[unmole]

> There are no factual mistakes in “Debt” that impact the solidity of Graeber’s conclusions or historical narratives, most inaccuracies were minor and corrected in subsequent editions without changing the character of the book or the arguments within.

It's been a while since I read Debt but I distinctly remember Graber's disingenuous take on Adam Smith's famous "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest." Graber argues that this is wrong because English (Or was it Scottish?) shopkeepers of the time mostly sold goods on credit and thus the customers were in fact depending on their benevolence.

I don't know about you but to me that is complete batshit.

The book also makes a way too big of deal about The Myth of Barter. While that is interesting from an anthropological perspective, Graber makes it sound like the bulk of modern economics is somehow based on this myth.

I get why the book is popular. It posits to tackle big questions and contains the usual tropes against the state, big business, banks etc. that a left leaning audience will be more than willing to eat up. But I don't think it provides any new perspectives on economics that bear any resemblance to the real world.

[quadrangle]

I don't think your summary of why Debt was/is popular will hold up to scrutiny. If you investigate with an open mind why people appreciate the book, it won't be merely because it plays up anti-state and anti-biz, anti-bank tropes. There's tons of other books that do that which people do not find comparable insightful.

The emphasis of the myth of barter and the rest of the stuff about how debt works is interesting especially because it doesn't set out to make the story simpler. He makes the story far more complex and intriguing. It leaves people with the capacity to hold more lightly to our assumptions about the nature of money and power and the economy. None of these things should be taken as inevitable laws of society or something. We recognize that there are many different ways to think about these things. And the simple part is to stop thinking that we all know some supposedly obvious idea like "we must pay our debts" and to start wondering a lot more about all the complexity and presumptions that go into how debt fits into our relationships and situations.

I doubt you'll find readers of Debt who come away extra confident that they now know the answer to how things "really" work. Most readers probably feel more that they have a view of how much there might be out there to understand, and they are willing to be less overconfident and more questioning about it all.

[unmole]

Actually I don't completely disagree with your comment.

"The book asks big questions" would be a better discription than what I originally wrote. The book makes for excellent dinner table conversation.

But I stand by my assertion that it does not provide any new perspectives on economics that bear any resemblance to the real world. And if anything, it makes it difficult for the reader to understand the financial system because of its factual inaccuracies.

[quadrangle]

Given that a decently large portion of the book discusses the anthropology of money and debt in a wide array of diverse cultures, the idea of lacking "resemblance to the real world" seems wrong to me. The real world includes all those different situations that are starkly different from the current dominant economic case.

The core of the book in my reading is not a description of the dominant financial system. I read it as a discussion of multiple factors that influence how debt can be used in a wide variety of ways in societies. And the parts that discussed our current financial arrangements might not be precise in all regards, but they were still more accurate by my understanding than the wrong-but-common concepts that are asserted by most naive citizens and used in most political rhetoric.

[unmole]

> Given that a decently large portion of the book discusses the anthropology of money and debt in a wide array of diverse cultures, the idea of lacking "resemblance to the real world" seems wrong to me. The real world includes all those different situations that are starkly different from the current dominant economic case.

Ignoring the quaint cultural practices of remote tribes does not diminish one's ability to understand the economics of the real world that they live in. Having an inaccurate picture of they actual system they live in on the other hand is far more damaging.

> but they were still more accurate by my understanding than the wrong-but-common concepts that are asserted by most naive citizens and used in most political rhetoric.

That is a rather low bar. But the book still has quite a few howlers:

- US treasury bonds are literally the safest securities on the planet. Graber calls them a debt that will never be paid.

- Graber claims that the global status of the dollar is maintained in large part by the fact that it is, again since 1971, the only currency used to buy and sell petroleum, glossing over the fact that the US dollar was the reserve currency since Bretton Woods. He then follows up with what can only be called a conspiracy theory, suggesting that the US invasion of Iraq was possibly motivated by Saddam Hussein's switch to the Euro.

- Graber likens the large holdings of US treasures by Western Europe, Japan and Korea to a tribute system which siphons wealth from these supposed client states to the American Empire. But when it comes to China holding vast quantities of the very same treasuries, he says from China's point of view, this is the first stage of a very long process of reducing the United States to something like a traditional Chinese client state.

[thoughtstheseus]

On your point about US treasury bonds… I don’t have the book in front of me but this is a common, colloquial saying among many of my peers in finance. No one wants the U.S. to pay all of its debt, the structure of the global economy today requires these debts to function. They’re basically cash equivalents.

Grabers comments on the dollar as an oil currency… I disagree with that. Still, many investors I know around his age would have said something similar 10-15 years ago. The U.S dollar as a reserve currency is America's greatest strength (maybe not greatest but it’s up there) and weakness. Anything that impedes the dollar as a global reserve currency is a significant risk to the U.S.

Grabers comments on Europe, Korea, China, etc. you mention- again not an unusual thing to say in my view. Debatable certainly, but not obviously wrong.

[unmole]

> No one wants the U.S. to pay all of its debt, the structure of the global economy today requires these debts to function. They’re basically cash equivalents.

That is an entirely valid point. But that is not what Graber is alluding to:

> American imperial power is based on a debt that will never-can never-be repaid. Its national debt has become a promise, not just to its own people, but to the nations of the entire world, that everyone knows will not be kept.

They are cash equivalents exactly because nobody believes the US will default. Basically, the exact opposite of what Graber is saying.

> The U.S dollar as a reserve currency is America's greatest strength (maybe not greatest but it’s up there) and weakness.

People keep saying that but I am yet to hear a compelling explanation of the tangible benefits the US actually derives from this arrangement. Graber points to seigniorage or tribute as he likes to call it. Ben Bernanke, obviously not a neutral source, claimed in 2016 that this is on the order of $20 billion a year[0]. The highest, albeit unsourced claim I could find puts it around $100 billion[1]. Either way, in the larger scheme of things, it is chump change.

> Anything that impedes the dollar as a global reserve currency is a significant risk to the U.S.

Even assuming that is true, it's hard to link it to the invasion of Iraq. Iraq started selling oil for Euros in 2000. This wasn't some rouge act of defiance, the switch happened under the aegis of the UN's food-for-oil program. If it actually was a significant risk, the US could have simply vetoed it at the Security Council.

> Grabers comments on Europe, Korea, China, etc. you mention- again not an unusual thing to say in my view. Debatable certainly, but not obviously wrong.

So, is a foreign county holding huge reserves of US treasuries a) The act of a vassal paying tribute to the US or b) The machination of a rival intended to turn the US into a client state? Certainly, they both can't be true.

[justin66]

I haven't read Debt yet but I have a copy in front of me. Yours is the second critique here that seems to be based on a misreading or misunderstanding of the work.

You've not fully quoted Adam Smith:

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

Graeber's refutation, in part:

The bizarre thing here is that, at the time Smith was writing, this simply wasn't true. Most English shopkeepers were still carrying out the main part of their business on credit, which means that customers appealed to their benevolence all the time.

There's nothing disingenuous here. Benevolence (mutual trust and an interest in both one's well being and the well being of the other party in the relationship, informed by some knowledge of one's own needs and the needs of the other party, if you'd prefer to unpack it) is needed to establish a credit relationship.

None of this seems like "complete batshit." Some of the stuff that comes later might be, I haven't read it. (have you read it?)

[unmole]

I've looked at that section of Debt again and it's even worse than I remember.

> You've not fully quoted Adam Smith

That's a strange objection because neither did Graber. The lines appear in the middle of a long and dense paragraph from the chapter Of the Principle Which Gives Occasion to the Division of Labour[0]. I don't understand why you feel the second line in anyway changes the point about rational self interest driving specialisation. Have you read the Wealth of Nations?

> Benevolence (mutual trust and an interest in both one's well being and the well being of the other party in the relationship, informed by some knowledge of one's own needs and the needs of the other party, if you'd prefer to unpack it) is needed to establish a credit relationship.

Sure, it makes sense if you redefine benevolence. FWIW, the dictionary definition[1] is inclination or tendency to help or do good to others; charity. Conflating credit to charity is disingenuous on it's own but Graber doesn't stop there, he says Adam Smith

> wants to imagine a world in, which everyone used cash, in part because he agreed with the emerging middle-class opinion that the world would be a better place if everyone really did conduct themselves this way, and avoid confusing and potentially corrupting ongoing entanglements. We should all just pay the money, say "please" and "thank you," and leave the store.

Except that this is unfounded speculation by Graber. Or to use Graber's favourite turn of phrase, an attempt at de-legitimization. There is nothing in the actual text where Smith suggests anything of the sort.

Further, Graber claims Smith

> created the vision of an imaginary world almost entirely free of debt and credit, and therefore, free of guilt and sin

Again, there is nothing in the text to support the idea that Smith saw debt as sin. The only kind of debt Smith took exception to is public debt[2] and that was for entirely different reasons.

0: https://standardebooks.org/ebooks/adam-smith/the-wealth-of-n...

1: https://www.collinsdictionary.com/dictionary/english/benevol...

2: https://standardebooks.org/ebooks/adam-smith/the-wealth-of-n...

[justin66]

Thanks for elaborating. At first blush my only disagreement is that I don’t think I (or Graeber) “redefined” benevolence at all, and it seems to me a not terrible word to describe the reciprocal trust relationship needed to facilitate the use of debt. I don’t think the larger point you’re making about his take on Smith turns on his use of that word.

As I said, I haven’t read the book, and so I’ll hold off on saying much more. I really expect this to be a book where the author is wrong in some interesting ways, rather than batshit crazy. So many mainstream people get Adam Smith wrong, so the anarchist anthropologist getting it wrong isn’t a complete dealbreaker.

[unmole]

> I don’t think I (or Graeber) “redefined” benevolence at all, and it seems to me a not terrible word to describe the reciprocal trust relationship needed to facilitate the use of debt.

That probably makes banks the most benevolent entities on the planet.