Making a case against unsustainable debt

By Jesse Singal
Globe Correspondent / July 20, 2011

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We’re at a strange, dangerous point when it comes to debt in the United States. It’s accepted that, if you are a middle-class (or poorer) striver, you and your children will be deeply in debt for large periods of your lives. First, student loans. Then a mortgage. Finally, college loans for your children as they begin the same cycle. Not to mention the inevitable credit card and other consumer debt accrued along the way. It’s hard not to overstate what it means for a society built on opportunity that opportunity and massive debt now go hand in hand.

Into this messy situation steps David Graeber, an anthropologist at Goldsmiths College at the University of London, with “Debt: The First 5,000 Years.’’

The snore-inducing title is unfortunate, because this is quite an engaging book. Part anthropological history and part provocative political argument, it’s a useful corrective to what passes for contemporary conversation about debt and the economy.

“A debt is the obligation to pay a certain sum of money,’’ Graeber writes. “As a result, a debt, unlike any other form of obligation, can be precisely quantified. This allows debts to become simple, cold, and impersonal - which, in turn, allows them to be transferable.’’ But material obligations, as Graeber demonstrates through anthropological literature, have always existed in one form or another, but in the best cases were entered into and discharged in a manner that tended to treat people as people, not as units of potential currency, or, worse, as criminals.

Graeber’s examples of past formulations of debt are fascinating. Take the women in one tribal society, who were constantly borrowing small amounts of everything from each other. Everyone was indebted to everyone, and this helped keep the community tightly knit. Or the early medieval Irish jurists who tried to put a specific price on every possible injury or slight (“if stung by another man’s bee,’’ read one code of law, “one must calculate the extent of the injury, but also, if one swatted it in the process, subtract the replacement value of the bee’’).

Graeber is deeply critical and skeptical of modern formulations of debt, which stem from the idea that each human is a rational actor seeking to spend the least and get the most, and that this results in something called “the market’’ that is best left to its own devices. Given that throughout history, trade has usually meant back-and-forth with a neighbor or a friend rather than an impersonal financial entity, why should we scrub the human aspect from it?

But this is “Debt’’ at its most macro level. The book spends far more time tracing the history of debt - and with it, concurrent histories of everything from slavery to prostitution - than with explicit arguments. The effect is that, on balance, the book recounts history more than it argues.

When he does argue, it’s hard to disagree with much of what Graeber has to say. In the United States, for instance, he writes that “the problem of loan-sharking was brushed aside by making real interest rates of 25 percent, 50 percent, or even in some cases (for instance payday loans) 120 percent annually, once typical only of organized crime, perfectly legal - and therefore, enforceable no longer by just hired goons and the sort of people who place mutilated animals on their victims’ doorsteps, but by judges, lawyers, bailiffs, and police.’’

Sure, it’s rude to talk about things in such language. But we’ve built a peculiar system that saddles families with unsustainable debt, and there’s been very little debate about the fundamental factors that underlie this fact. So perhaps we can excuse Graeber using slightly overheated language, reserving our ire for the people who insist that it’s the market, not people, whose urgent demands for autonomy need to be satisfied at every turn.

Jesse Singal is a frequent contributor to the Globe. He can be reached at Follow him on Twitter @jessesingal.

DEBT: The First 5,000 Years By David Graeber

Melville House, 534 pp., $32