Debt: The Next 500 Posts …

by Henry Farrell on September 26, 2012

A coda to the coda – Mike Beggs’ [piece]( on Graeber’s Debt in _Jacobin_, and the ensuing discussion in comments [here]( at CT, has given rise to a further exchange in which J.W. [Mason]( defends Graeber on money, and Mike [Beggs]( restates and extends his position.


> Mike sees _Debt_ as “a move in an interdisciplinary struggle: anthropology against economics.” But most of the key arguments of Debt are better seen as part of an intradisciplinary struggle within economics. Admittedly it takes some unpacking, but Debt‘s key themes are in close harmony with the main themes of heterodox economics work going back to Keynes; while the “economics” that Beggs opposes to him represents only the discipline’s more conservative wings. … Debt‘s demonstration that money obligations are historically prior exchange of goods maps onto the insistence of Marx, Keynes and their successors that under capitalism, money values are logically prior to the production and consumption of real goods and services. … Debt‘s distinction between money and credit systems is not just an exercise in classification, but corresponds to a distinction that has has preoccupied many classical and modern economists, and has important implications for monetary policy in addition to the vaster cultural and political-economic ramifications Debt focuses on. … when Mike says that Debt exaggerates the importance of the system of payments, it is because he is coming from a narrowly orthodox view of what monetary economics is about, and why money matters. If your economic vision is shaped by more heterodox traditions — or by the responses to the financial crises of the past few years — the economics of Debt will seem more congenial.


> The debate between Josh and I centers on the question of whether or not the distinction between a ‘commodity/fiat money economy’ and a ‘credit money economy’ is a useful one in understanding our present economic system and its history. He thinks it is so useful as to be the central dividing line in economics; I think it is liable to mislead. The rest of the disagreement comes, I think, because Josh conflates the commodity/fiat-credit money economy divide with other divides in economic thinking. So he seems to that if I challenge that distinction, I must be a quantity theorist, must believe that money is simply a veil, neutral in its economic effects, and must misunderstand how banking works. In fact we are on the same side in all those other dichotomies, but Josh for some reason continues to maintain that if I disagree over the core distinction, I must be standing on the other side of all the others. … I think the ‘commodity/fiat money economy’ – ‘credit money economy’ divide is a problem; and … that the rest of his criticisms rest on the conflations with other theoretical dichotomies.



Sandwichman 09.26.12 at 7:39 pm

Regarding the interdisciplinary struggle between anthropology and economics:
“How not to go about understanding peasant societies…” (or any society for that matter)


LFC 09.26.12 at 8:02 pm

“the debate between Josh and I [sic]…”

This is one fairly common mistake that bothers me. I will never get used to it, no matter how widespread it becomes.


JW Mason 09.26.12 at 8:47 pm

Thanks for linking to this, Henry.

I’m working on a reply to Mike now (talk about the next 500 posts!) but there are two main issues with his response, from my pov.

First, I think a lot of what’s behind the polarization of responses to Debt — certainly a big part of the difference between Mike’s and mine — is about the boundaries of the political. Mike, like many people who respond negatively to the book, is against a kind of left politics that assigns to large a role to political choice, both in terms of explaining the state of the world as it is (e.g. the dollar standard as a kind of tribute system) and in terms of political change (i.e. voluntarism). From this point of view Graeber is basically one more in the long line of utopian monetary reformers and cranks, with their idea that there is some special trick that can bypass normal political constraints. And the association of monetary obsessions with a voluntarist view of politics is certainly real — there’s a reason so many conspiracy theorists love talking about the Fed. Basically, Mike sees Graeber as part of an intellectual tendency that sees everything that happens in the world as a set of choices by elites and downplays the real economic constraints on politics and policy.

The other point of view, which is where I’m coming from, is that the sphere of political choice is too small in conversations today, and “objective” constraints are exaggerated. I think our problem today is not excessive voluntarism, but excessive fatalism. I’m less worried about people overestimating what can be done by monetary reform, than about people treating political economy as if it were a law of nature. So even the stuff in Graeber that is problematic (the last chapter mainly) doesn’t bother me that much, while I really like the way the book de-naturalizes the economy and opens up the space of social possibilities.

Second, just in terms of the specific misreadings of his review he accuses me of: I wasn’t criticizing what he thinks, I was criticizing what he wrote. I don’t doubt that in other contexts Mike would not endorse the quantity theory of money, say, but he clearly did so in this review. I bring this up not just as a gotcha but because I think it’s a real problem that irritation with Graeber has provoked Mike into taking orthodox positions, and defending the existing practice of economics, much more than he normally would. And not just him.


JW Mason 09.26.12 at 8:54 pm

I should add — in terms of the basic political difference I sketched out, it’s not that Mike’s position is wrong and mine is right. (His is probably the more authentically “marxist” position, for whatever that’s worth.) It all depends on the conversation you’re taking part in. I think that among the people Debt and The Jacobin are talking to, politics now is suffering from a deficit of utopian visions; in other times and places I’d be on Mike’s side.

And then the other point is that there’s lots of good economics in Debt, if your tastes run toward heterodoxy at all. But I can’t make that case any better than I did in the initial piece.


Metatone 09.26.12 at 9:40 pm

@JW Mason – The Yorkshire Ranter has a good post at the moment relating to fatalism in economics. I think I’m in the same camp as you, the pendulum has swung too far to fatalism…


William Timberman 09.26.12 at 9:57 pm

I wouldn’t call it fatalism, but I would call it acquiescence in a system of artificially limited options. And I’m very grateful for Graeber’s Debt, for much the same reasons JWM lists here. I’m also grateful for folks in Greece and Spain, who are willing, at far greater cost to themselves and others than I’ve ever had to pay, to demonstrate that the limited options being presented to them are unacceptable. We have to endure the consequences of earthquakes and hurricanes without demanding an accounting from God or Nature; we do not have to endure the oh-so-logical consequences of a neoliberal world order without demanding an accounting from people who represent neither of those two first principles, despite what they may believe. Après nous le déluge is not a justification any of the victimized is obliged to accept without question.


OPINIONATED DAVID GRAEBER 09.26.12 at 11:21 pm



JW Mason 09.27.12 at 6:09 am

The Yorkshire Ranter has a good post at the moment relating to fatalism in economics.

That’s a good post, thanks for pointing it out.


rootless_e 09.27.12 at 12:49 pm

Beggs is not alone in his essentially libertarian/neoclassical argument – much of the “left” seems to have completely absorbed right wing economics/politics.

The passage on chartalism in Beggs critique is revealing, because it simply restates the neoclassical postulate that countless private pricing decisions dominate value determination. That is both empirically incorrect and a political argument which carries the right wing demand to accept economic relations as determined by an immutable design.


Alex 09.27.12 at 12:57 pm

It’s an interesting point that once you swallow the chartalist/MMT red pill, where the value of money is finally that it’s what you can pay tax in, the whole doctrine that trade is always voluntary goes down the tube.


rootless_e 09.27.12 at 1:38 pm

of course trade is not always voluntary, even if you do not accept chartalism/mmt.


Walt 09.27.12 at 1:51 pm

Despite being critical of Graeber in the CT discussion of Debt, I thought that Mike Beggs’ article was completely wrong-headed. I’m glad you’re taking the time to take it on, JW.


N. Pepperell 09.27.12 at 6:36 pm

On this: “Mike, like many people who respond negatively to the book, is against a kind of left politics that assigns to large a role to political choice, both in terms of explaining the state of the world as it is (e.g. the dollar standard as a kind of tribute system) and in terms of political change (i.e. voluntarism)….

The other point of view, which is where I’m coming from, is that the sphere of political choice is too small in conversations today, and “objective” constraints are exaggerated.”

These are not exactly the only options: it’s entirely possible to agree that mainstream analysis overstates the “objectivity” of social and economic constraints, but also to think that understanding possibilities for transformation requires us also to understand the role played by unintended consequences of collective practices, as well as the consequences of conscious political choices. It’s not necessary to choose one to the exclusion of the other. It is, however, possible to argue that conscious political choices can be derailed by an inadequate understanding of capitalism, as a complex, multifaceted system characterised by contradictory internal tendencies: I hear Mike’s argument coming more from this perspective, than from the positions you’re attributing to him above.

I also, for what it’s worth, believe you’re misreading him when you try to draw the contrast between “what he thinks” and “what he says”: I have access to the same words – and only those words, as I haven’t had any other interactions with Mike about these issues – but don’t draw the same conclusions as you do about his views on the quantity theory of money. Perhaps this comes down to the different resonances of vocabulary in different intellectual spaces, but I can’t hear in the various passages you quote when responding to his piece, the meanings you claim to find there.


Austin G. Mackell 09.30.12 at 10:59 pm

I just want to say that the debate here has beeen a great window for me into the broader debates about these issues, which I am only just beggining to properly explore, but which seem to me to be among the most fruitful directions for leftist thought to pursue. I think (and forgive me if I missed it) the work of Steve Keen could have been a useful reference point. He kind of fills what one of the authors (who can keep track?) called the “economics sized hole” in Graeber’s theory. His work, however, goes only part way to fill the “economics sized hole” in left wing thought more generally. It is great to see here and on Jacobin that people are thinking big and hard about economics again, and doing so with a view to social change.

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