Anthropology Economics History

Debt: The First 5,000 Years (Summary)

by David Graeber

What if everything you've been taught about the origin of money is a myth? Economists tell a simple story: first came barter (I'll trade you three chickens for a pot), then money was invented for convenience, and finally, credit emerged. But what if the historical evidence shows the exact opposite? In ancient societies, you didn't barter for a pot. Your neighbor just gave you one, and everyone simply remembered. You owed them. Credit and social relationships came first, and coinage was invented thousands of years later—primarily to pay soldiers and fund wars.

Credit Came Before Cash

The textbook story of barter-to-money is a fantasy. Anthropological evidence shows that early human economies ran on sophisticated systems of social credit and gift-giving long before the first coin was ever minted.

In a small traditional village, if your neighbor needed a chicken, you didn't haggle over how many yams it was worth. You gave them the chicken, creating a social obligation—a debt. This informal 'I owe you one' system, built on trust and community memory, was the true foundation of commerce.

Money Was Invented for Armies, Not Markets

The invention of coinage wasn't driven by the needs of local merchants, but by the needs of states to provision large, mobile armies. It provided a simple, impersonal way to pay soldiers who were far from home.

The first coins appeared around the same time as the first professional armies in Lydia, India, and China. A king could stamp a piece of silver, declare it as payment for taxes, and then pay his soldiers with it. The soldiers could then use that coin to buy food from villagers, who had to accept it because they needed it to pay their taxes.

Debt Turns Humans into Numbers

The shift from informal social obligations to quantifiable, interest-bearing debt fundamentally changed human relationships. It allows for the dehumanization of the debtor, turning a moral relationship into a cold, mathematical calculation that can be enforced with violence.

The word 'redemption' originally meant buying something back from a state of debt or slavery. Early laws across Mesopotamia and the ancient world are filled with 'clean slate' proclamations, where kings would periodically cancel all debts to prevent society from collapsing under a permanent, unpayable debtor class.

Every Major Religion is Obsessed with Debt

The rise of the world's major religions during the Axial Age (800-200 BCE) was a direct response to the new social violence created by coinage, warfare, and debt. These religions reframed debt in cosmic, spiritual terms.

In Christianity, sin is framed as a debt owed to God, which is 'redeemed' or 'paid' by Christ's sacrifice. Similarly, in Vedic India, the concept of karma emerges as an unending cosmic debt that you owe for your actions across lifetimes.

Go deeper into these insights in the full book:
Buy on Amazon
Listen to the full audio book with an Audible Free Trial.
As an Amazon Associate, qualifying purchases help support this site.