Where Did Money REALLY Come From?

Professor David Graeber, anthropologist and author of “Debt: The First 5,000 Years,” discussing the history of money and credit. The economics profession tends to teach that money arose from barter. However, anthropologists have been searching for 200 years and found absolutely no evidence for this. Instead, it seems that early human societies were had reciprocal gift exchange, whereby one person would gift something to their neighbor, and that person would be tacitly indebted for something of similar quality. Barter has only been observed between groups that didn’t frequently come into contact, and sometimes between outright enemies, or among people that are already used to money but for some reason have no access to it. Watch the whole talk here: https://youtu.be/CZIINXhGDcs

How David Graeber Changed the Way We See Money

The radical anthropologist was that rare figure: a scholar who was also an activist.

In the third edition of the college-level textbook Macroeconomics, the economists Andrew Abel and future Federal Reserve Chairman Ben Bernanke blithely assert that “since the earliest times almost all societies … have used money.” They say that money arises from the inefficiency of barter—of trading one good for another—because “finding someone who has the item you want and is willing to exchange that item for something you have is both difficult and time-consuming.”

The evolution from barter to money is an old story in economics, repeated down the centuries in one form or another, to the point that even children are aware of it. It also happens to be only that: a story, and one with precious little evidence to back it up outside the heads of those who tell it.

While some economists imagine primordial villages and basic agricultural systems where birds are exchanged for flowers to illustrate the history of money, Abel and Bernanke come up with something much more immediate: The economist is hungry.

Barter systems would indeed make it difficult for an economist to eat lunch. Would a restaurateur exchange his goods for a lecture on monetary policy? Perhaps not, and the meal goes unsold and the economist goes hungry. Thankfully, the economist has students to whom he can sell his knowledge for dollars, which then function as a medium of exchange with which he can purchase his meal. The restaurateur is paid, the economist is satiated, while the students have learned something worthwhile.

But the only people who pay Ben Bernanke directly for his thoughts are investors. Students do not. Perhaps instead they borrow money to pay for the lecture, along with other lectures, a place to live, and the associated administrative costs of providing lectures to students. The interest on the debt eats up most of the students’ subsequent income from the job market, leaving them with no chance of ever paying off the principal in a reasonable timeframe. The debt will stick with them forever, even shaving off dollars from their Social Security checks, and make the normal mileposts of adult life—marriage, children—difficult or impossible to achieve. Fed up with their narrowed prospects, they join a group of activists who have taken up space, literally, in the shadow of New York’s financial institutions and they start talking about what they have in common: their debt. And they decide to do something about it.

Now this story, like the one the economist tells about the origin of money, is a stylized one used to illustrate broader truths about the world. But unlike what economists have said about money, it largely accords with known facts, and for that we have to thank the radical anthropologist David Graeber, who died earlier this week at the age of 59.


“We owe David so much,” the filmmaker and debt organizer Astra Taylor told me, noting immediately how he would have disapproved of using the language of obligation to encapsulate his life’s work.

Graeber had a long and distinguished career as both an activist and academic when the publication of his magnum opus, Debt: The First 5,000 Years, and his work helping organize Occupy Wall Street in 2011 made him that rare thing: a serious scholar and organizer who garnered respectful profiles in Bloomberg Businessweek and the Financial Times. He spent the last decade-plus at Goldsmiths and the London School of Economics after Yale controversially cut him off from tenure, which he suggested was due to his being “quite active in the Global Justice Movement and other anarchist-inspired projects.”

“The thing to understand about David is that he really was someone who equally had a foot in social movements and intellectual scholarly production,” Taylor said. “There are people who are known as leftists through their writing and the internet and never do anything that qualifies as organizing.”

Graeber was a link not just between grassroots movements and the academic world, but between generations of leftist social movements. He was a veteran of the anti-globalization protests in the 1990s who helped start Occupy, one of the facilitators of a debtor movement that would influence the policy agendas of Elizabeth Warren and Bernie Sanders. He was a supporter of the United Kingdom’s anti–tuition fee protests in 2010, which would be the seed of the Momentum movement and Jeremy Corbyn’s ascendance to the leadership of the Labour Party.

The question Debt sought to ask was one that seemed natural in the wake of a debt crisis that would claim millions of homes and thrust much of the industrialized world into first a sharp economic crisis, then a self-destructive series of austerity measures designed to stem the tide of sovereign debt.

What was debt? What was its history, where did it come from, and how did it take such a central role in our personal and economic lives? Why was our language of obligation and morality the same as the one used to describe our credit card bills? Why does the Lord’s Prayer ask God to “forgive us our debts as we also have forgiven our debtors”?

To even begin to answer this question, Graeber had to start with money and the bad history used to explain it. Generations of archaeologists, anthropologists, and historians had tried to find the origins of money (John Maynard Keynes referred to his own studies of money as his “Babylonian Madness”), but economists, especially in their textbooks, resorted to fancy. 

These just-so stories about how money emerged from barter can evoke a kind of childish primitivism  (“You have roosters, but you want roses,” one textbook says) or use imaginary historical examples. Even the stalwart progressive Joseph Stiglitz uses “what appears to be an imaginary New England or Midwestern town,” Graeber writes, to explain how money can replace barter, in the form of farmer Henry selling his firewood to “someone else for money” and then buying shoes from Joshua.

Graeber, in contrast, identifies the origin of money as “the most important story ever told” for economists, tracing it back to Adam Smith’s Wealth of Nations and even to Aristotle. This was “the great founding myth of economics,” he writes, that money was not in fact the creation of governments. It followed that economics was its own form of inquiry, separate from other ways of thinking about social life.

Graeber points out this account “has little to do with anything we observe when we examine how economic life is actually conducted, in real communities and marketplaces, almost anywhere—where one is much more likely to discover everyone in debt to everyone else in a dozen different ways, and that most transactions take place without the use of currency.”

Whereas the traditional account puts barter before money and money before debt, Graeber reverses this, noting that barter tends to only emerge in pre-industrialized societies when exchange happens outside of a familiar cultural context.

In the historical record of ancient societies in Mesopotamia, for example, there are prices of things that may be denominated by “money” (what an economist would call the “unit of account”). But merchants “mostly did much of their dealings on credit,” and “ordinary people buying beer from the ‘ale women’ or local innkeepers  did so by running up a tab, to be settled at harvest time in barley or anything they had on hand.”

Where debt emerged in Sumeria, so did novel forms of social domination, whose eventual effects were so dire as to necessitate harsh management of its lenders. Those early Sumerian loans to peasants quickly led to peonage, with farmers “forced into perpetual service in the lender’s household.” Fields would go unsown or not be harvested as farmers would leave their homes in order to avoid collection. The result was periodic debt amnesties.

The book covers everything from Neil Bush’s divorce to speculation that the major world religions were responses to the coin-using great empires of the “Axial Age” of 800 B.C.E. to 600 C.E. (“It would be foolish to argue that all Axial Age philosophy was simply a meditation on the nature of coinage, but …” runs one especially expansive passage.) There is a reexamination of Cortez’s conquest of the Aztecs being spurred on by his own debt, and vignettes about the functioning of debt and money in Madagascar, where Graeber did field anthropological research.

Debt’s deep dive into the whole history of civilization had a paradigm-shifting political point. Graeber wanted to show that “war, conquest and slavery … played a central role in converting human economies into market ones,” and that “historically, impersonal, commercial markets originate in theft.”

He wanted to show that not only did money not arise from barter but also that states and markets worked hand in hand in its creation. And more than that, he wanted to interrogate an economic and historical worldview that tried to “reduce all human relations to exchange, as if our ties to society, even to the cosmos itself, can be imagined on the terms of a business deal.”

He ended Debt with a call for “some kind of Biblical-style Jubilee: one that would affect both international debt and consumer debt.” This would not only

relieve so much genuine human suffering, but also … would be our way of reminding ourselves that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements and that if democracy is to mean anything, it is the ability to all agree to arrange things in a different way.


Thanks to Debt’s almost absurd good timing, as well as his own involvement in Occupy, Graeber became one of the most prominent leaders in the post-Occupy anti-debt movement. Or rather, in the spirit of an anarchist activist, he enabled others to take the leadGraeber’s efforts in helping start what would later become the Debt Collective were more like being “a facilitator or putting a band together,” Taylor, one of the group’s leaders, said.

The initial group that Graeber helped organize, Strike Debt, instituted a “rolling jubilee,” buying up medical debt and forgiving it. The group evolved to organize challenges to student loan debt incurred at for-profit colleges and has claimed to have helped eliminate over $1 billion of debt. Its efforts garnered the respectful attention of The New Yorker, which described the jubilee as “one of the few Occupy offshoots that has had a tangible effect on people’s lives.”

Debt Collective’s work would be echoed directly by the dueling calls from Elizabeth Warren and Bernie Sanders to cancel student loan debt during the 2016 presidential campaign.

The ideas in Debt also have been picked up by the Keynes-inspired thinkers that make up the school of Modern Monetary Theory, who see the state as a tool to mobilize the economy’s resources for the common good, unlimited by its ability to tax or take on debts and deficits. Alexandria Ocasio-Cortez referenced MMT when it came to funding the Green New Deal, and a leading MMT thinker, Stephanie Kelton, worked with Sanders. One of the brightest stars in the MMT firmament, Nathan Tankus, is an avid reader and admirer of Graeber.

If we end up winning the fight over debt, money, and deficits and manage to fundamentally reshape this society it will have been in no small part of because of Graeber’s work,” Tankus said.

And while he is credited with coming up with the slogan “We are the 99 percent”—perhaps Occupy’s most enduring rhetorical legacy—he claimed that he could only be held responsible for “the 99 percent,” while “two Spanish indignados and a Greek anarchist” were responsible for “We,” and only later did a “food-not-bombs veteran put the ‘are’ between them.”

This impulse to go beyond himself, to submerge himself in the collective, wasn’t foreign to his scholarly work, either. At the time of his death, Graeber was working with archaeologist David Wengrow on a history of social inequality. It’s supposed to cover the last 42,000 years.

How to Make Your Marriage More Financially Equal

Whether you’re newlyweds or not, your marriage can only benefit from a better balance that eases the stress on both of you. But be ready to talk — “we” statements only, please.

A year and a half of pandemic living has revealed — or reminded us of — some persistent patterns around money, gender, marriage and families. And they aren’t always pretty.

There is anecdotal evidence of men confiscating their wives’ federal relief checks, and data showing a link between financial stress and domestic violence. And millions of women felt they had no choice but to leave paid employment to provide care for children or other family members.

Matrimony and parenting involve compromise, without question (and sometimes, seemingly, without end). But it need not be disproportionate.

There are plenty of reasons to equalize the financial decision-making in your marriage — and this goes for every couple, heterosexual or not. If you’re among the many getting married now as part of the great pandemic wedding boom, consider adding another promise: that yours will be a financially egalitarian marriage.

Here is what that might mean.

When a new household is setting a financial baseline, it is almost impossible to avoid talking about power.

Rachel Sherman, a sociology professor at the New School for Social Research in New York, examined arrangements of authority in the marriages of the affluent in her book “Uneasy Street.”

While gender and the troubling norms that can come with it in heterosexual couples can play a role, she suggested that at least two additional vectors influenced the power dynamic.

The first involves the source of any household resources, including earnings, unpaid labor and inheritance. Who gets or takes credit, and for what? What privileges, if any, come with the answers to those questions?

The other is about spending styles — who has license to do what, and when and who decides? Confusion here can stem from having grown up in a family with a dysfunctional relationship to money.

Conflicting habits can cause real trouble, but understanding them is an important first step. “People are lucky if they have a partner who has the same ideas that they do,” Professor Sherman said.

Financial planners get to participate in many conversations with people who have recently married, and they can spot worrying patterns. One frequent issue: Only one partner speaks.

“They’ll often have a meeting with just one half of a couple,” said Marci Bair, a financial planner in San Diego.

More often than not, it’s the man in heterosexual couples who shows up or calls alone (or wants to), several advisers told me this week.

At Fyooz Financial Planning (pronounced “fuse,” as in joining together a couple’s portfolios and peccadilloes), that sort of exclusion or neglect isn’t allowed. Moreover, every couple meets with a couple: Dan and Natalie Slagle, who jointly run the business in Rochester, Minn.

It can feel a bit like a double date, and as on many dates, there are red flags. “They typically have to do with the pronouns that are used,” Mr. Slagle said. “‘You’ as opposed to ‘we.’”

Ms. Slagle picked up the thread. “If they are not seeing themselves as a partnership, it’s going to be very difficult to create a successful financial plan for two people,” she said.

So consider your pronouns, and not just if you’re talking to a professional. Be a united front.

Even if you’re both present and equally engaged in any conversations about your money, many couples have just one person running all of the household’s finances.

“I call it the financial spouse and the nonfinancial spouse,” said Annelise Bretthauer, a financial planner in Hillsboro, Ore.

She’s generally not a fan of that setup or default, in part because of what can happen when a marriage ends, either when one spouse dies or when the relationship goes sour.

Much of Ms. Bretthauer’s pro bono work is with recently divorced women, who may have spent decades as the nonfinancial spouse.

“And then they’re drinking from a fire hose,” she said. “They don’t know how to make the best decisions in the divorce because they haven’t been privy to financial information for years.”

You may be certain about the wisdom of a joint bank account and rigorous spending accountability. Or perhaps you prefer a trio of virtual piggy banks labeled Yours, Mine and Ours. Both can work.

“Whenever people ask, I say that the right way to organize your money is the way where you don’t fight about it,” said Alexandra Killewald, a sociology professor at Harvard.

Keeping your finances separate doesn’t prevent you or your spouse from inadvertently picking that fight.

“If you have separate accounts, how separate are they really?” asked Lazetta Rainey Braxton, a financial planner in Brooklyn. “Can you spend with no judgment? However you want? Only within your shared value system?”

Be wary about how you talk — or even think — about whose income is for what.

Viviana A. Zelizer, a sociology professor at Princeton, spent years examining how couples would assign labels to the money that came in. Often, women’s earnings fell into particular patterns of allocation — for child care, vacations or summer camps and not for, say, the mortgage.

“Somehow they were a bit different, and maybe more secondary, than the big money items,” she said. “I would tell couples to notice how powerful this is.”

If you have at least one joint account — to pay for all shared expenses — perhaps no one will feel that their income is less relevant.

For all your efforts to have a financially equal marriage, inequality in the outside world may come through the door each night and hover over the dinner table.

Ms. Braxton, the financial planner in Brooklyn, encourages clients to consider the following set of possibilities and the sensitivity that is necessary to manage them in a marriage.

Perhaps you earn less, on average, because you are Black. Perhaps you earn less, on average, because you are female. And perhaps you feel more vulnerable to job loss.

A couple of things could happen at home. You might save and invest more conservatively out of fear. Or you might spend with abandon on occasion, just to cut loose.

“People in that situation need planning to rise above what they are experiencing,” Ms. Braxton said. For instance, you might build savings backstops as a “cushion” fund for softer landings or as a kind of “go to hell” account.

If any of the above sounds familiar, it doesn’t make you retrograde. After all, there’s a decent chance that you’ve never done marriage before. Change, however, may actually put you at ease.

Husbands who have taken on traditional financial gender roles can feel a palpable sense of relief when they are not operating solo, especially if the household finances grow more complicated over time, said Ms. Bair, the financial planner in San Diego.

“It’s all on their shoulders,” she said. “And they know that they’re probably not fully equipped for it, either.”

Hiring professional help may bring some comfort, too, but it doesn’t obviate the need for deep conversation with your spouse. Ms. Bretthauer said the best financial planners were in the behavior-change business, not the stock-twirling one.

“Are you looking for someone who will tell you what to do?” she said. “Then don’t hire me.”

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