From the monthly archives:

February 2012

Seminar on David Graeber’s Debt – admin notice

by Chris Bertram on February 28, 2012

We’ve now received and published all the contributions in our online seminar on David Graeber’s _Debt: The First 5000 Years_ . For those wanting a handy index the posts are:

Chris Bertram, “Introduction”:
John Quiggin, “The unmourned death of the double coincidence”:
Henry Farrell: “The world economy is not a tribute system”:
Barry Finger “Debt jubilee or global deleveraging”:
John Quiggin (slight return): “The end of debt”:
Neville Morley: “The return of grand narrative in the human sciences”:
Malcolm Harris: “The dangers of pricing the infinite”:
Daniel Davies “Too big to fail: the first 5000 years”:
Lou Brown: “Good to think with”:
Richard Ashcroft: “Money out of place: ‘debt’ and incentives”:
Rob Horning: “Debt on the 12th planet”:

Stay tuned, as we’re hoping that David Graeber will be able to write a response to some of this soon, but that won’t happen for at least a week or so.

Debt on the 12th Planet

by Rob Horning on February 28, 2012

In his 1976 book The Twelfth Planet, independent scholar Zecharia Sitchin drew on his heterodox studies of archeology, biology, anthropology, and ancient Sumerian to put forward the thesis that an alien race from the planet Nibiru came to earth thousands of years ago and enslaved the human species and forced them to mine precious metals, instilling in our ancestors a religious respect for metallurgy and an insatiable love for gold. As I remember it from Sitchin’s appearances on the Art Bell show in the 1990s, the original political hierarchies in ancient times derived from the appointed intermediaries to the Nibiru people (known in various human mythologies as the Nephilim or the Annunaki); these became the earliest human kings, with access to supernatural power that justified their rule, the purpose of which was essentially to expedite the greatest amount of precious metal extraction possible.
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Money out of place? “Debt” and Incentives

by Richard Ashcroft on February 26, 2012

My interest in David Graeber’s extraordinary book “Debt: The First 5, 000 Years” stems from my work on incentives in healthcare. I don’t have much to say about debt and political economy. On these matters I am an ordinary citizen-punter and the most sophistication I can muster is to parrot John Lanchester’s better lines. But I know a little bit about incentives, and here I want to say a few things about the connections.

The current debate about incentives in healthcare can be split in half. One half concerns the use of incentives to motivate professionals and institutions to provide better, or different, care and services to patients and clients, citizens and customers. This is a very important debate, with roots in Adam Smith’s suspicion of professions as conspiracies against the public, the public choice theorists’ suspicion of regulation by rule-making, and the management consultant’s belief that people’s behaviour at work is driven principally by the available rewards.
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Good to Think With

by Lou Brown on February 26, 2012

On a recent edition of the public radio show “The Story” (air date February 21, 2012), the interviewee, Kenan Trebincevic, a Bosnian Muslim, describes the relationship his family had with a neighbor woman, Petra, a Bosnian Serb. Muslims were being rounded up and placed in concentration camps, and Trebincevic’s family lived in fear. Petra would stop by for a visit, commenting to Trebincevic’s mother, “I like your rug,” or “That’s a pretty dress.” She would then invite the mother over for coffee, all the while talking about how nice the rug would look in her apartment or how good the dress would look on her. Within a context where Petra was known to have betrayed other Muslim residents to patrolling soldiers, Trebincevic says Petra’s message was very clear: “Either agree with what I’m asking you to do, or I’m going to turn you in.” His mother would dutifully fold up her rug or her dress or whatever other possession Petra had tacitly demanded, and give it to her neighbor when she went for coffee. This is an example of a type of relationship David Graeber describes as constitutive of a human economy, an economy “concerned not with the accumulation of wealth, but with the creation, destruction, and rearranging of human beings” (p. 130). In this case, Petra is demonstrating that Trebincevic’s mother owes her a debt that can never really be repaid. The mother must continue to make payments, with both parties fully aware that no payment will ever be enough to match the value of the original “gift”, the lives of Trebincevic’s father and older brother. This story also resonates with another of Graeber’s key points, the role of violence in the creation of a system in which human lives can be thought of as objects of exchange. [click to continue…]

RA Unionization in Michigan: The Empire Strikes Back

by Henry Farrell on February 26, 2012

This isn’t funny at all – the Republican state legislature in Michigan is trying to forestall a vote on RA unionization at the University of Michigan by passing legislation declaring that RAs are not public employees, and hence have no right to organize. A Senate bill was “introduced”: on February 17 and “swiftly passed”: It is now before the Michigan House.

bq. Introduced by state Senate Majority Leader Randy Richardville (R–Monroe), the legislation will restrict graduate students from achieving status as public employees, thereby preventing them from claiming collective bargaining rights and obtaining representation from a union. Yesterday’s vote comes just one day after it had passed through the Senate Government Operations Committee, and the bill will now move on to the state House of Representatives. The vote also comes on the heels of an emergency meeting by the University’s Board of Regents to pass a resolution in opposition to the bill. The regents voted 6-2, along party lines, to approve the resolution and instructed Cynthia Wilbanks, the University’s vice president of governmental affairs, to garner support among state legislators to vote against the bill. Bob McCann, communications director for Senate Minority Leader Gretchen Whitmer (D–East Lansing), said Senate Republicans approved the bill so quickly — it was introduced last week — to avoid interference from negative public feedback.

The negative public feedback bit is where you come in. I don’t know how many CT readers are Michigan residents – I strongly encourage those who are to contact their state level representatives, whether Democratic or Republican, politely but firmly telling them what a horrible idea this is. I’d also be grateful if those who have useful information (i.e. relevant email addresses of political figures) or other helpful suggestions could leave them in comments. Time is of the essence; I also get the impression, perhaps mistaken, that graduate student union have only very limited resources to fight this kind of fight (they don’t have the direct political connections to local policy makers that other collective actors have. So please do what you can, and spread the word.

Update – Patrick O’Mahen supplies some useful phone numbers in comments.

Mark Ouimet District 52 (517) 373-0828
Rick Olsen District 55 (888) 345-2849
Pat Somerville District 23 (517) 373-0855
Nancy Jenkins District 55 (855) 292-0002
Kevin Cotter District 99 (517) 373-1789

Jase Bolger is the Speaker of the House and is always useful to bother on these issues (as he’s a veto point and all): (517) 373-1787

Finally, governor Rick Snyder can be reached at (517) 373-3400.

Too Big To Fail: The First 5000 Years

by Daniel on February 25, 2012

One of the many fascinating pieces of information that David Graeber tosses off like shrapnel in Debt is that the first recorded appearance of the word “freedom” in a political document is in a Sumerian proclamation of a debt amnesty or jubilee.

What interested me, however, from the point of view of a professional banker, is that the document in question provided only for the discharge of personal debts of the Sumerians; commercial debts of merchants were not discharged. Clearly (and I suppose there is an interesting anthropological history to be written of the extent to which the appropriate level of cynicism about these things as changed from pre-Christian Mesopotamia to modern London), anyone who could have convinced the Babylonian legal system that his liabilities were all personal debts covered by the jubilee, while his assets were all mercantile trade credits, would have made out like a bandit. The point I am trying to make here is that as well as being the first mention of the word “freedom”, this proclamation marks the first recorded instance of a regulator-sanctioned selective default. Then a lot of things happened including the Fall of Rome and the Beatles, and then we had the FDIC’s decision in 2009 to transfer the assets and deposits of Washington Mutual to JP Morgan Chase over a weekend, leaving holding company creditors exposed to an extravagantly bankrupt shell. So from the start to the beginning of the story of debt, it has always mattered whether or not you were on the right side of what the relevant regulator wanted to accomplish.
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Occam’s Phaser?

by John Holbo on February 25, 2012

I’m rereading Nozick’s Anarchy, State and Utopia because I got to thinking: what’s wrong with good old fashioned ‘force and fraud’ anyway? Isn’t the Night Watchman state just creeping Soft Tyranny, in Tocqueville’s sense? Plus it’s obviously a moral hazard and generally destructive to private virtue.

So Nozick seemed like relevant reading. Some unsystematic liveblogging:

First, Nozick is amusingly harsh, in passing, to fellow libertarians.

Since many of the people who take a similar position are narrow and rigid, and filled, paradoxically, with resentment at other freer ways of being, my now having natural responses which fit the theory puts me in some bad company.

The next time someone tells you that Corey Robin is paranoid, just explain to them that actually you are an orthodox Nozickian about these things.

Next, this classic bit:

One form of philosophical activity feels like pushing and shoving things to fit into some fixed perimeter of specified shape. All those things are lying out there, and they must be fit in. You push and shove the material into the rigid area getting it into the boundary on one side, and it bulges out on another. You run around and press in the protruding bulge, producing yet another in another place. So you push and shove and clip off corners from the things so they’ll fit and you press in until finally almost everything sits unstably more or less in there; what doesn’t gets heaved far away so that it won’t be noticed.

This is true!

Next, he spends a great deal of time answering my question. 150 pages. Why have even a minimal state that secures everyone against force and fraud? I know now that his answer is … really quite complicated and ultimately not altogether clear, despite the fact that Nozick is generally a clear writer. I’m not convinced Nozick really has any right, by his lights, to a full-fledged Night Watchman state. Something more minimal would be more respectful of the individual rights that we are, supposedly, respecting at all costs, seems to me.

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Golden Fetters

by Henry Farrell on February 24, 2012

From David Marsh’s “book on the origins of the euro”:, some indication that the last few years of gold standard lunacy were baked into the cake from quite early on.

bq. The two leaders [Giscard d’Estaing and Helmut Schmidt] professed the common aim, at a wider European level that superseded national borders, to regain monetary stability forfeited through a century of war and disruption. According to Giscard, the road to a European money was part of a journey that had been abandoned when the Gold Standard ended:’During the second half of the nineteenth century, up to the 1914 war, France enjoyed continuously successful economic growth, and a steady build-up of its engineering industry, with a currency that was totally stable. With their roots in a rural economy and their cultural leaning towards the fundamental values of savings and thrift, the French as a nation cannot cope with an inflationary economy and a weak currency. They thrive on stable money.’ Schmidt, too, affirmed a link between the goal of EMU and the Gold Standard:’We had a currency union up to 1914 in Western Europe – the Gold Standard. From a historical point of view, I would draw a direct parallel.’ (p.69)

The Dangers of Pricing the Infinite

by malcolmpharris on February 23, 2012

“The notion of infinite debt comes in when this logic slams up against the Absolute, or, one might perhaps better say, against something that utterly defies the logic of exchange. Because there are things that do. This would explain, for instance, the odd urge to first quantify the exact amount of milk one has absorbed at one’s mother’s breast, and then to say that there is no conceivable way to repay it.”
– David Graeber, Debt

“Could all of this be thought ‘a normal upbringing’? Everyone seemed to think so and my parents, bless them, paid for it. So much that my father proudly presented me with a complete set of receipts on my twenty-first.”
– Derek Jarman, At Your Own Risk

It’s worth stating from the outset that this seminar and the rest of the deserved attention this book has received in all likelihood would not have occurred if we weren’t in a sequence of global debt crisis. David’s status as an “out” anarchist and the role that alignment plays in his theory and practice would most likely have (continued to) exclude his ideas from these kinds of forums under more stable circumstances. But these are not more stable circumstances. For that reason I want to leave the scholarly refutation to the scholars, and put the book to work.

In April of last year I wrote an article for N+1 on the astronomic growth of student debt in America since the 70s. At the time, student loans had just passed credit cards as the largest source of consumer debt at $800 billion. Less than a year later, the total has topped $1 trillion with no real signs of slowing, while the other measures I referenced, including youth unemployment, have increased to new record levels as well. The conclusion that “the most indebted generation in history is without the dependable jobs it needs to escape debt” is more valid than ever.
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The Return of Grand Narrative in the Human Sciences

by Neville Morley on February 22, 2012

David Graeber’s Debt is, in the most positive sense, rather an old-fashioned book, in its conception and approach if not in its matey and approachable style.  It ignores disciplinary boundaries within the human sciences, especially those between economics, history and social studies, in a manner that recalls polymaths like Max Weber or the free-wheeling early years of political economy with figures like Smith and Malthus.  In its search for the connecting thread between an astonishing diversity of cultural practices and texts from across time and space, it resembles the early classics of speculative anthropology – not Malinowski but J.G. Frazer.  In its ambition to offer an account of the trajectory of the whole of human history, it undoubtedly runs the risk of being confused with the likes of Jared Diamond or Niall Ferguson, but it strikes me rather as in the vein of Arnold Toynbee, not least in the weight of scholarship that underpins this work of imaginative reconstruction. I feel the need to stress again that I don’t offer these comparisons as a criticism…

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The end of debt?

by John Q on February 22, 2012

In ordinary language, a debt is a morally and legally binding obligation to (re)pay somebody. But that’s not the only commonly-used definition of debt. In corporate finance, “debt” refers to a class of securities with a fixed interest payments, senior to equity in claims on assets. Until late C20, this description carried with it much of the freight associated with the ordinary definition – failure to repay debt would involve the end of the corporation as a legal person, so any honest and prudent corporate manager sought to avoid this, and to keep a good credit rating. That all changed with junk bonds and Chapter 11 – corporations now routinely restructure, to wipe out debt (particularly debt owed to employees).

Then there’s sovereign debt, which has always been a special category. Historically, loans to sovereigns debt were more like the reciprocal obligations described by Graeber than like the debts owed by subjects to sovereigns. If you lent to a king (your own, or a foreigner) you gained favor, and hoped to be well paid, but couldn’t do much about it. That attitude extended more generally to aristocratic debtors (exemplified by Becky Sharp and Rawdon Crawley in Vanity Fair).

What happens when this view of debt becomes more general As I’ve written previously, current trends imply that most Americans will sooner or later go bankrupt, and of course millions more have defaulted on mortgages in the current crisis. For most of those involved, this event has been catastrophic, and has carried with it a burden of shame and guilt. But, as with divorce, it’s hard to maintain a moral stigma for a life-event that is so commonplace (the fact that bankruptcy is private, while divorce is public, cuts both ways here).

I don’t have an answer on this, only a question. If everyone treated debt as a financial instrument, to be managed in whatever way suited them, how would/will society and the economy change?

Debt Jubilee or Global Deleveraging?

by Barry Finger on February 22, 2012

Fifty years ago, another ambitious examination of historical development was published. This too drew abundantly from “economists, economic historians, ethnologists, anthropologists, sociologists and psychologists” in order to elucidate patterns of social existence and institutional evolution. This too promised to locate in the remote past of humanity, experiences that have “penetrated into unconsciousness of individuals, there to encounter the echoes from the primitive-communist past, which have never been completely buried by the effects of 7000 years of exploitation of man by man.” This too argued, in effect, that a lost social consciousness would be key to the reassertion of a future freed from economic oppression. David Graeber asserts that communism is in fact one of the basis for all human societies. But, while Ernest Mandel’s Marxist Economic Theory was written in the context of a cold war in which the fundamental question of social organization was ever present, David begins his quest 2000 years beyond the mist (and myth) enveloped origins of ancient communalism to the beginnings of society already differentiated by class and social function. The current social context is one permeated by a crushing global financial collapse, where – unlike Mandel’s time — the fundamental questions of the class organization of society no longer present themselves as urgent political propositions.
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The world economy is not a tribute system

by Henry Farrell on February 22, 2012

In a blogpost in July of last year, David Graeber talked about why he wrote _Debt_.

bq. But in a way, Keith had it exactly right. The aim of the book was, indeed, to write the sort of book people don’t write any more: a big book, asking big questions, meant to be read widely and spark public debate, but at the same time, without any sacrifice of scholarly rigor. History will judge whether it’s still possible to pull this sort of thing off (let alone whether I’m the person who will be able to do it.)

He further advised that writers of such books should:

bq. back up your statements with extensive, detailed references that actually do say what you think they say. Good scholarship is more appreciated by popular audiences than academic ones. This is a bit scandalous but I have found it to be true. I have about 100 pages of notes and bibliography in the book and non-academics commenting on the book rarely fail to note, approvingly, that I don’t ask anyone to take my word for what I say, but back up all my claims with numerous references. Some show signs of actually having checked a few to make sure I was on the level. It’s an interesting comment on academia that we almost never do this.

There’s a lot to like about _Debt_, but I don’t think that it delivers on this promise (or, at least, not on the scholarly rigor bit). Much of the specific historical discussion in the book is beyond my pay grade – while I’m interested in the discussion, and enjoyed Graeber’s reconceptualization, I can’t say that much about it. Hence, this response will focus on the stuff that I do know a little more about – today’s international political economy, and the relationship between money and military force within it.

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The unmourned death of the double coincidence

by John Q on February 22, 2012

Jumping in first, I want to recommend Debt: The First 5000 Years as a book that ought to interest just about everyone interested in the way societies are organized. I learned a lot from it, well beyond the core point about the centrality of debt. I haven’t managed to collect my thoughts into a coherent response, so I’m just going to put one or two of them up for discussion, and read the other posts with interest

My first observation is that while economists are the target of quite a few well-armed barbs in Graeber’s book, his message is one that will actually make economics a bit easier to do, by ridding us of the need to treat money as a medium of exchange, designed to overcome the problem that barter requires “a double coincidence of wants”

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David Graeber’s Debt: The First 5000 Years begins with a conversation in a London churchyard about debt and morality and takes us all the way from ancient Sumeria, through Roman slavery, the vast empires of the “Axial age”, medieval monasteries, New World conquest and slavery to the 2008 financial collapse. The breadth of material Graeber covers is extraordinarily impressive and, though anchored in the perspective of social anthropology, he also draws on economics and finance, law, history, classics, sociology and the history of ideas. I’m guessing that most of us can’t keep up and that we lack, to some degree, his erudition and multidisciplinary competence. Anyway, I do. But I hope that a Crooked Timber symposium can draw on experts and scholars from enough of these different disciplines to provide some critical perspective. My own background is in political philosophy and the history of political thought: so that naturally informs my own reactions as do my political engagements and sympathies. So mine is merely one take on some of the book’s themes.

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