They further claim that the government inherits the right to this primordial debt – this naturally leads to a socialistic logic where the government has total control over money and the market. As proof, these theorists cite how religions are often framed in the language of debt. If Adam Smith assumed that we don’t owe any debts to anybody to begin with (freely trading agents), then this alternative theory assumes the opposite: humans start off with infinite debt to the cosmos. Next (Chapter 3), he moves on to the socialist/primordial debt theory of money. On the historical stage, credit was the first mode of economic behavior, and it was only until after money came on the stage did people begin bartering when money was not available to them.

What’s wrong with Smith, in Graeber’s view, is that the history he depicts (Barter > Money > Credit) happened exactly in the reverse! Pre-money societies weren’t dominated by barter as so much by neighbors keeping tabs on the goods they give to each other in aid (credit). He first (Chapter 2) outlines the liberal/capitalist theory of Adam Smith, suggesting that Smith falsely identifies the logic of “barter” as the constitutive human capacity to justify the market and establish economics as a discipline. His project, in the first four chapters, is to dismantle two popular economic ontologies. Graeber cherry-picks his data (some of which are factually wrong) to paint a daring yet distorted picture of economic history that is illuminating as it is biased.

Graeber debt book