In his book Debt: The First 5000 Years (2011), David Graeber proves to be an original and provocative thinker. Graeber is a professor of anthropology and described as an anarchist (I suppose he is an economist of the Left while Murray Rothbard, the Austrian economist would be an anarchist of the Right). Graber was one of the organizers of the Occupy Wall Street movement.
Graeber addresses the issue of debt as an anthropologist and punctures various assumptions of conventional economics. Economists state that trade between humans started as barter and then money was invented as a convenience and then credit systems developed. Graber instead argues that debt is as old as humanity (even being mentioned in ancient Sanskrit texts) and only later was money invented to measure the indebtedness of one human being to another. Barter became popular in certain societies in certain times only with an awareness of the concept of money.
Graeber thus turns the basic theory of the origin of money on its head. He proceeds further to show that free markets with a tradition of fair exchange has never existed and that Adam Smith was an idealist and a Utopian in conceiving such a society!
So-called trade through the ages has been a story of repeated violence, subjugation, slavery, rape and taxation. Indeed Milton Friedman when called upon to give examples of free societies in history could not come up with more than a couple of examples. Graeber writes: "It is the secret scandal of capitalism that at no point has it been organized primarily around free labor. The conquest of the Americas began with mass enslavement, then gradually settled into various forms of debt peonage, African slavery and 'indentured service'."
I agree that, in this sense, Adam Smith was indeed an 'idealist' envisioning a society that never existed but we are missing an important point here. Isn't a free and fair society based on free market economics a society worth striving for? Isn't the entitlement mentality nothing but another version of application of force?
I know this may lead to a debate between regulation and deregulation. A lot has been spoken for and against this topic and I don't want to indulge further. Perhaps books like Johann Norberg's In Defense of Global Capitalism (2001) or Milton and Rose Friedman's Free to Choose (1980) can be held up as arguments for deregulation. But then again the dirigistes may hold up Naomi Klein's The Shock Doctrine (2007) or Joseph Stiglitz's works as counterarguments.
So it goes....
Graeber addresses the issue of debt as an anthropologist and punctures various assumptions of conventional economics. Economists state that trade between humans started as barter and then money was invented as a convenience and then credit systems developed. Graber instead argues that debt is as old as humanity (even being mentioned in ancient Sanskrit texts) and only later was money invented to measure the indebtedness of one human being to another. Barter became popular in certain societies in certain times only with an awareness of the concept of money.
Graeber thus turns the basic theory of the origin of money on its head. He proceeds further to show that free markets with a tradition of fair exchange has never existed and that Adam Smith was an idealist and a Utopian in conceiving such a society!
So-called trade through the ages has been a story of repeated violence, subjugation, slavery, rape and taxation. Indeed Milton Friedman when called upon to give examples of free societies in history could not come up with more than a couple of examples. Graeber writes: "It is the secret scandal of capitalism that at no point has it been organized primarily around free labor. The conquest of the Americas began with mass enslavement, then gradually settled into various forms of debt peonage, African slavery and 'indentured service'."
I agree that, in this sense, Adam Smith was indeed an 'idealist' envisioning a society that never existed but we are missing an important point here. Isn't a free and fair society based on free market economics a society worth striving for? Isn't the entitlement mentality nothing but another version of application of force?
I know this may lead to a debate between regulation and deregulation. A lot has been spoken for and against this topic and I don't want to indulge further. Perhaps books like Johann Norberg's In Defense of Global Capitalism (2001) or Milton and Rose Friedman's Free to Choose (1980) can be held up as arguments for deregulation. But then again the dirigistes may hold up Naomi Klein's The Shock Doctrine (2007) or Joseph Stiglitz's works as counterarguments.
So it goes....
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