I am not sure if some of the ideas about debt that Graeber argues are correct, but he does discuss a lot of interesting examples of debt from societies throughout history.
Can you just give the answers to these questions?
For example, instead of telling me to read a 500 page book, you can say "the Big Bang is this really crazy but suprisingly plausible theory that our universe just suddenly exploded from nothing into this really hot and dense and chaotic realm, and now everything is expanding and cooling down and getting farther apart but also clumping together because of gravity. Check it out!"
Becuase at least then you can say "oh wow, why is it clumping together? how do we know gravity is a thing?"
> or if some debts will ever be repaid, or wondering about "jubilees" where debts are forgiven,
Some things are complicated and take 200 pages. There's nothing more to it.
At least now the reader can ask, "what makes the orthography so interesting"? To which a deeper conversation can be had about its symbolic writing method and efforts to romanize and digitize it efficiently.
Now the reader has more reason to check out the book with just 4 or 5 sentences of info. Its like an outline vs a headline.
Perhaps the laziness, then, lies with those who will not duck.com !w debt the first 5000 years
Calling someone lazy and not understanding, because you want explanation for 5 year old and are not willing to engage with longer text and want him to do the work is hypocrisy and manipulation at its best.
I... kinda feel the opposite? if you feel like you can summarize something complex in 5 sentences to a person without any background, I think you probably aren't fully understanding the thing you are summarizing.
I think this is especially true in fields like economics where even the people at the top of the field who have studied for years don't 100% understand everything.
If you recommend me a dish from a restaurant, but you can't describe the flavors, texture, and quantity in a few sentences, then why are you recommending it?
"It's awesome, the flavor is spicy, salty, and smokey. It is charred on the outside and greasey and chewy inside. It is a very hearty and filling dish."
but... when they start going on about the various flavors? Yeah, I have a really hard time translating that into what a thing tastes like, because I lack the background, I lack the education.
The thing with topics like the ones covered in Debt, is that they have been weaponised by our leaders to facilitate social stratification and very unjust economic disparities. I believe this has largely been made possible through simplification of these concepts and making bite-sized claims about how "basic economics" works, where all the detail and nuance has been thrown out. These kinds of 3 sentence summaries can be very dangerous.
"A car is a small vehicle that has a motor that turns energy into motion".
"Ummm well ackshually there are smaller vehicles than that, and cars can be electric or oil, so clearly you don't understand the topic unless you start with the factory blueprints first instead of the dictionary definition."
That depends on the person on the receiving end. For an expert on the topic, it may be misleading. For average Joe on the street, it is completely fine.
Do you have a better 5-sentence explanation for what Big Bang is? Joe isn't going to read a book about it.
One thing he does point out, however, is that in recent decades, much of our debt has seemed to shift from a more useful tool for robust modern economies - as it was used in early 20th century for Keynesian stimulus and the likes - to more of a tool for subjugation, through new forms of debt peonage - e.g. with student debt in the USA or financial aid packages to former colonies - very similar to what we've seen in earlier times.
I think it's a fantastic book, offering a very compelling narrative of how our social systems have evolved around these notions of debt since civilisation began. Also, if anyone wants to dig into the book right away, there are free versions of the book online[0], including an audiobook[1]. Since Graeber is an anarchist, I'm sure he doesn't mind if not everyone is paying for it ;)
[0] https://libcom.org/files/__Debt__The_First_5_000_Years.pdf [1] http://www.unwelcomeguests.net/Debt,_The_First_5000_Years
> and ask her to contemplate the justice of insisting that the lenders be repaid, not by the dictator, or even by his cronies, but by literally taking food from the mouths of hungry children.
I'm still willing to give this book a chance, but it's not a good look when the third page already contains an emotionally manipulative and gross misuse of "literally".
In English language there's a clear separation between debt and guilt. Debt is used for money, guilt for (e.g.) the legal system when talking about criminal activities. Those are 2 different words with 2 different meanings.
But in Dutch language we don't have different words for debt and guilt. Both concepts are essentially translated to the Dutch word for guilt ("schuld") which has a much more negative connotation than debt when talking about money. The same is true for the German language for example. And this might impact policies when dealing with debt, see: https://www.ft.com/content/a2c51e14-1ded-11e0-badd-00144feab...
"And forgive us our debts, just as we also forgive our debtors." (Matt. 6:12)
A debt is a very natural thing for humans, because we feel compelled to provide value to people who can't pay us yet.
Even before money people had gifts and favors - we give with the expectation that we'll be given something in the future - or we say 'you owe me one' when someone has helped us through an issue without sending us an invoice.
So the genius of fiat currency is that you get to represent these IOUs as a standard, fungible currency, such that I can take the debt you owe me and transfer it to someone else, so now you owe them. Being able to trade debt like this essentially turns debt into the currency.
The benefit of this being that economic growth is not limited to how many gold coins we can mint -- we can become as indebted to each other as we like -- the more people go into debt, the more money we have to trade. Pretty neat.
Problems really only arise if debt is systemically expected, like a housing market that works only on a foundation of mortgages.
This may be true in some theoretical sense, but in practice, it is hard to believe. How would I go around to make the government accept my 20$ and give me some equivalent of that? What could government possibly give me for my 20$?
Dollar bills are for buying things. I could go to a store and buy a bottle of expensive wine for that bill. But I wouldn't say the store owes me.
As an example, British pound notes have the wording "I promise to pay the bearer on demand the sum of five [ten/twenty/fifty] pounds", which dates back to a time when you could actually exchange the notes themselves for gold.
That's a misunderstanding. A $20 bill is the government's liability, not the store's liability. You and a third party are using government liabilities as a currency. Every $20 bill is on the liability side of the central bank's balance sheet. Every entity accepts its own liabilities as a form of payment. Governments issue currency which they then must accept as payment for taxes. Banks issue credit which they then must accept as payment for debt service.
Debt can be money if the legal system is sound. But money doesn't need to be debt if the money issuer is trusted not to debase the currency.
As the book delves into, it may actually be the opposite. A bank borrows the original 20$ from the government. This allows the bank to create a 20$ bank note to be loaned out, and as long the government doesn't demand their money back, it can continue circulating in the economy. The bank notes get traded and becomes the currency, which is how many paper money currencies was created according to the book. The problem arrives then when a single nation has bank notes from several different banks, so in order to solve that problem the government then grants a single bank, let's call it a central bank, the monopoly of borrowing money from the government from which all the other banks then borrow from.
A key point here is that the central bank can not be part of government in this scheme since then it would be the government borrowing money from itself. When people talk about money as an illusion, this is one of the larger aspects to it.
That was true in the days of the gold standard (https://en.wikipedia.org/wiki/Gold_standard), but nowadays, i don’t think it is true anymore.
You can’t bring your 20$ bill to the government and get goods in return whenever you want to make such an exchange.
Also, a lot of money gets created by banks, not the government (in the USA, all the money, I think. Isn’t the Fed independent?)
Interesting, how does that work? Can a bank create money to pay its own taxes? That sounds too convenient...
A bank creates money when it borrows you money that isn’t fully backed by saving account(s). See https://en.m.wikipedia.org/wiki/Fractional-reserve_banking, which, a.o. says:
”Because banks hold reserves in amounts that are less than the amounts of their deposit liabilities, and because the deposit liabilities are considered money in their own right, fractional-reserve banking permits the money supply to grow beyond the amount of the underlying base money originally created by the central bank.”
The amount by which a bank can do that is regulated, and, in the end, under control of the central bank. The central bank won’t be involved in every minor fluctuation of the amount of money in circulation, though.
A pays $100 to B. B keeps $20 and pays $80 to C. C pays $80 to D. D adds $10 of his own money to pay $90 to E. Everyone's debt has been repaid, but only $110 of currency is needed for all these transactions to take place -- assuming all debts are paid in cash. All you need is sufficient liquidity.
I could loan you five quadrillion dollars provided that you also loan me five quadrillion dollars. No currency has changed hands, but we've just increased the world's total outstanding debt by ten quadrillion dollars!
When you have a group of subjects that are indebted to another, separate subject, then it makes sense to calculate the total debt.
In todays world, the promise is made to a lender (a bank), which then creates a fungible IOU, i.e standard currency for that promise, which can be exchanged for equivalent amount of work.
The whole system is a collective promise to work, and that keeps the society running.
Or you could say it's dual to money - creating debt creates money, paying debt destroys money. There's literally less money in the world when you make your mortgage payment (bank just sends much of your payment to /dev/null), and there's literally more money in the world when you take a mortgage (bank pulls it out of thin air).
If all debt would be repaid then almost all of the money as we know it today would disappear.
You need to explain why.
Also, I agree that the person you replied to was oversimplifying.
It's a very counter intuitive concept that underpins the entire economic system. It was even a subject of a (failed) Swiss referendum recently: https://en.wikipedia.org/wiki/2018_Swiss_sovereign-money_ini...
Mortgages make MBS, mortgaged backed securities, which are traded around. You can buy these, or SLABs, student loan backed securities.
Neither are money. M0 money can only be made by the US Fed. M1 or M2 money can be made by banks out of savings accounts or checking accounts, due to the fractional reserve system.
By lending money to a bank through the savings account mechanism, the bank owes YOU money, because the bank spends roughly 80% of it on other things.
That's why there is a distinction from M0 pure cash, and the M1 or M2 virtual 'nearly money' in the system. I think credit cards are a higher order of money as well...
Keeping those two in check is the main goal of any central bank, ever since the gold standard was generally abandoned and money became entirely abstract. In my opinion no one really knows how to do it (although it's been okay-ish so far), the FED for example often uses national unemployment rate to decide how much dollars should be thrown at the system.
By contrast, I found Graeber’s follow up collection “The Utopia of Rules” startlingly provocative and a super fun read - one of my favorite books. I think Graeber’s divergent writing style and argumentative form work better in the essay format.