AS THE subject of debt has assumed an increasing prominence in American politics in recent years—from the mortgage crisis to Tea Party tirades about government borrowing—a curious feature of the debate has emerged: debt in American politics is an intensely moral issue. Right-wing explanations for the housing crisis center on “irresponsible” borrowers, while the most timid Keynesian measures are denounced as “government living beyond its means” (a curious accusation as no one would ever think of denouncing a corporation’s frenetic borrowing as a failure to “live within its means”). Why has debt, an economic fact of life it seems, come to be such a morally charged subject?

David Graeber’s Debt: The First 5,000 Years attempts to answer this question through a panoramic examination of debt’s role in human society. Graeber, an anthropologist by training who is more well-known for his contributions to anarchist theory, gives us a look at how debt works, stretching across continents and millennia. In a country where left intellectuals have, for decades, fetishized micro-politics, difference, and the local, the ambition of such a work is a breath of fresh air. Graeber attempts a tremendous task with Debt, and his accomplishment is one for which all leftists should be thankful.

Graeber begins by examining the traditional story economists tell about where debt comes from. Once upon a time, it goes, people exchanged goods directly with one another. Joe made shoes and wanted corn, while Jane grew corn and wanted shoes. Eventually, people figured out that an intermediary commodity would simplify the process so that one could still trade with people who were not selling the exact good one desired. Thus money was invented. Finally, debt and credit were invented as a way to make things easier still, so people could buy things they didn’t yet have all the money for.

The only problem with this story, as Graeber demonstrates forcefully, is that there isn’t a word of truth to it. In over a century of anthropological research, no one has ever found a society whose internal economic life was based on barter, let alone a bartering economy from which money developed. So where did money come from? The earliest examples seem to be in the accounting books of the large temple complexes of ancient Mesopotamia. Here, silver was used as a common unit of account to compare goats, barley, and the other necessities of life. However, unlike in the economists’ fairy tale, silver coins didn’t actually circulate alongside these items. Rather, silver served as the unit of account for debts, such as the taxes owed by peasants. The economists got the story exactly backwards: debt came first.

Graeber argues that the situation described above, in which debt is the foundation of economic life, and money little more than a way of keeping track of it all, persisted for much of early human history, from about 3500 BC to about 800 BC. Then came what he calls “the Axial Age,” in which money began to circulate in the way with which we are familiar today. For Graeber, this transition came about above all as the result of the actions of governments. While coinage seems to have first appeared as the result of actions by private merchants, the transition to a fully circulating currency came as the result of empires seeking to supply armies. Rather than attempt to coordinate the vast amount of resources necessary for supplying an imperial army, the empires of this age devised an ingenious shortcut: they would pay their soldiers (who were often mercenaries anyway) in coinage and then demand that the taxes of their subjects be paid in that same coinage. In this way, the empire’s subjects were forced to acquire coinage by orienting their economic activity toward providing for the soldiers, and money became what Marx called “the medium of payment.”

This history makes nonsense out of the common opposition placed between markets and governments. Far from arising from a natural “propensity to truck, barter, and trade,” as Adam Smith famously put it, modern markets were the creation of imperial states seeking to better organize their pillaging. Indeed, it is a major theme of Graeber’s text that markets are generally the creation of states, and without states have a tendency to stop behaving like markets. He illustrates this point with an examination of markets in medieval Islamic society in the Middle East. Here, in a situation virtually unique in all of history, something close to the idealized “free market” of conservative dreams actually existed. The state took a largely hands-off approach to markets, refusing to enforce contracts with coercion. Unlike in most situations with extensive markets, people who found themselves unable to pay a debt were not liable to have their property seized or be thrown in prison. Since there was no state backing up business deals, they tended to be conducted entirely on trust and honor, words with little currency in the economy of Goldman Sachs and Enron. Islamic economic thinkers placed a high value on mutual cooperation for which markets were seen as an institutional framework. While they recognized that competition was a feature of markets, they never held it to be a central value in the way in which bourgeois economic theorists do.

Though Graeber doesn’t take his argument here, his examination of medieval Islamic markets illustrates a key tenet of Marxist political economy. While apologists for capital maintain that it is institutions and ideas like private property rights that are responsible for capitalism’s technological dynamism, Marxists argue that it is actually the exploitation of the working class that powers accumulation. For this exploitation to proceed, workers must be “doubly free,” as Marx put it: free to sell their labor power to whomever they choose, and free from any property of their own on which they could live without having to sell themselves on the market. This second freedom was accomplished for workers through the process of “primitive accumulation,” the forceful dispossession of peasants around the world. Thus, capitalism’s growth depends not on the protection of property rights, but rather on their elimination for the working class. The case of Islamic societies with well-developed markets and concepts of private property, but nothing like capitalism’s explosive economic growth, illustrates this point well.

Though Debt is a tremendously useful book for socialists, Graeber’s analytic framework is quite different from that familiar to Marxists. Concepts like modes of production, forces of production, and even exploitation have almost no role in the book. Instead, Graeber develops his own conceptual vocabulary. As alluded to above, his vision of history depends not on different ways of organizing production, as in the Marxist understanding of feudalism, slave society, and capitalism, but rather on a categorization of how societies used debt. Graeber describes an epochal oscillation between what he calls “virtual credit societies,” where there is practically no coinage in circulation and most economic transactions are based on credit of various sorts, and societies based on bullion, where coinage circulates. Thus he describes a transition from the great agrarian empires (3500–800 BC) to the Axial Age and the rise of circulating money (800 BC–600 AD) to the Middle Ages (600–1450 AD) to the great capitalist empires of the modern era.

Graeber argues that to understand different roles debt plays in a society, we have to understand the different moral grounds of economic relations. He argues that our analysis should begin “with the very small things: the everyday details of social existence, the way we treat our friends, enemies, and children.” From this he develops three different moral principles on which economic activity can be based: communism, exchange, and hierarchy. Graeber argues that communism is not, as it is generally thought of, a kind of property arrangement in which productive assets are collectively owned and managed, but rather any kind of human interaction proceeding on the basis of “from each according to their abilities, to each according to their need.” He notes that a great deal of human activity already proceeds according to these rules. Ask a capitalist for a light for your cigarette, and even Lloyd Blankfein (probably) won’t charge you for it. Similarly, a drowning person yelling for help will never be asked “How much?” by people seeking to save him. Exchange is the mode most people would identify with economic behavior today, when a voluntary exchange is made between two people, both of whom can choose not to enter it and both of whom can walk away as soon as it’s finished. Hierarchy is an exchange based on explicit inequality, such as the confiscation of goods by a feudal lord, or a wealthy patron’s support for an artist in Renaissance Italy.

Though this taxonomy of different kinds of economic relations has some advantages—it works as a disproof of the idea that communism is contrary to human nature, and makes nonsense out of free-market economists’ idea that everyone is always a self-interested profit maximizer—it has some weaknesses as well. On the most basic level, Graeber is primarily concerned with the sphere of economic exchange, and not what Marx called “the hidden abode” of production. Marx argued that while exchange and circulation appear to be the most important spheres of economic activity, in fact how humans produce the necessities of life is the primary determining factor in the structure of a society.

Graeber’s approach misses this crucial role of social structures in determining individual actions. While he is surely correct to argue that, even inside a capitalist firm, workers will proceed along communist lines when one person asks her co-worker to pass the screwdriver, his approach doesn’t seem capable of providing any answers as to why it is acceptable for interactions to proceed along communist lines here, but not in the making of decisions about the running of the plant itself. To answer this question, one needs to talk about structures like a capitalist market in which a class (another social structure) of employers must produce as much profit as possible or be driven out of business by their competitors, a process which is dependent upon the exploitation of a class of workers who would obviously choose not to be exploited if they had any say in the matter. Though at some points Graeber does bring social structures into play an explanatory role, as when he describes how debtors are often forced to view the world solely through the lens of what can be made useful to pay their debt (which is how Graeber explains the conquistadores’ ravaging of the Americas), his account is not nearly so rigorous as the Marxist one in explaining why people cannot simply opt out of capitalism.

Even more problematically, the minimal use of social structures as explanatory concepts leaves Graeber unable to theorize agencies capable of overthrowing the system he describes. The Marxist account argues that since the exploitation of workers is the motor force of capitalism, and since workers cannot simply divide up a factory the way peasants could a field to farm individually, they have both the ability and the interest to end capitalism and build a socialist society. By contrast, Graeber’s account of capitalism suggests no such special agency, and indeed, he tends to see capitalism as but one more instance of the combination of communism, exchange, and hierarchy, that has persisted for millennia. We see the problems this perspective creates at the very end of the book, where he suggests that a general debt forgiveness could serve as a useful strategic orientation. Yet as desirable as such a forgiveness would undoubtedly be, Graeber’s elision of social structures in his account means he is silent on the structural forces that would fiercely oppose any such action, as well as on the social agencies capable of achieving it. While Graeber is forthright that his agenda is more about analysis than strategy in Debt, offering a strategic goal without any analysis of the strategies required for achieving it is not particularly helpful. In the framework of an argument that makes that kind of analysis quite difficult, it can be downright disorientating.

In terms of a basis for thinking about political strategy, then, Graeber’s book leaves much to be desired. But his historical work in demystifying markets is nonetheless extremely valuable, as his recounting of the sheer range of ways in which debt and economic life have been arranged in human society. These arguments will surely prove useful to those of us striving for a society in which our obligations to each other aren’t decided by bankers and billionaires.