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DEBT

DEBT
THE FIRST
5,000 YEARS

DAVID GRAEBER

'* MELVILLEHOUSE
BROOKLYN, NEW YORK

© 2011 David Graeber
First Melville House Printing: May 2011
Melville House Publishing
145 Plymouth Street
Brooklyn, New York 11201
mhpbooks.com
ISBN: 978-1-933633-86-2
Printed in the United States of America
1 2 3 4 5 6 7 8 9 10
Library of Congress Cataloging-in-Publication Data

Graeber, David.
Debt : the first 5 ,000 years I David Graeber.
p . em.
Includes bibliographical references and index.
ISBN 978-1-933633-86-2 (al k . paper)
1.

Debt-History. 2.

Money-History. 3. Financial crises-History.

I. Title.
HG370l.G73 2010
332-dc22
2010044508

CONTENTS
1

On The Experience of
Moral Confusion
21

2

The Myth of Barter

3

Primordial Debts

43

4

Cruelty and Redemption

73

s

A Brief Treatise on the Moral
Grounds of Economic Relations

6
1

89

Games with Sex and Death

127

Honor and Degradation , or,
On the Foundations of
Contemporary Civilization

s

165

Credit Versus Bullion,
And the Cycles of History

211

The Axial Age (800 BC-600 AD)

223

10 The Middle Ages (600 AD-1450 AD)

251

9

11

Age of the Great Capitalist
Empires (1450-1971)

307

12 (1971-The Beginning of Something

Yet to Be Determined)

361

Notes

393

Bibliography

455

Index

493

C ha pte r O n e
O N TH E EXPE R I E N C E O F MO RAL C O N F U S I O N

debt


noun

1

a sum of money owed.

2

the

state of owing money. 3 a feeling of
gratitude for a favour or service.

-Oxford English Dictionary
If you owe the bank a hundred thou­
sand dollars, the bank owns you. If
you owe the bank a hundred million
dollars, you own the bank.
-American Proverb

TWO YEARS AGO, by a series of strange coincidences, I found myself attending a garden party at Westminster Abbey. I was a bit uncom­ fortable. It's not that other guests weren't pleasant and amicable, and Father Graeme, who had organized the party, was nothing if not a gra­ cious and charming host. But I felt more than a little out of place. At one point, Father Graeme intervened, saying that there was someone by a nearby fountain whom I would certainly want to meet. She turned out to be a trim, well-appointed young woman who, he explained, was an attorney-"but more of the activist kind. She works for a founda­ tion that provides legal support for anti-poverty groups in London. You'll probably have a lot to talk about. "

We chatted. She told me about her job. I told her I had been involved for many years with the global justice movement-"anti­ globalization movement," as it was usually called in the media. She was curious: she'd of course read a lot about Seattle, Genoa, the tear gas and street battles, but . . . well, had we really accomplished any­ thing by all of that?

"Actually," I said, "I think it's kind of amazing how much we did manage to accomplish in those first couple of years. "

2

DEBT

"For example?"
"Well, for example, we managed to almost completely destroy
the IMF."
As it happened, she didn't actually know what the IMF was, so I offered that the International Monetary Fund basically acted as the world's debt enforcers-"You might say, the high-finance equivalent of the guys who come to break your legs. " I launched into historical background, explaining how, during the '7os oil crisis, OPEC coun­ tries ended up pouring so much of their newfound riches into Western banks that the banks couldn't figure out where to invest the money; how Citibank and Chase therefore began sending agents around the world trying to convince Third World dictators and politicians to take out loans (at the time, this was called "go-go banking" ) ; how they started out at extremely low rates of interest that almost immediately skyrocketed to 20 percent or so due to tight U.S. money policies in the early '8os; how, during the '8os and '9os, this led to the Third...
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