The Quest | The Free Press of Reed College

David Graeber on Debt as a Social Construct

The chapel was full to bursting with people who came to hear David Graeber, anarchist and anthropologist, author of “Debt, the First 5000 Years,” attack fundamental assumptions about capitalism and debt talk last Tuesday.

Graeber asserted that the morality of paying back debt is socially contrived. He suggested that a natural economic system would favor mutual aid arrangements, where debt was abstracted into reciprocal gift giving without strings attached. According to Graeber, the rule of “equivalent payment” comes from “angry, violent societies,” as violence forces people to pay back debt, even when paying back that debt no longer serves the good of the community. Graeber claimed that physical money originates in debt, and used the soldier as and example of a product of violent societies and of an occupation that can’t be made worthwhile by gift exchange.

Not only did Graeber say that morality was contrived, but that it was twisted by money. The payment of debts is a moral action, said Graeber, but the moneylender is almost universally an evil character. A Buddhist teaching, for example, says that if one doesn’t pay debts, they’ll be reincarnated as chattel of the one you owed. At the same time, if the moneylender is too harsh with the debtor, the moneylender will be reincarnated as an ox. In this case, Graeber says “both sides of the relationship are tainted.” He also mentioned etymological connections with debt, sin, and guilt in Germanic and Aramaic languages, as well as Sanskrit.

Negative associations with debt may be as old as time, but Graeber’s ideas honed in on timely issues as well. He mentioned that the founding fathers feared democracy because they were sure that the majority would immediately vote for a cancelation of debts. Historically, many revolutions included cancelation of debt as part of their manifestos, and many governments worked to make money, and thus debt, tangible so that it would be harder to cancel.

Graeber’s anarchist ideology was clearly behind many of his statements, but he backed them up with evidence. He claimed that modern societies in Madagascar as well as Barcelona managed to function without governments for some time. Graeber also related an anecdote from his early involvement in the anarchist movement. He saw a headline that read “Martial Law Declared in Seattle” because of the 1999 World Trade Organization Protests. In the wake of the Occupy movement, the suggestion that a headline like that could be found in a newspaper was a wakeup call.

Graeber’s proposed solutions to modern problems were met with some skepticism, but while the audience had concerns, most members were optimistic. Graeber claimed that debt-laden countries like Greece’s only realistic option is refusing to pay their debts outright. If the money that had bailed out banks had instead bailed out mortgage holders, said Graeber, the banks would have received payments and many people would have been able to keep their houses. The IMF and similar organizations really needed to “prove to us why they should actually exist,” Graeber said. According to Graeber, the people who make money off of economics had an “ideological investment in making capitalism the only option,” and to defeat that we need to “reset not just the economic system, but our minds.” He also proposed that democracy needs to be “reinvented,” to be rid of the “mode of sectarian argument that comes from academia,” which aims only to defeat the opposing argument. Instead, Graeber suggested consensus based decision making, which he had seen succeed both in anarchist groups and in a community that he studied in Madagascar.

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