A thoroughly orthodox radical

In: Uncategorized

27 Mar 2015

It was only recently that I recognised the adoration Britain’s leading financial newspaper has for the man often dubbed the thinker behind the Occupy movement. The Financial Times published a long extract from David Graeber’s new book, The Utopia of Rules, on the front page of its weekend Life and Arts section.

I quickly realised it did not end there. There was an associated podcast with Graeber and two leading FT columnists. Then there was the review of the book by Gillian Tett, another FT star, where she called his previous work a “brilliant treatise”. It was only recently that I recognised the adoration Britain’s leading financial newspaper has for the man often dubbed the thinker behind the Occupy movement. The Financial Times published a long extract from David Graeber’s new book, The Utopia of Rules, on the front page of its weekend Life and Arts section.

Helpfully BBC Radio 4 was running a 10-part serialisation of Graeber’s earlier book on Debt: the first five thousand years at about the same time. This provided me with the opportunity to grapple with his ideas having shamefully failed to read the earlier work. I do not begrudge David Graeber the publicity and I am not criticising the FT for covering his books (full disclosure: I sometimes write for the FT on a freelance basis). What I do find telling is that the newspaper apparently feels so comfortable with views many would assume are so far from its own.

The thrust of his argument is essentially that the world has been organised around the repayment of debt for at least five millennia. Not only does debt provide the economic rationale for society but, in Graeber’s view, it is also the basis for morality and religion. He argues it is a contradictory outlook since it assumes people should repay their debts but, at the same time, regards lenders as evil.

In emphasising the importance of debt rather than money he claims to be debunking a core assumption of economics. To make his point he cites Adam Smith who argued in The Wealth of Nations that barter preceded money. Graeber, who is a professor of anthropology at the London School of Economics, says that Smith and his followers get it the wrong way round. Graeber says the evidence shows that debt preceded money. Complicated credit arrangements were in place long before money was introduced.

Although it is not a central point there is more than one sleight of hand in this claim. For a start Graeber tends to assume that in earlier eras money meant coinage but that was not what Smith argued. In the chapter on the origins of money in The Wealth of Nations he wrote that during the time of Homer, the ancient Greek writer, oxen sometimes acted as a means of valuation. In any case, the assumption that barter predated money is not central to Smith’s economic model. The thrust of Smith’s argument is that specialisation and trade can make society much more prosperous.

This latter point relates to Graeber’s main error: his fetishisation of debt. In other words he attributes enormous power to debt but is virtually blind to the realm of production and even circulation. Graeber takes a blinkered view of the workings of the economy.

This narrow outlook can be attributed to what could be called Graeber’s anthropological method. His starting point is that of interpersonal relations rather than examining the operation of society as a whole. This leads to a fundamentally ahistorical approach in which the changing forms that social organisation has taken over 5,000 years are blurred.

No doubt many financial journalists would bridle at Graeber’s call for debt cancelation and a radical redistribution of wealth. But his fetishisation of finance and downplaying of the real economy are completely in line with the contemporary orthodoxy.

This post was first published yesterday on Fundweb.

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