Can we have property rights without violence?

Apr 23, JDN 2457867

Most likely, you have by now heard of the incident on a United Airlines flight, where a man was beaten and dragged out of a plane because the airline decided that they needed more seats than they had. In case you somehow missed all the news articles and memes, the Wikipedia page on the incident is actually fairly good.

There is a lot of gossip about the passenger’s history, which the flight crew couldn’t possibly have known and is therefore irrelevant. By far the best take I’ve seen on the ethical and legal implications of the incident can be found on Naked Capitalism, so if you do want to know more about it I highly recommend starting there. Probably the worst take I’ve read is on The Pilot Wife Life, but I suppose if you want a counterpoint there you go.

I really have little to add on this particular incident; instead my goal here is to contextualize it in a broader discussion of property rights in general.

Despite the fact that what United’s employees and contractors did was obviously unethical and very likely illegal, there are still a large number of people defending their actions. Aiming for a Woodman if not an Ironman, the most coherent defense I’ve heard offered goes something like this:

Yes, what United did in this particular case was excessive. But it’s a mistake to try to make this illegal, because any regulation that did so would necessarily impose upon fundamental property rights. United owns the airplane; they can set the rules for who is allowed to be on that airplane. And once they set those rules, they need to be able to enforce them. Sometimes, however distasteful it may be, that enforcement will require violence. But property rights are too important to give up. Would you want to live in a society where anyone could just barge into your home and you were not allowed to use force to remove them?

Understood in this context, United contractors calling airport security to get a man dragged off of a plane isn’t an isolated act of violence for no reason; it is part of a broader conflict between the protection of property rights and the reduction of violence. “Stand your ground” laws, IMF “structural adjustment” policies, even Trump’s wall against immigrants can be understood as part of this broader conflict.

One very far-left approach to resolving such a conflict—as taken by the Paste editorial “You’re not mad at United Airlines; you’re mad at America”—is to fall entirely on the side of nonviolence, and say essentially that any system which allows the use of violence to protect property rights is fundamentally corrupt and illegitimate.

I can see why such a view is tempting. It’s simple, for one thing, and that’s always appealing. But if you stop and think carefully about the consequences of this hardline stance, it becomes clear that such a system would be unsustainable. If we could truly never use violence ever to protect any property rights, that would mean that property law in general could no longer be enforced. People could in fact literally break into your home and steal your furniture, and you’d have no recourse, because the only way to stop them would involve either using violence yourself or calling the police, who would end up using violence. Property itself would lose all its meaning—and for those on the far-left who think that sounds like a good thing, I want you to imagine what the world would look like if the only things you could ever use were the ones you could physically hold onto, where you’d leave home never knowing whether your clothes or your food would still be there when you came back. A world without property sounds good if you are imagining that the insane riches of corrupt billionaires would collapse; but if you stop and think about coming home to no food and no furniture, perhaps it doesn’t sound so great. And while it does sound nice to have a world where no one is homeless because they can always find a place to sleep, that may seem less appealing if your home is the one that a dozen homeless people decide to squat in.

The Tragedy of the Commons would completely destroy any such economic system; the only way to sustain it would be either to produce such an enormous abundance of wealth that no amount of greed could ever overtake it, or, more likely, somehow re-engineer human brains so that greed no longer exists. I’m not aware of any fundamental limits on greed; as long as social status increases monotonically with wealth, there will be people who try to amass as much wealth as they possibly can, far beyond what any human being could ever actually consume, much less need. How do I know this? Because they already exist; we call them “billionaires”. A billionaire, essentially by definition, is a hoarder of wealth who owns more than any human being could consume. If someone happens upon a billion dollars and immediately donates most of it to charity (as J.K. Rowling did), they can escape such a categorization; and if they use the wealth to achieve grand visionary ambitions—and I mean real visions, not like Steve Jobs but like Elon Musk—perhaps they can as well. Saving the world from climate change and colonizing Mars are the sort of projects that really do take many billions of dollars to achieve. (Then again, shouldn’t our government be doing these things?) And if they just hold onto the wealth or reinvest it to make even more, a billionaire is nothing less than a hoarder, seeking gratification and status via ownership itself.

Indeed, I think the maximum amount of wealth one could ever really need is probably around $10 million in today’s dollars; with that amount, even a very low-risk investment portfolio could supply enough income to live wherever you want, wear whatever you want, drive whatever you want, eat whatever you want, travel whenever you want. At even a 5% return, that’s $500,000 per year to spend without ever working or depleting your savings. At 10%, you’d get a million dollars a year for sitting there and doing nothing. And yet there are people with one thousand times as much wealth as this.

But not all property is of this form. I was about to say “the vast majority” is not, but actually that’s not true; a large proportion of wealth is in fact in the form of capital hoarded by the rich. Indeed, about 50% of the world’s wealth is owned by the richest 1%. (To be fair, the world’s top 1% is a broader category than one might think; the top 1% in the world is about the top 5% in the US; based on census data, that puts the cutoff at about $250,000 in net wealth.) But the majority of people have wealth in some form, and would stand to suffer if property rights were not enforced at all.

So we might be tempted to the other extreme, as the far-right seems to be, and say that any force is justified in the protection of fundamental property rights—that if vagrants step onto my land, I am well within my rights to get out my shotgun. (You know, hypothetically; not that I own a shotgun, or, for that matter, any land.) This seems to appeal especially to those who nostalgize the life on the frontier, “living off the land” (often losing family members to what now seem like trivial bacterial illnesses), “self-sufficient” (with generous government subsidies), in the “unspoiled wilderness” (from which the Army had forcibly removed Native Americans). Westerns have given us this sense that frontier life offers a kind of freedom and adventure that this urbane civilization lacks. And I suppose I am a fan of at least one Western, since one should probably count Firefly.

Yet of course this is madness; no civilization could survive if it really allowed people to just arbitrarily “defend” whatever property claims they decided to make. Indeed, it’s really just the flip side of the coin; as we’ve seen in Somalia (oh, by the way, we’re deploying troops there again), not protecting property and allowing universal violence to defend any perceived property largely amount to the same thing. If anything, the far-left fantasy seems more appealing; at least then we would not be subject to physical violence, and could call upon the authorities to protect us from that. In the far-right fantasy, we could accidentally step on what someone else claims to be his land and end up shot in the head.

So we need to have rules about who can use violence to defend what property and why. And that, of course, is complicated. We can start by having a government that defines property claims and places limits on their enforcement; but that still leaves the question of which sort of property claims and enforcement mechanisms the government should allow.

I think the principle should essentially be minimum force. We do need to protect property rights, yes; but if there is a way of doing so without committing violence, that’s the way we should do it. And if we do need to use violence, we should use as little as possible.

In theory we already do this: We have “rules of engagement” for the military and “codes of conduct” for police. But in practice, these rules are rarely enforced; they only get applied to really extreme violations, and sometimes not even then. The idea seems to be that enforcing strict rules on our soldiers and police officers constitutes disloyalty, even treason. We should “let them do their jobs”. This is the norm that must change. Those rules are their jobs. If they break those rules, they aren’t doing their jobs—they’re doing something else, something that endangers the safety and security of our society. The disloyalty is not in investigating and enforcing rules against police misconduct—the disloyalty is in police misconduct. If you want to be a cop but you’re not willing to follow the rules, you don’t actually want to be a cop—you want to be a bully with a gun and a badge.

And of course, one need not be a government agency in order to use excessive force. Many private corporations have security forces of their own, which frequently abuse and assault people. Most terrifying of all, there are whole corporations of “private military contractors”—let’s call them what they are: mercenaries—like Academi, formerly known as Blackwater. The whole reason these corporations even exist is to evade regulations on military conduct, and that is why they must be eliminated.

In the United case, there was obviously a nonviolent answer; all they had to do was offer to pay people to give up their seats, and bid up the price until enough people left. Someone would have left eventually; there clearly was a market-clearing price. That would have cost $2,000, maybe $5,000 at the most—a lot better than the $255 million lost in United’s stock value as a result of the bad PR.

If a homeless person decides to squat in your house, yes, perhaps you’d be justified in calling the police to remove them. Clearly you’re under no obligation to provide them room and board indefinitely. But there may be better solutions: Is there a homeless shelter in the area? Could you give them a ride there, or at least bus fare?

When immigrants cross our borders, may we turn them away? Now, here’s one where I’m pretty strongly tempted to go all the way and say we have no right whatsoever to stop them. There are no requirements for being born into citizenship, after all—so on what grounds do we add requirements to acquire citizenship? Is there something in the water of the Great Lakes and the Mississippi River that, when you drink it for 18 years (processed by municipal water systems of course; what are we, barbarians?), automatically makes you into a patriotic American? Does one become more law-abiding, or less capable of cruelty or fanaticism, by being brought into the world on one side of an imaginary line in the sand? If there are going to be requirements for citizenship, shouldn’t they be applied to everyone, and not just people who were born in the wrong place?

Yes, when we have no other choice, we must be prepared to use violence to defend property—because otherwise, there’s no such thing as property. But more often than not, we use violence when we didn’t need to, or use much more violence than was actually necessary. The principle that violence can be justified in defense of property does not entail that any violence is always justified in defense of property.

What is progress? How far have we really come?

JDN 2457534

It is a controversy that has lasted throughout the ages: Is the world getting better? Is it getting worse? Or is it more or less staying the same, changing in ways that don’t really constitute improvements or detriments?

The most obvious and indisputable change in human society over the course of history has been the advancement of technology. At one extreme there are techno-utopians, who believe that technology will solve all the world’s problems and bring about a glorious future; at the other extreme are anarcho-primitivists, who maintain that civilization, technology, and industrialization were all grave mistakes, removing us from our natural state of peace and harmony.

I am not a techno-utopian—I do not believe that technology will solve all our problems—but I am much closer to that end of the scale. Technology has solved a lot of our problems, and will continue to solve a lot more. My aim in this post is to convince you that progress is real, that things really are, on the whole, getting better.

One of the more baffling arguments against progress comes from none other than Jared Diamond, the social scientist most famous for Guns, Germs and Steel (which oddly enough is mainly about horses and goats). About seven months before I was born, Diamond wrote an essay for Discover magazine arguing quite literally that agriculture—and by extension, civilization—was a mistake.

Diamond fortunately avoids the usual argument based solely on modern hunter-gatherers, which is a selection bias if ever I heard one. Instead his main argument seems to be that paleontological evidence shows an overall decrease in health around the same time as agriculture emerged. But that’s still an endogeneity problem, albeit a subtler one. Maybe agriculture emerged as a response to famine and disease. Or maybe they were both triggered by rising populations; higher populations increase disease risk, and are also basically impossible to sustain without agriculture.

I am similarly dubious of the claim that hunter-gatherers are always peaceful and egalitarian. It does seem to be the case that herders are more violent than other cultures, as they tend to form honor cultures that punish all sleights with overwhelming violence. Even after the Industrial Revolution there were herder honor cultures—the Wild West. Yet as Steven Pinker keeps trying to tell people, the death rates due to homicide in all human cultures appear to have steadily declined for thousands of years.

I read an article just a few days ago on the Scientific American blog which included the following claim so astonishingly nonsensical it makes me wonder if the authors can even do arithmetic or read statistical tables correctly:

I keep reminding readers (see Further Reading), the evidence is overwhelming that war is a relatively recent cultural invention. War emerged toward the end of the Paleolithic era, and then only sporadically. A new study by Japanese researchers published in the Royal Society journal Biology Letters corroborates this view.

Six Japanese scholars led by Hisashi Nakao examined the remains of 2,582 hunter-gatherers who lived 12,000 to 2,800 years ago, during Japan’s so-called Jomon Period. The researchers found bashed-in skulls and other marks consistent with violent death on 23 skeletons, for a mortality rate of 0.89 percent.

That is supposed to be evidence that ancient hunter-gatherers were peaceful? The global homicide rate today is 62 homicides per million people per year. Using the worldwide life expectancy of 71 years (which is biasing against modern civilization because our life expectancy is longer), that means that the worldwide lifetime homicide rate is 4,400 homicides per million people, or 0.44%—that’s less than half the homicide rate of these “peaceful” hunter-gatherers. If you compare just against First World countries, the difference is even starker; let’s use the US, which has the highest homicide rate in the First World. Our homicide rate is 38 homicides per million people per year, which at our life expectancy of 79 years is 3,000 homicides per million people, or an overall homicide rate of 0.3%, slightly more than a third of this “peaceful” ancient culture. The most peaceful societies today—notably Japan, where these remains were found—have homicide rates as low as 3 per million people per year, which is a lifetime homicide rate of 0.02%, forty times smaller than their supposedly utopian ancestors. (Yes, all of Japan has fewer total homicides than Chicago. I’m sure it has nothing to do with their extremely strict gun control laws.) Indeed, to get a modern homicide rate as high as these hunter-gatherers, you need to go to a country like Congo, Myanmar, or the Central African Republic. To get a substantially higher homicide rate, you essentially have to be in Latin America. Honduras, the murder capital of the world, has a lifetime homicide rate of about 6.7%.

Again, how did I figure these things out? By reading basic information from publicly-available statistical tables and then doing some simple arithmetic. Apparently these paleoanthropologists couldn’t be bothered to do that, or didn’t know how to do it correctly, before they started proclaiming that human nature is peaceful and civilization is the source of violence. After an oversight as egregious as that, it feels almost petty to note that a sample size of a few thousand people from one particular region and culture isn’t sufficient data to draw such sweeping judgments or speak of “overwhelming” evidence.

Of course, in order to decide whether progress is a real phenomenon, we need a clearer idea of what we mean by progress. It would be presumptuous to use per-capita GDP, though there can be absolutely no doubt that technology and capitalism do in fact raise per-capita GDP. If we measure by inequality, modern society clearly fares much worse (our top 1% share and Gini coefficient may be higher than Classical Rome!), but that is clearly biased in the opposite direction, because the main way we have raised inequality is by raising the ceiling, not lowering the floor. Most of our really good measures (like the Human Development Index) only exist for the last few decades and can barely even be extrapolated back through the 20th century.

How about babies not dying? This is my preferred measure of a society’s value. It seems like something that should be totally uncontroversial: Babies dying is bad. All other things equal, a society is better if fewer babies die.

I suppose it doesn’t immediately follow that all things considered a society is better if fewer babies die; maybe the dying babies could be offset by some greater good. Perhaps a totalitarian society where no babies die is in fact worse than a free society in which a few babies die, or perhaps we should be prepared to accept some small amount of babies dying in order to save adults from poverty, or something like that. But without some really powerful overriding reason, babies not dying probably means your society is doing something right. (And since most ancient societies were in a state of universal poverty and quite frequently tyranny, these exceptions would only strengthen my case.)

Well, get ready for some high-yield truth bombs about infant mortality rates.

It’s hard to get good data for prehistoric cultures, but the best data we have says that infant mortality in ancient hunter-gatherer cultures was about 20-50%, with a best estimate around 30%. This is statistically indistinguishable from early agricultural societies.

Indeed, 30% seems to be the figure humanity had for most of history. Just shy of a third of all babies died for most of history.

In Medieval times, infant mortality was about 30%.

This same rate (fluctuating based on various plagues) persisted into the Enlightenment—Sweden has the best records, and their infant mortality rate in 1750 was about 30%.

The decline in infant mortality began slowly: During the Industrial Era, infant mortality was about 15% in isolated villages, but still as high as 40% in major cities due to high population densities with poor sanitation.

Even as recently as 1900, there were US cities with infant mortality rates as high as 30%, though the overall rate was more like 10%.

Most of the decline was recent and rapid: Just within the US since WW2, infant mortality fell from about 5.5% to 0.7%, though there remains a substantial disparity between White and Black people.

Globally, the infant mortality rate fell from 6.3% to 3.2% within my lifetime, and in Africa today, the region where it is worst, it is about 5.5%—or what it was in the US in the 1940s.

This precipitous decline in babies dying is the main reason ancient societies have such low life expectancies; actually once they reached adulthood they lived to be about 70 years old, not much worse than we do today. So my multiplying everything by 71 actually isn’t too far off even for ancient societies.

Let me make a graph for you here, of the approximate rate of babies dying over time from 10,000 BC to today:

Infant_mortality.png

Let’s zoom in on the last 250 years, where the data is much more solid:

Infant_mortality_recent.png

I think you may notice something in these graphs. There is quite literally a turning point for humanity, a kink in the curve where we suddenly begin a rapid decline from an otherwise constant mortality rate.

That point occurs around or shortly before 1800—that is, it occurs at industrial capitalism. Adam Smith (not to mention Thomas Jefferson) was writing at just about the point in time when humanity made a sudden and unprecedented shift toward saving the lives of millions of babies.

So now, think about that the next time you are tempted to say that capitalism is an evil system that destroys the world; the evidence points to capitalism quite literally saving babies from dying.

How would it do so? Well, there’s that rising per-capita GDP we previously ignored, for one thing. But more important seems to be the way that industrialization and free markets support technological innovation, and in this case especially medical innovation—antibiotics and vaccines. Our higher rates of literacy and better communication, also a result of raised standard of living and improved technology, surely didn’t hurt. I’m not often in agreement with the Cato Institute, but they’re right about this one: Industrial capitalism is the chief source of human progress.

Billions of babies would have died but we saved them. So yes, I’m going to call that progress. Civilization, and in particular industrialization and free markets, have dramatically improved human life over the last few hundred years.

In a future post I’ll address one of the common retorts to this basically indisputable fact: “You’re making excuses for colonialism and imperialism!” No, I’m not. Saying that modern capitalism is a better system (not least because it saves babies) is not at all the same thing as saying that our ancestors were justified in using murder, slavery, and tyranny to force people into it.

Yes, but what about the next 5000 years?

JDN 2456991 PST 1:34.

This week’s post will be a bit different: I have a book to review. It’s called Debt: The First 5000 Years, by David Graeber. The book is long (about 400 pages plus endnotes), but such a compelling read that the hours melt away. “The First 5000 Years” is an incredibly ambitious subtitle, but Graeber actually manages to live up to it quite well; he really does tell us a story that is more or less continuous from 3000 BC to the present.

So who is this David Graeber fellow, anyway? None will be surprised that he is a founding member of Occupy Wall Street—he was in fact the man who coined “We are the 99%”. (As I’ve studied inequality more, I’ve learned he made a mistake; it really should be “We are the 99.99%”.) I had expected him to be a historian, or an economist; but in fact he is an anthropologist. He is looking at debt and its surrounding institutions in terms of a cultural ethnography—he takes a step outside our own cultural assumptions and tries to see them as he might if he were encountering them in a foreign society. This is what gives the book its freshest parts; Graeber recognizes, as few others seem willing to, that our institutions are not the inevitable product of impersonal deterministic forces, but decisions made by human beings.

(On a related note, I was pleasantly surprised to see in one of my economics textbooks yesterday a neoclassical economist acknowledging that the best explanation we have for why Botswana is doing so well—low corruption, low poverty by African standards, high growth—really has to come down to good leadership and good policy. For once they couldn’t remove all human agency and mark it down to grand impersonal ‘market forces’. It’s odd how strong the pressure is to do that, though; I even feel it in myself: Saying that civil rights progressed so much because Martin Luther King was a great leader isn’t very scientific, is it? Well, if that’s what the evidence points to… why not? At what point did ‘scientific’ come to mean ‘human beings are helplessly at the mercy of grand impersonal forces’? Honestly, doesn’t the link between science and technology make matters quite the opposite?)

Graeber provides a new perspective on many things we take for granted: in the introduction there is one particularly compelling passage where he starts talking—with a fellow left-wing activist—about the damage that has been done to the Third World by IMF policy, and she immediately interjects: “But surely one has to pay one’s debts.” The rest of the book is essentially an elaboration on why we say that—and why it is absolutely untrue.

Graeber has also made me think quite a bit differently about Medieval society and in particular Medieval Islam; this was certainly the society in which the writings of Socrates were preserved and algebra was invented, so it couldn’t have been all bad. But in fact, assuming that Graeber’s account is accurate, Muslim societies in the 14th century actually had something approaching the idyllic fair and free market to which all neoclassicists aspire. They did so, however, by rejecting one of the core assumptions of neoclassical economics, and you can probably guess which one: the assumption that human beings are infinite identical psychopaths. Instead, merchants in Medieval Muslim society were held to high moral standards, and their livelihood was largely based upon the reputation they could maintain as upstanding good citizens. Theoretically they couldn’t even lend at interest, though in practice they had workarounds (like payment in installments that total slightly higher than the original price) that amounted to low rates of interest. They did not, however, have anything approaching the levels of interest that we have today in credit cards at 29% or (it still makes me shudder every time I think about it) payday loans at 400%. Paying on installments to a Muslim merchant would make you end up paying about a 2% to 4% rate of interest—which sounds to me almost exactly what it should be, maybe even a bit low because we’re not taking inflation into account. In any case, the moral standards of society kept people from getting too poor or too greedy, and as a result there was little need for enforcement by the state. In spite of myself I have to admit that may not have been possible without the theological enforcement provided by Islam.
Graeber also avoids one of the most common failings of anthropologists, the cultural relativism that makes them unwilling to criticize any cultural practice as immoral even when it obviously is (except usually making exceptions for modern Western capitalist imperialism). While at times I can see he was tempted to go that way, he generally avoids it; several times he goes out of his way to point out how women were sold into slavery in hunter-gatherer tribes and how that contributed to the institutions of chattel slavery that developed once Western powers invaded.

Anthropologists have another common failing that I don’t think he avoids as well, which is a primitivist bent in which anthropologists speak of ancient societies as idyllic and modern societies as horrific. That’s part of why I said ‘if Graber’s account is accurate,’ because I’m honestly not sure it is. I’ll need to look more into the history of Medieval Islam to be sure. Graeber spends a great deal of time talking about how our current monetary system is fundamentally based on threats of violence—but I can tell you that I have honestly never been threatened with violence over money in my entire life. Not by the state, not by individuals, not by corporations. I haven’t even been mugged—and that’s the sort of the thing the state exists to prevent. (Not that I’ve never been threatened with violence—but so far it’s always been either something personal, or, more often, bigotry against LGBT people.) If violence is the foundation of our monetary system, then it’s hiding itself extraordinarily well. Granted, the violence probably pops up more if you’re near the very bottom, but I think I speak for most of the American middle class when I say that I’ve been through a lot of financial troubles, but none of them have involved any guns pointed at my head. And you can’t counter this by saying that we theoretically have laws on the books that allow you to be arrested for financial insolvency—because that’s always been true, in fact it’s less true now than any other point in history, and Graeber himself freely admits this. The important question is how many people actually get violence enforced upon them, and at least within the United States that number seems to be quite small.

Graeber describes the true story of the emergence of money historically, as the result of military conquest—a way to pay soldiers and buy supplies when in an occupied territory where nobody trusts you. He demolishes the (always fishy) argument that money emerged as a way of mediating a barter system: If I catch fish and he makes shoes and I want some shoes but he doesn’t want fish right now, why not just make a deal to pay later? This is of course exactly what they did. Indeed Graeber uses the intentionally provocative word communism to describe the way that resources are typically distributed within families and small villages—because it basically is “from each according to his ability, to each according to his need”. (I would probably use the less-charged word “community”, but I have to admit that those come from the same Latin root.) He also describes something I’ve tried to explain many times to neoclassical economists to no avail: There is equally a communism of the rich, a solidarity of deal-making and collusion that undermines the competitive market that is supposed to keep the rich in check. Graeber points out that wine, women and feasting have been common parts of deals between villages throughout history—and yet are still common parts of top-level business deals in modern capitalism. Even as we claim to be atomistic rational agents we still fall back on the community norms that guided our ancestors.

Another one of my favorite lines in the book is on this very subject: “Why, if I took a free-market economic theorist out to an expensive dinner, would that economist feel somewhat diminished—uncomfortably in my debt—until he had been able to return the favor? Why, if he were feeling competitive with me, would he be inclined to take me someplace even more expensive?” That doesn’t make any sense at all under the theory of neoclassical rational agents (an infinite identical psychopath would just enjoy the dinner—free dinner!—and might never speak to you again), but it makes perfect sense under the cultural norms of community in which gifts form bonds and generosity is a measure of moral character. I also got thinking about how introducing money directly into such exchanges can change them dramatically: For instance, suppose I took my professor out to a nice dinner with drinks in order to thank him for writing me recommendation letters. This seems entirely appropriate, right? But now suppose I just paid him $30 for writing the letters. All the sudden it seems downright corrupt. But the dinner check said $30 on it! My bank account debit is the same! He might go out and buy a dinner with it! What’s the difference? I think the difference is that the dinner forms a relationship that ties the two of us together as individuals, while the cash creates a market transaction between two interchangeable economic agents. By giving my professor cash I would effectively be saying that we are infinite identical psychopaths.

While Graeber doesn’t get into it, a similar argument also applies to gift-giving on holidays and birthdays. There seriously is—I kid you not—a neoclassical economist who argues that Christmas is economically inefficient and should be abolished in favor of cash transfers. He wrote a book about it. He literally does not understand the concept of gift-giving as a way of sharing experiences and solidifying relationships. This man must be such a joy to have around! I can imagine it now: “Will you play catch with me, Daddy?” “Daddy has to work, but don’t worry dear, I hired a minor league catcher to play with you. Won’t that be much more efficient?”

This sort of thing is what makes Debt such a compelling read, and Graeber does make some good points and presents a wealth of historical information. So now it’s time to talk about what’s wrong with the book, the things Graeber gets wrong.

First of all, he’s clearly quite ignorant about the state-of-the-art in economics, and I’m not even talking about the sort of cutting-edge cognitive economics experiments I want to be doing. (When I read what Molly Crockett has been working on lately in the neuroscience of moral judgments, I began to wonder if I should apply to University College London after all.)

No, I mean Graeber is ignorant of really basic stuff, like the nature of government debt—almost nothing of what I said in that post is controversial among serious economists; the equations certainly aren’t, though some of the interpretation and application might be. (One particularly likely sticking point called “Ricardian equivalence” is something I hope to get into in a future post. You already know the refrain: Ricardian equivalence only happens if you live in a world of infinite identical psychopaths.) Graeber has internalized the Republican talking points about how this is money our grandchildren will owe to China; it’s nothing of the sort, and most of it we “owe” to ourselves. In a particularly baffling passage Graeber talks about how there are no protections for creditors of the US government, when creditors of the US government have literally never suffered a single late payment in the last 200 years. There are literally no creditors in the world who are more protected from default—and only a few others that reach the same level, such as creditors to the Bank of England.

In an equally-bizarre aside he also says in one endnote that “mainstream economists” favor the use of the gold standard and are suspicious of fiat money; exactly the opposite is the case. Mainstream economists—even the neoclassicists with whom I have my quarrels—are in almost total agreement that a fiat monetary system managed by a central bank is the only way to have a stable money supply. The gold standard is the pet project of a bunch of cranks and quacks like Peter Schiff. Like most quacks, the are quite vocal; but they are by no means supported by academic research or respected by top policymakers. (I suppose the latter could change if enough Tea Party Republicans get into office, but so far even that hasn’t happened and Janet Yellen continues to manage our fiat money supply.) In fact, it’s basically a consensus among economists that the gold standard caused the Great Depression—that in addition to some triggering event (my money is on Minsky-style debt deflation—and so is Krugman’s), the inability of the money supply to adjust was the reason why the world economy remained in such terrible shape for such a long period. The gold standard has not been a mainstream position among economists since roughly the mid-1980s—before I was born.

He makes this really bizarre argument about how because Korea, Japan, Taiwan, and West Germany are major holders of US Treasury bonds and became so under US occupation—which is indisputably true—that means that their development was really just some kind of smokescreen to sell more Treasury bonds. First of all, we’ve never had trouble selling Treasury bonds; people are literally accepting negative interest rates in order to have them right now. More importantly, Korea, Japan, Taiwan, and West Germany—those exact four countries, in that order—are the greatest economic success stories in the history of the human race. West Germany was rebuilt literally from rubble to become once again a world power. The Asian Tigers were even more impressive, raised from the most abject Third World poverty to full First World high-tech economy status in a few generations. If this is what happens when you buy Treasury bonds, we should all buy as many Treasury bonds as we possibly can. And while that seems intuitively ridiculous, I have to admit, China’s meteoric rise also came with an enormous investment in Treasury bonds. Maybe the secret to economic development isn’t physical capital or exports or institutions; nope, it’s buying Treasury bonds. (I don’t actually believe this, but the correlation is there, and it totally undermines Graeber’s argument that buying Treasury bonds makes you some kind of debt peon.)

Speaking of correlations, Graeber is absolutely terrible at econometrics; he doesn’t even seem to grasp the most basic concepts. On page 366 he shows this graph of the US defense budget and the US federal debt side by side in order to argue that the military is the primary reason for our national debt. First of all, he doesn’t even correct for inflation—so most of the exponential rise in the two curves is simply the purchasing power of the dollar declining over time. Second, he doesn’t account for GDP growth, which is most of what’s left after you account for inflation. He has two nonstationary time-series with obvious exponential trends and doesn’t even formally correlate them, let alone actually perform the proper econometrics to show that they are cointegrated. I actually think they probably are cointegrated, and that a large portion of national debt is driven by military spending, but Graeber’s graph doesn’t even begin to make that argument. You could just as well graph the number of murders and the number of cheesecakes sold, each on an annual basis; both of them would rise exponentially with population, thus proving that cheesecakes cause murder (or murders cause cheesecakes?).

And then where Graeber really loses me is when he develops his theory of how modern capitalism and the monetary and debt system that go with it are fundamentally corrupt to the core and must be abolished and replaced with something totally new. First of all, he never tells us what that new thing is supposed to be. You’d think in 400 pages he could at least give us some idea, but no; nothing. He apparently wants us to do “not capitalism”, which is an infinite space of possible systems, some of which might well be better, but none of which can actually be implemented without more specific ideas. Many have declared that Occupy has failed—I am convinced that those who say this appreciate neither how long it takes social movements to make change, nor how effective Occupy has already been at changing our discourse, so that Capital in the Twenty-First Century can be a bestseller and the President of the United States can mention income inequality and economic mobility in his speeches—but insofar as Occupy has failed to achieve its goals, it seems to me that this is because it was never clear just what Occupy’s goals were to begin with. Now that I’ve read Graeber’s work, I understand why: He wanted it that way. He didn’t want to go through the hard work (which is also risky: you could be wrong) of actually specifying what this new economic system would look like; instead he’d prefer to find flaws in the current system and then wait for someone else to figure out how to fix them. That has always been the easy part; any human system comes with flaws. The hard part is actually coming up with a better system—and Graeber doesn’t seem willing to even try.

I don’t know exactly how accurate Graeber’s historical account is, but it seems to check out, and even make sense of some things that were otherwise baffling about the sketchy account of the past I had previously learned. Why were African tribes so willing to sell their people into slavery? Well, because they didn’t think of it as their people—they were selling captives from other tribes taken in war, which is something they had done since time immemorial in the form of slaves for slaves rather than slaves for goods. Indeed, it appears that trade itself emerged originally as what Graeber calls a “human economy”, in which human beings are literally traded as a fungible commodity—but always humans for humans. When money was introduced, people continued selling other people, but now it was for goods—and apparently most of the people sold were young women. So much of the Bible makes more sense that way: Why would Job be all right with getting new kids after losing his old ones? Kids are fungible! Why would people sell their daughters for goats? We always sell women! How quickly do we flirt with the unconscionable, when first we say that all is fungible.

One of Graeber’s central points is that debt came long before money—you owed people apples or hours of labor long before you ever paid anybody in gold. Money only emerged when debt became impossible to enforce, usually because trade was occurring between soldiers and the villages they had just conquered, so nobody was going to trust anyone to pay anyone back. Immediate spot trades were the only way to ensure that trades were fair in the absence of trust or community. In other words, the first use of gold as money was really using it as collateral. All of this makes a good deal of sense, and I’m willing to believe that’s where money originally came from.

But then Graeber tries to use this horrific and violent origin of money—in war, rape, and slavery, literally some of the worst things human beings have ever done to one another—as an argument for why money itself is somehow corrupt and capitalism with it. This is nothing short of a genetic fallacy: I could agree completely that money had this terrible origin, and yet still say that money is a good thing and worth preserving. (Indeed, I’m rather strongly inclined to say exactly that.) The fact that it was born of violence does not mean that it is violence; we too were born of violence, literally millions of years of rape and murder. It is astronomically unlikely that any one of us does not have a murderer somewhere in our ancestry. (Supposedly I’m descended from Julius Caesar, hence my last name Julius—not sure I really believe that—but if so, there you go, a murderer and tyrant.) Are we therefore all irredeemably corrupt? No. Where you come from does not decide what you are or where you are going.

In fact, I could even turn the argument around: Perhaps money was born of violence because it is the only alternative to violence; without money we’d still be trading our daughters away because we had no other way of trading. I don’t think I believe that either; but it should show you how fragile an argument from origin really is.

This is why the whole book gives this strange feeling of non sequitur; all this history is very interesting and enlightening, but what does it have to do with our modern problems? Oh. Nothing, that’s what. The connection you saw doesn’t make any sense, so maybe there’s just no connection at all. Well all right then. This was an interesting little experience.

This is a shame, because I do think there are important things to be said about the nature of money culturally, philosophically, morally—but Graeber never gets around to saying them, seeming to think that merely pointing out money’s violent origins is a sufficient indictment. It’s worth talking about the fact that money is something we made, something we can redistribute or unmake if we choose. I had such high expectations after I read that little interchange about the IMF: Yes! Finally, someone gets it! No, you don’t have to repay debts if that means millions of people will suffer! But then he never really goes back to that. The closest he veers toward an actual policy recommendation is at the very end of the book, a short section entitled “Perhaps the world really does owe you a living” in which he very briefly suggests—doesn’t even argue for, just suggests—that perhaps people do deserve a certain basic standard of living even if they aren’t working. He could have filled 50 pages arguing the ins and outs of a basic income with graphs and charts and citations of experimental data—but no, he just spends a few paragraphs proposing the idea and then ends the book. (I guess I’ll have to write that chapter myself; I think it would go well in The End of Economics, which I hope to get back to writing in a few months—while I also hope to finally publish my already-written book The Mathematics of Tears and Joy.)

If you want to learn about the history of money and debt over the last 5000 years, this is a good book to do so—and that is, after all, what the title said it would be. But if you’re looking for advice on how to improve our current economic system for the benefit of all humanity, you’ll need to look elsewhere.

And so in the grand economic tradition of reducing complex systems into a single numeric utility value, I rate Debt: The First 5000 Years a 3 out of 5.