Capital, Marx articulates the transformation of money into capital. Specifically how social resources are transformed into commodity/capital to generate private wealth. Certainly, this process of “transformation” (from money to capital) is a power-relation.

    Thus, it does seem to me that what follows in Capital, i.e. the theories of surplus-value, exploitation, class struggles, economic crises, etc., is based on the commodification of money/credit and the social powers of money/credit as they evolve in capitalism.

    However, Graeber is not drawing his inspiration from Marx. It just so happens that Graeber immanent critiques and historical analysis is complimentary to (particular interpretations of) Marx.

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