Summary

Debt and money are deeply intertwined: Graeber’s sequence is IOU / lending → money, while Adam Smith’s is exchange → money → government. Markets are a side effect of armies, and across history money, market, state, and military affairs remain interconnected. Religion, redemption, hierarchy, war, conquest, and slavery turn economic claims into moral obligations.

Graeber’s three moral principles of economic relations are communism, hierarchy, and exchange. Capitalism builds on impersonal credit money, required growth, wage labor, and the belief that all money should grow. Since 1971, free-floating currency, debt imperialism, speculation, lobbying, and the financialization of life expose the central problem: an economy cannot grow forever.

“Money is as old as human thought”

“debt to society that made us”

“Capitalism cannot really operate in a world where people believe it will be around forever”

Key Takeaways

Debt and money are deeply intertwined: Graeber’s IOU / lending → money (unit); Adam Smith’s exchange → money → government.

Markets are a side effect of armies: the state enforces claims, dictates legal terms, and taxes become a “debt to society that made us.”

Debt is unequal, with the possibility of setting it straight; assessing value creates social hierarchy, while debt forgiveness drives class struggle.

War, conquest, and slavery underpin debt: slavery is social death and degradation, and trade in humans turns life into sacred tradeoff value.

History moves through cycles of credit and coinage, from Mesopotamian interest-bearing loans to Egyptian taxes and China’s many forms of money.

Since 1971, financialization of life has combined free-floating currency, debt imperialism, speculation, lobbying, and removed interest-rate caps; money has no essence and the economy cannot grow forever.

Notes

1: On the experience of moral confusion

• IMF: global debt payback assurance
• Foreign, personal debt
• Poor image of creditors
• On the brink of epic changes to capitalism

2: The myth of barter

• Debt and money are deeply intertwined
• Money:
  • Medium of exchange
  • Unit of account
  • Store of value
• Bartering: double coincidence of wants
• Adam Smith: exchange → money → gov’t
• Graeber: IOU / lending → money (unit)

3: Primordial debts

• To The Wealth of Nations
• Markets are a side effect of armies
• “Money is as old as human thought”
• Alternative credit and state theory: state enforces claim, dictates legal terms
• Primordial debt theory:
• Religion: human existence is debt
• Taxes: “debt to society that made us”
• Cosmic debt to the universe
• Socialism, nationalism

4: Cruelty and redemption

• Assessing value → social hierarchy, money
• Religion and redemption of debt
• Debt forgiveness drives class struggle

5: Moral grounds of economic relations

• Reciprocity
• How do / can we pay back our parents?
• 3 moral principles of economic relations: communism, hierarchy, and exchange
• Communism: according to abilities, needs
  • Sharing, generosity (lighter)
• Hierarchy: status dictates indebtedness
  • One-sided generosity
• Exchange:
• Debt: unequal, possibility of setting straight

6: Games with sex and death

• Trade of humans (wives)
• Blood debt: female “pawns” upon death
• Sacred tradeoff value of humans
• War, conquest, slavery underpin debt

7: Honor and degradation

• Honor in context of the system
• Slavery = social death, degradation
• Patriarchy
• Debt / loans imply hierarchical equality
• Property rights

8: The cycles of history

• Cycles of credit and coinage
• Mesopotamia: 3500-800 BC
  • Loans with interest, no taxes?
• Egypt: 2650-716 BC
  • Highly centralized
  • Loans without interest, but taxes
• China: 2200-771 BC
  • Lots of different forms of money

9: The axial age (800 BC-600 AD)

• Philosophy → reason
• Birth of modern religions
• Formal coinage invented
• Distribution of loot, war
• Money, market, state, military affairs all interconnected by money
• Materialism:
  • Atomicity → any element
  • Coinage → any good or service
• ↑ philosophers questioning ethics and morality, purpose of humanity and soul
• ↑ populist intellectual movements
• ↑ gov’t, politics: war, conquest → money

10: The Middle Ages (600 - 1450)

• Middle Ages: Asia → Europe 400 years later
• India’s religious endowment funds
• China’s: pro-market, anti-capitalist
  • Centralization, taxes, loans
  • Frequent peasant uprisings
  • Fiat money ← existing market notes
• Far west Islam:
  • No loans / debt, profit sharing instead
  • First free-market ideology
• Western Europe:
  • Usurers: Jews relegated to task
  • Adventure
• Transcendence, challenging of status quo
• Decline in conflict
• Symbols: social convention
• Debt, morality → our place in the universe
• Profits are the reward for risk

11: Great capitalist empires (1450-1971)

• Success of China’s silver-backed currency
• 1: greed, terror, indignation, debt
  • Internet is not sinful (5%)
  • ↑ all money should grow
• 2: the worlds of credit and interest
  • Melding of moral and financial terms
  • Credit → interest
  • Everyone is motived by self-interest
• 3: Impersonal credit money
  • Bank notes: owed by the state
  • Materialist age: “pretend it’s there”
• 4: What is capitalism?
  • Economy must grow
  • Company shares
  • Wage labor: free of debt, sin
• 5: Apocalypse
  • Social changes inevitable, desirable
  • Gov’t should manage ↑ change
  • The people give gov’t its legitimacy

12: Begging of TBD (1971-)

• Free floating USD, int’l gold backing
• Lots of smoke and mirrors
• Still driven by military, war
• Credit cards in 1968, debit in 1970s
• Debt imperialism:
• Money has no essence
• Crisis of inclusion
• The great decoupling: speculation
• Lobbying, no interest rate caps
• Neoliberalism: financial-ization of life
• “Capitalism cannot really operate in a world where people believe it will be around forever”
• Cannot grow forever
• Market populism: outside of state