David Graeber on Debt and Money, Part 2

I have written a review of some of the more interesting parts of David Graeber’s Debt: The First 5,000 Years (Brooklyn, N.Y., 2011) in this post:

“David Graeber on the Origins of Money,” January 23, 2012.

I will continue here with some further points of interest:

(1) The neoclassical economics profession’s obsession with barter stems from the belief that money is a neutral veil and that economies can be modelled as barter systems (Graeber 2011: 44–45).

(2) On pp. 46–52 of Debt: The First 5,000 Years, Graeber reviews the credit theory of money and chartalism. Mitchell Innes made the point that money units are abstract units of measurement, and that such units can emerge before concrete tokens of exchange. The use of debts as a medium of exchange and means of payment is an important element of the story of money. The origin of money in Mesopotamia appears to demonstrate how a unit of account can emerge in a way other than the barter spot trade. The silver unit of account was developed in the temples, and it is in fact interesting how cattle, gold and silver, objects emerging as money in many societies, are also high prestige objects that were offered to the gods (Graeber 2011: 59).

(3) Graeber refers to Primordial Debt Theory, advanced by Michel Aglietta, Andre Orléans, and Bruno Thére (Graeber 2011: 55), although in the end dismisses their theory as another myth (Graeber 2011: 62). The Primordial Debt Theorists take up the thesis of Grierson (1977 and 1978), and emphasise the role of wergild-like social practices, penalties and fines in the emergence of money. In gift exchange economies, it is difficult to imagine how a system of commodity equivalences or calculating relative values arises, but when fines and compensations need to be paid, this is actually when people demand precise and exact compensation in terms of goods lost and goods deemed to be equivalent.

(4) In societies where there exist what we might call “primitive” money, such as shell money in the Americas or Papua New Guinea, cattle money in Africa, bead money, feather money, and so on, these monies are often used exclusively in social interactions like arranging marriages, establishing paternity of children, compensation, or consoling mourners over the dead (Graeber 2011: 60; 130), not for exchanging everyday items and sometimes not even for buying or selling anything at all (Graeber 2011: 130). Such monies are called “social currencies” by Graeber (2011: 130).

Graber makes the following observation:

“One of the puzzling things about all the theories about the origins of money that we’ve been looking at so far is that they almost completely ignore the evidence of anthropology. Anthropologists do have a great deal of knowledge of how economies within stateless societies actually worked—how they still work in places where states and markets have been unable to completely break up existing ways of doing things. There are innumerable studies of, say, the use of cattle as money in eastern or southern Africa, of shell money in the Americas (wampum being the most famous example) or Papua New Guinea, bead money, feather money, the use of iron rings, cowries, spondylus shells, brass rods, or woodpecker scalps. The reason that this literature tends to be ignored by economists is simple: ‘primitive currencies’ of this sort is only rarely used to buy and sell things, and even when they are, never primarily everyday items such as chickens or eggs or shoes or potatoes. Rather than being employed to acquire things, they are mainly used to rearrange relations between people. Above all, to arrange marriages and to settle disputes, particularly those arising from murders or personal injury.” (Graeber 2011: 61).

BIBLIOGRAPHY

Graeber, David. 2011. Debt: The First 5,000 Years, Melville House, Brooklyn, N.Y.

Grierson, P. 1977. The Origins of Money, Athlone Press and University of London, London.

Grierson, P. 1978. “The Origins of Money,” Research in Economic Anthropology 1: 1–35.