Debt: The First 5000 Years - David Graeber

August 08, 2014

I think one of the central questions of the book is: what gives money it's value? The book leans towards saying it's:
1) because people think it has value
2) it's useful as a yardstick for comparing distinct object types.

Another question is: how did our current system of money evolve? Apparently, people in pre-modern times mostly lived off a system of credit and relied on close neighbours to cover deficiencies. Money only comes into the picture with violence and people being uprooted from their surroundings (as slaves for eg).

In fact, one of the motivations to introduce coinage might have been the need for rulers to extract wealth from the population. Since taxes were paid in coinage, this made it something that was always in demand and might have enabled a market to rise in the first place.

The latter half of the book goes through major stages of human society and the impact of money - coinage was usually present with large, marauding armies and people reverted back to credit (as in the dark ages). The introduction of coinage and related ethical questions and mindset might also have contributed to the philosophical flourishing from 1000 BC to 500 AD.

In particular, the major religions were often created, at least in part, as a reaction to the materialism of money and have a lot to say about interest and debt. Islam outright forbids charging interest (as does Christianity) while the philosophy of Buddhism is interestingly anti materialist.

There is a very interesting section in the book about how muslim merchants got around not having a currency or being able to charge interest during the Arabian golden age and how the Christian notion of chivalry is a translation of/response to the successful Arab merchant, like Sindbad.

The book spends a fair bit of time on how harmful being in debt was and how it sparked many, many revolutions through istory resulting in debt being forgiven en masse.