Can debt catalyse the next global rebellion? An interview with David Graeber

Surely one has to pay one’s debts… right? The anthropologist and figure of the Occupy Movement David Graeber thinks it’s time we question the validity of this moral statement. He suggests a new story of debt and revives the idea of a debt jubilee.

Known as an ‘anarchist and anthropologist’, David Graeber was one of the early members of Occupy Wall Street, where he initiated the Strike Debt project, described by Shareable as “the first P2P bailout”Now he also teaches anthropology at the London School of Economics. Have you heard of “bullshit jobs”? The concept was coined by Graeber in an article that went viral a few weeks ago and was translated into over fourteen languages.

In his book titled Debt: the first 5000 years, Graeber analyses the deep foundations of the current economic system based on debt and credit and delivers a disruptive analysis that has had a wide influence. Similar to our previous interview with Charles Eisenstein, David Graeber tells us a new story of capitalism, debt, money and how to move forward.

Most economists believe that primitive economic systems were based on barter. According to you, it was actually the other way around?

Absolutely! Everybody knows the story of primitive barter. This myth was first told by Adam Smith. And you cannot really blame him since he had no real accurate ethnographic information about how societies and money actually operated at the time. So he made this guess about barter and direct exchange: people would just knock at their neighbor’s door and say: “I’ll give you twenty chickens for that cow, ten arrowheads for that plough…”. Of course, in such an economy, you are likely to face a huge problem: what if people don’t need your chickens? So, transaction after transaction, money will gradually emerge to solve this illiquidity issue.

It is a nice story, with one problem though: it is absolutely not true! It just assumes that neighbors are likely to trade in what economists call a spot trade, as total strangers. No credit involved. It’s absurd if you think about it: let’s assume that your neighbor has a cow you need for a feast, but you don’t have anything he wants… right now. Well, you are his neighbor, so of course you are will have something he wants eventually! Now we all know that you owe him something, and he might come back a year later and ask you for a cow, or even ask you for your daughter to marry his son. Actually, he might say anything, and there are many reasons why you’d want to hold your neighbor in your debt! What you actually find in small communities are series of informal debts and different types and ranks of favors. The one thing you are not going to find is exact mathematical equivalence: this is what money is about.

Barter usually happens with people that are used to using cash when the supply of cash dries up

So, the problem is not about money emerging from barter, because barter usually occurs between people that will never see each other again. The real question is: how can these series of informal debts and obligations be quantified? In which context are people likely to start mathematical calculations to achieve perfect equivalence? In situations of potential violence. Imagine a bar fight where someone’s ear gets cut off. Law codes of stateless societies are often very detailed schedules of fine payments for damaging a nose, cutting an ear, injuring a leg, etc. In such cases, payments prevent further violence. And that is a context in which people will demand exactly what is owed. If someone kills your brother and you are not in the mood to forgive him, the law code says he owes you 25 cows. But if he does not have enough cows to pay you, then you will to ask for the exact equivalent and start making calculations.

Historically, that is how money seems to actually emerge. The traditional myth is false: in the first historical records of complex monetary systems, in ancient Mesopotamia, what we find is actually a credit system. The Sumerians did not make scales accurate enough to measure small amounts of money, nobody actually brought tiny bits of metal to the marketplace. In normal transactions, credit was the rule. Barter usually happens with people that are used to using cash when the supply of cash dries up. Think for instance of Russia in the 90’s.


In your book, you also write that all revolutions and social movements in history started because of debt. The first thing people did was to destroy the debt records. Are we in a similar situation right now?

Indeed, we are. Moses Finley said that ever since Antiquity, there is this one revolutionary demand: cancel the debt and redistribute the land. There has been an analysis of the We are the 99% webpage carried out, and that is exactly the kind of demands you will find. It is no longer radical demands for self-organization or dignity at works, but rather about canceling the debts and giving back the basic means of subsistence. Debt seems to provide some kind of moral focus for rebellion, a focus that has radical implications and can mobilize coalitions that could not exist otherwise.

On the one hand, the ideology of debt is one of the most powerful tools ever created to justify situations of violent inequalities and not only make them seem moral, but also make them seem as if it is the victim who is to blame. But when it blows up, it blows up in a very big way! It happens over and over in human history, and I think this is what is remarkable about Occupy Wall Street.

The ideology of debt is one of the most powerful tools ever created to justify situations of violent inequalities and not only make them seem moral, but also make them seem as if it is the victim who is to blame

Debt: The First 5000 YearsStudents are one of the largest groups in the movement, and what they say is basically: “we are the good kids, we took a loan and studied hard to enter into college, we played by the rules. And here we are. But we did not get bailed out. On the other hand, the bankers, those who cheated and lied and destroyed the world economy got bailed out by the government, and now we are going to spend the rest of our lives being told that we are irresponsible dead beats because we owe money to them. That doesn’t make any sense!”.

Even more interesting: 40 years ago, the problems of an indebted college student would not really speak to the heart of a transit or construction worker. But two years ago, we saw the working class massively supporting the Occupy movement. You can only understand that if you understand the power of debt and the kind of outrage it can create. It enables class alliances that would not be possible otherwise. After 2008, people in the USA tried their best to get out of their debt, but two categories of debt were inextricable: student loans and subprime mortgages. Students and the working poor were in a relatively similar situation, and that is why they formed this alliance within the movement. Such is the power of debt!

Back in ancient times, if you were not able to pay your debt back, you could eventually be forced to sell your sons and daughters to slavery. Is there a connection here with your article about “bullshit jobs”?

If someone tried to employ us to throw a rock over a wall and then go to the other side of the wall and throw it back, all day long, we would think that it is absurd. Well, most of our jobs are about as meaningful! When I wrote that piece about “bullshit jobs”, it was an hypothesis: I don’t work in the corporate sector. But when I meet people from the corporate sector, they seem miserable in a very specific way. Try to ask any corporate lawyer about his contribution to society! There seems to be a very specific moral damage that comes of working a job that you secretly feel does not really need to exist. Millions and millions of people are in this situation. Oddly, it reminds me of the kind of meaningless make/work jobs the Soviet Union created — the kind of things that capitalism is not supposed to do! Somehow, they have made up all these jobs that don’t need to exist and the people sitting in these jobs are perfectly aware of it.

However, this hypothesis was criticized by The Economist. According to the journal, these jobs would exist only to manage the increasing complexity of the global economy. What is your answer?

My answer is pretty simple. There is a good counter-example to this argument: universities. They are continuously adding more and more administration. More assistant deans, more publicity advisors, etc. If you compare to the situation 40 years ago, we now have four times more administrative functions. Has teaching become four times more complicated than it was before? Production has not become more complicated, we have just added these additional levels as a mean to divide the spoils. These useless jobs are essentially a form of rent: we are distributing some of the profits of financial extraction to a class of people basically paid to simply look busy.

One possible solution you point out is to organize a debt jubilee. How can we practically do such a thing? And how can we rebuild a system without repeating the same mistakes?

When I mentioned the jubilee solution, I saw it rather as a conceptual cleaning, and not as a practical solution. If we realize that money is nothing but a social arrangement, we can wipe it out, or recreate it, or we can do whatever we like. Obviously, nobody ever wipes out all debts. Of course, some mechanics have to be left in place. I have no doubts that professional economists can work it out: people like Michael Hudson and Steve Keen (see the video) have already come up with actual models.

Obviously, we would have to keep the pensions in place. One of the most insidious aspects of neo-liberalism is that it forces people to be invested in the system through privatization of pension funds. We need to go back to a system of public pensions. But those are technical details, which I think will be possible to address if we get the appropriate people working on it. Economic problems are not that difficult to solve, but the political problems are!

If you talk to honest people in the ruling class, you will see that they are perfectly aware of the fact that there will be debt cancellations eventually

If you talk to honest people in the ruling class, you will see that they are perfectly aware of the fact that there will be debt cancellations eventually. There is no way to avoid it. The question is: what form is it going to take? Will it be seen as a gift from above? Or will it be caused by a pressure from below? Is it going to be something meant to preserve or transform the system? Is it going to be honest, are the rulers going to admit that they are actually canceling the debts or find a way to pretend they are not? History suggests that it can go either way. Back in ancient Mesopotamia, debt cancellations were often a way of avoiding social breakdowns and preserving the basic structures of authority. But you also have to remember that Greek democracy and Roman republic were also the results of debt strikes. It is absolutely critical that we stop discussing whether or not debt cancellation is going to happen, but how.

I personally think there is no way to maintain the existing financial system without undermining the basic principles of capitalism. I think capitalism has reached the limits of its historical potential. What I am worried about is whether the next system might be even worse.

Could a decentralization of money creation be a good starting point?

A lot of people are currently experimenting with local and complementary currencies, and I see that as very promising. It is obviously not a single solution, but still an essential element in any solution. Rather than having no money anymore, maybe we should experiment with new forms of money. We will never get rid of it entirely. But if money is essentially a rationing coupon, surely we want to ration as little as possible and probably eliminate money in at least certain spheres of life.

But money is so deeply embedded in our minds…

People usually go back to different forms of currency when they have no choice: if the existing currency system collapses, you have to do something. In times of economic breakdown, anything can happen.

By the way, how about an unconditional basic income for all citizens?

The essential idea behind basic income is that since we are all producing value all the time, it is necessary to detach the concept of productivity from the workplace. If you provide a basic income, you send a powerful message: nobody wants to just sit there and do nothing, we trust you to find a valuable occupation. The idea of morality of work is one of the most insidious tools in the hands of power, and increases the bullshit jobs phenomenon.

You know, there really is not much of a justification of capitalism anymore. The system is supposed to improve the conditions of the poor, thus making inequalities acceptable. It is no longer the case. It is supposed to produce greater security. It is no longer the case. It is supposed to sustain democracy. It is no longer the case. All the classic positive justifications are gone. Moral arguments are all that is left: working is good, one has to pay one’s debts – and there is no other way. We have reached a point where these two arguments are leading to the system’s self-destruction. The ship is sinking because of an overload of work and debt.

You have been involved in the Occupy Wall Street movement since the early days. In his recent book ‘Swarmwise’, Rick Falkvinge compares the Pirate Party to the Occupy movement. Nevertheless, one of the main differences he points out is that you do not have leaders or specific demands. How can you achieve substantial results with fully decentralized leadership?

But we had lots of leaders in Occupy Wall Street: over 100 000! Actually, it all depends on your strategy. We have a long term strategy: we are trying to transform the political culture. In order to do that, you need to create entirely new institutions, habits and sensibilities. This is quite an ambitious goal in itself. But it also means you cannot focus on immediate concrete outcomes (which does not mean you cannot reach them on the way). As a matter of fact, we were relying on a delegitimization strategy.

I like to make an analogy with Argentina: what ended the reign of the IMF in Latin America was the Argentinian default. Before the Kirchner government came into power, three different governments had been overthrown by popular insurrections. Kirchner himself was not a radical, but rather a very mild social-democrat. But he had to do something radical, because the social movement had completely delegitimized the whole political class. People started to self organize and create their own alternative economy. This was a perfect example of not having a demand for the political class but nonetheless achieving political results.

It had got to a point where politicians were so universally reviled they could not even go to a restaurant. They had to wear disguises, or everybody would just throw food at them! At this point, the political class could do nothing but fight the very idea that political institutions were not relevant anymore to people’s lives. So, they had to do a radical thing they would not have done otherwise. This is basically the strategy we are following with Occupy: rather than running candidates making demands, we are trying to create our own political system that would work without politicians, and let the politicians prove to us that they are still relevant in any way.

Rather than running candidates making demands, we are trying to create our own political system that would work without politicians, and let the politicians prove to us that they are still relevant in any way

With Occupy, America has reached a turning point. There is a long record of repression of social movements in the United States, but historically, movements violently repressed are either working class or people of color, and not white middle-class people… Not without causing some kind of moral outrage from the progressive and moderate left (think of the McCarthy period, student protests in the 60’s, etc.). Of course, Occupy was a very diverse movement, but there was a lot of white middle-class people involved, and they were beaten up like everybody else.

This time, no one seemed to care: the traditional alliance between liberals and radicals is broken. On the other hand, I think we achieved more in two years than any social movement I can think of in a similar period of time: the ideas of social class and class power are back on the agenda — this is what the slogan ‘We are the 99 %’ is really about — and we pointed the essential corruption of the American political system. We changed the political field: you have to remember that when Mitt Romney was planning his campaign, the fact that he was a former Wall Street financier was supposed to be a positive thing… In New York, we are only beginning to see the political effects: Bill de Blasio, who is likely to get elected as the next Mayor, is an Occupy supporter. It seems like our strategy is working after all!


Arthur De Grave & Benjamin Tincq

Featured picture: Paternité DoctorTongs

  • Vilma Martinez

    se trata de formar un poilcia escolar y seguridad vecinal