On Jan 17, 2012, at 12:06 AM, Michael Pollak wrote:
> 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.
Yes, I think this is his anarchist bias showing. The state becomes the villain, and a lot of historical specificity gets lost. He's also into cycles - commodity money, fiat money - which becomes a kind of eternal recurrence. If you point to the uniqueness of capitalism, it apparently makes you a dogmatic Marxist.
> 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.
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> 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.
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> 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.
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> And of course absolutely no one in the world believes that.
Actually the Fed seems to. I can't find the references now, but as I recall they basically think US reserve currency status is nice but not crucial.
Doug