On Mon, 16 Jan 2012, Mike Beggs wrote:
> I've stayed out of this discussion because I'm only about halfway
> through Graeber's book
Haha. You're so fastidious. You think any of the rest of us have finished reading it yet? :-)
Reading the whole book carefully in an argument like this is almost cheating :-)
Seriously though, this is a hugely pleasuable release, getting to vent pent up half-made thoughts about this book. If we all had to wait until the end, we'd forget half of them. Arguing in midstream is a form of collective critical reading. We'll all go back and read the rest with an eye to testing arguments we might not have thought of or developed in such detail.
> I think Keynes' arguments there are based on a fallacy that Graeber
> also seems guilty of (but I should reserve my judgement until I have
> read the rest) - that to find the historical origins of some social
> phenomenon is to have found its essence.
I think Graeber does display this fault in places. It was (appropriately) almost an ancestral vice of big picture historical anthropologists of yore.
But I think don't think we have to choose between Graeber's view and that of sophisticated leftist economics. I think they are supplementary.
Graeber's story of the origins of money in the state and imperialism (rather than the dynamics of generalized commodity exchange) doesn't illuminate what's new in capitalist credit markets. I agree with you, Doug and Julio that in that department, capitalism takes what comes before and gives it utterly new dynamics. After generalized commodity production arises, finance is connected to it at the heart, and the fact that it once existed separately doesn't mean it can be treated as independent and separable now or in the future. States might once have been omnipotent Leviathans who could dictate their currency, but they aren't now.
But IMHO (and to repeat, I haven't finished the book either -- although like most of the rest of you have supplemented it with the excellent interviews with Graeber by Doug and Sasha Lilley) the dynamics Graeber has unearthed seem to provide a frame for understanding several hugely central things that economics has never been very good at explaining (unless I've missed it?): the importance of the reserve currency and it's relation to the military power of a hegemon.
Mainstream economics is simply flately baffled by why anyone would care about a reserve currency. Krugman drags out his argument once every couple years to show that all that matters is earnings on seignorage, and they are a risibly small percentage of GDP, and when you add in the costs of being a hegemon, it's a wash or a loss. And certainly nothing to worry about.
And of course absolutely no one in the world believes that.
Has Marxist economics ever come up with a better explanation? AFIACT we believe it's got something to do with imperalism. But after that it's just been one ad hoc theory of imperialism after another, most of them tendentious and strained.
IIUC, Doug has had the same rough and ready explanation for decades now, and it has always made the best sense to me: that having the reserve currency is very important because it allows you to borrow in your own currency. But it's vitally tied up with military power. That's the reason why the US dollar is the reserve currency. And that's why US military power is worth so much to us and why we are willing to "waste" so much money on it.
Graeber's story seems to me to provide the elements for making that rough and ready explanation more systematic.
That seems like a big contribution.
And if that can be worked out, it might perhaps also to aid in understanding national debts, which aren't exactly like capitalist debts, and perhaps in some ways do exhibit old fashioned debt and tribute situations.
All of these seem like supplements to improve our understanding in areas where the standard model lags way behind our common sense and journalistic understanding.
Michael