The premise – perhaps the mythology – of democratic systems is that the system that emerges from a popular process reflects the free will of the democratically represented.
Meantime, capitalism proposes that our behaviour is essentially determined by a kind of natural law; the law of the market. Market determinism vs free will: which will win?
This opposition has one obvious conclusion: democracy is impossible under a truly market-determined society. Could a democratic population get rid of capitalism?
No. The reason isn’t very mysterious: that is, if capitalism’s laws are natural. And more than any other law, we mean the law that people pursue their self-interest – then the laws remain even if we ignore them. Ignoring gravity or friction doesn’t allow us to fly or glide effortlessly; it simply means that we try to exert our will in opposition to a greater reality that we choose to ignore at our peril. We may believe that we exert free will when we cast our vote; but over time, and across mass demographics, market logic must supersede those impulses.
The moral of the story seems one we should accept: the inflexible nature of the universe – market realities – will always overwhelm, and even crush the dreams of utopias that humans are forever indulging in. Dreams like living a comfortable life of sufficiency and security, in the midst of a society awash in excess wealth; to be housed decently in a city full of empty apartments.
In the various books by David Graeber that I’ve been reading recently, the subjects he covers are very much at the nexus between economics and governance. His approach is anthropological. On a few occasions, he makes the point that it’s a kind of economic anthropology, or perhaps an anthropology of economics.
I’ve only knowingly met one anthropologist – actually, a sociologist, but one who started out in anthropology. He remains memorable because he was the only person I ever met who had a working knowledge of Thorstein Veblen.
Veblen is a figure who in many ways reminds me of Graeber; he also had a kind of economic anthropology as his area of study. In his lifetime (latter half of the nineteenth century until the mid twentieth, roughly), Veblen was renowned as an economist, not so much as an anthropologist. What he proposed, anthropologically, was conventional wisdom: it was the conclusions that he drew from those accepted ideas that were startling.
But as my sociologist acquaintance told me, in the current era, his importance as a speculative anthropologist has put him since his death, in the pantheon of sociology and anthropology’s thinkers; below Weber and Levi-Strauss, but still important.
Meantime, he’s now completely ignored as an economist. Known today only for his phrase “conspicuous consumption”, he was nevertheless a leading voice articulating the complexities of many issues, including two of huge importance in the era he wrote (1900 to 1930, again roughly): those were the aftermath of slavery in the U.S. post-Reconstruction, and the incipient demand by women for full inclusion in society.
This proceeded from the issue of suffrage, but extended to women’s property ownership, economic inclusion, qualification for office and the judiciary, and full participation in advanced education both as students and as researchers and professors.
Veblen said the role of the woman in primitive society anticipates the role of the slave; both stripped of power and removed from the decision making functions of the society they are in.
Essentially, he said that in the prehistoric era before agriculture and settlement, nomadic hunter-gatherers understood that the group fertility of their small clans, facing constant adversity, depended far more on the women than the men; so men could die out to almost the last of their number with no effect on the group’s ability to reproduce and increase; while a much smaller loss of women able to bear children would condemn the group to almost certain extinction.
Thus, (and this was the startling point, in the era of Birth of a Nation) rational principles had prehistorically demanded that men take the greatest risk, as hunters and warriors, and in the settling of disputes where force might come into play. Out of this impulse to preserve group fertility by preserving women from harm grew the formalization through myths and taboos that subordinated women into roles without power, i.e. the proto-slave.
There are a couple of interesting things Veblen does here. One is the assumption of group self-interest which pre-empts individual self-interest. The reason men, and not women are forced into the riskiest actions, including risk of death, is not to do with self-interest, but the shared interest of the collective. That made Veblen, as an economist, a challenge to the underlying understanding of human motivation that the classical economics of Adam Smith proposed.
But more importantly, if you bought into Veblen’s speculative anthropology – and again, what he assumed comported well with the general understanding of how primitive forms of human society had operated – it made the idea of capitalism’s claim to reflect natural laws of the universe no longer prima facie true.
And there’s a third point, which is that Veblen’s rules were a third option in the opposition of democratic and economic primacy in shaping society: the whole system of society he described existed to eliminate democracy, by removing women’s voices from it; but also (as I said), requiring that those with a voice (the men) would make decisions that didn’t necessarily reflect their individual best interests, or even the interests of their group (for example, expecting that they be prepared to die en masse, to defend the clan against a marauding lion or a warring clan).
[and just to be clear: Veblen opposed this state of society, which made him a central figure in the formulation of early 20th Century feminist theory]
Graeber never mentions Veblen. What’s interesting is that even as Veblen has been purged from economics, it seems that his complete dependence on speculative anthropology to support his conclusions has edged him out of the economic anthropologist’s realm too.
This is for reasons that aren’t that hard to accept: much of the anthropology Veblen assumed has been deeply contradicted by current studies, improved methodology, in some cases by the decoding of previously incomprehensible languages, and the general increased sophistication of what evidence now exists as a basis for understanding our species’ past.
The most important of these is the idea of the precariousness of early human society. We all have this image, of the hungry caveman, inadequately clothed against the elements, struggling to defend his lucky kill of a deer that would feed the clan, against a mighty sabre-tooth tiger.
But the reality, in the voluminous studies that have emerged, and that Graeber references throughout his various books, was that our distant forebears lived lives of comfort, even of plenty. They were free to locate to where the bounty of the land was greatest, the climate was most benign, existing in insufficient numbers and with no territorial claims, such that contact with other groups would not be a major threat, but might even be welcome; we lived in a way that only in a few particulars has points of contact with Veblen’s standard account of the late Victorian era.
But those points of contact do tend to support Veblen’s description of the organization of the roles of women and men. At the same time, there are many examples of matriarchies that were either complete, or where women had either seasonal or geographically determined importance. The success of these societies over long eras deflates the exclusively patriarchal model that Veblen relies upon.
The topic is endlessly interesting, but the take away seems to be that in the face of the deflation of the mythic view of our prehistory that Veblen proposes, his ideas became untenable for people like Graeber. If the underlying assumptions for your account of human behaviour are without empirical support, your conclusions will be set adrift.
But it only takes a little reflection to see that Adam Smith’s social anthropology of capitalism is based on what is, if anything, an even more archaic vision of our human origins. Even now, economics constantly begins its accounts with assumptions that humans began with nothing, and had to somehow construct a world of possessions, tools, property and knowledge from nothing.
Adam Smith lived at the point where the establishment of the Enlightenment made it possible for him to propose an image of human nature couched in scientific-sounding language that caused it to be accepted by its readers as scientific. What constituted science at that point was certainly a massive move forward towards rational, empirical investigation from what existed before Francis Bacon. But in terms of available studies or understanding, it was only at the threshold.
So while Smith’s accounts depend more even that Veblen on the now-disproven anthropology of his era, it also seems to share a Judeo-Christian assumption that the human condition is the product of The Fall; while what we actually know about our prehistory (and even the historical observations of the natural state of the Americas, Australia and the South Pacific when Europeans arrived), suggest that Eden is closer to our real starting point.
This in turn suggests that given that contemporary economics refuses to update its ideas in the face of the realities of scientific inquiry, it should be seen not as a scientific account, but perhaps more as a moralizing series of myths.
If Veblen could formulate a coherent theory of economic anthropology a century or so ago, which rose to broad acceptance, but has since been discarded because of its ephemeral supports, what claims does Smith make, that might be called into question on a similar basis? And which of these remain fundamental to the standard economic orthodoxy?
If you searched the internet for “origins of capitalism” (as Graeber points out), you’d be deluged, almost without exception, with accounts from highly established sources like banker’s associations, financial institutions, economics departments, and so on, with the account of the replacement of barter by currency as the point of origin of the market, and modern economics.
Most people will have come across this, and perhaps a twinge of doubt crept in: sure, it’s easy to see that coinage could solve a problem if societies had been trying to solve the problem of exchange through barter; but is there evidence that that ever happened?
In fact, there is– sort of. If we return to the primitive, clan-scaled nomadic groups that Veblen referenced, then a lot of evidence exists that there were exchanges that took place between clans. There are even clan exchanges in the modern era, where anthropologist could directly observe groups with these customs, engaging with neighbour groups.
But were these actual social methods of exchange, meant to facilitate these societies’ general need to distribute according to the complex needs of their members?
Definitely not. Barter could happen between clans, because each would figure out what the other could produce that they could not. Often, this might be because the resources existed in the area the other clan traveled, but not in their own.
So a type of reed might be harvested by one clan, who learned to make baskets, clothes, nets and so on out of it, and in amounts that might exceed their immediate needs. The other clan might be able to gather a sort of shell that made a useful, superior cutting tool; and the fact that each had what the other wanted, in a stable, predictable way that could even be formalized around seasonal celebrations would drive this barter.
But two things that Graeber brings forward from the literature: these barter sessions could often be substitutes for the aggression that would be expected to sometimes arise between groups that in the wrong circumstances – or just out of a need to assert themselves, or because of some small slight – would lead to bloodshed, the taking of women, and the enslaving of warriors.
Rather than an economic system, they were a system of deflection of costly behaviour that exactly the pride and prestige of societies run by men who needed to constantly re-establish their hierarchical position would tend to produce: fighting, thievery, even war. The besting of the other clan in an exchange stood in for the need to best them by violence; it was not so much economic as ritual, and political.
The second thing he brings forward is that nowhere, at any time historically or prehistorically, or presently existing, or in any tradition, has any society been found that organized itself around barter. The reason is one that has escaped the attention of every economist of the past two and a half centuries: it would be impossible.
So the argument is the one that the standard economic accounts agree on: currency exists because it’s better than barter. But barter is not a real possibility, and currency is not the only possibility.
So what were the other options? Graeber spends most of Debt: The First 5,000 Years, and The Dawn of Everything (with David Wengrow) telling us exactly what there was. And if you’re interested, I can’t recommend these books highly enough.
The short, partial answer has two parts: exchange isn’t the only means of distribution of what populations need. Common in North America and elsewhere were longhouse traditions: the tribe would keep its resources in these buildings, and if something was needed by a member of the tribe, or a visitor, it was requested and given. If things were accumulated or made, they were given to the longhouse. Visitors would present the chief with gifts, and these would go to the longhouse.
Graeber identifies this as the fundamental communism of human existence; something like this must exist before exchanges can exist, or indeed barter would be the only option: and it never was. It doesn’t disappear: families, for instance work this way. Those on the ideological right should give some thought to the fact that fundamental family values are – communism.
And if exchange becomes the norm, credit, extended on the expectation that overall credit extended within a group will over time balance reasonably evenly with credit received, has demonstrably been an extraordinarily successful method of organizing human society, out to huge empires, and over long periods of time.
Could a democratic population get rid of capitalism? No was the answer: but that depended on capitalism’s laws being natural. The significance of the barter example, is that the standard accounts, much as Veblen pinned his arguments on received ideas about anthropology, prove to be ephemeral, unreliable, and just plain untrue. Given this, how can we accept the conclusions as being true, never mind natural and inevitable?
Of course markets emerged: and they precede currency. Currencies, in the capitalist account, were inventions of clever traders. This is also not true: governments across the world encouraged and even mandated the creation of markets by distribution of coinage; putting to rest another economic truism about how governments have no place in markets..
The point was to solve the problem of the balance in exchanges: after all, if I give you something, you must give me something of equal value. If I have bananas, and you want bananas, but you have nothing I want – so the story goes – you and I can agree that I can give you a token in the precise amount that we agree the bananas are equivalent to, knowing that others will accept the token later for something else.
If barter had existed, fine. But since it didn’t, what we learn is that credit – debt – is what preceded it. I can just give you the bananas. At a later date, I’ll receive something – leather hides, a knife, a basket, materials and labour to make a dwelling – and over time the balance will be even enough. It doesn’t need to always reciprocate.
(It’s interesting the ways that this anticipates the operations of the Open Source movement – which also is a practice that assumes abundance, not privation – and thus acts as a fundamental communism that underpins the entire digital economy.)
The radical conclusion that Graeber comes to is, that societies, at their most fundamental levels of existence, depend on unpaid debts. Where currencies provide “closure” – a precise denomination of value that the banana-giver receives from the banana-taker – in the fundamental economies of human society, every member of society is thousands of times over both a debtor and a creditor; nobody’s accounts are fully balanced; and so we live in a network of acknowledged and unacknowledged acts of generosity and gratitude, which themselves cancel out, without losing the sense of connection between ourselves and the others we live amongst.
The question at the start was, can utopian dreams survive the realities of the market? A market driven by currencies, where all debts are paid at the moment of exchange, and nobody owes anybody anything, was the utopianism of Adam Smith, which 250 years of uncritical, insulated thinking have preserved, and converted to an expectation, then an edict, enforceable by violence – the violence of those who issue the currency.
A society where nobody owes anybody anything is a society that can leave its people unhoused, hungry, without medical treatment, education, or opportunity. That is an example of how utopias are always dangerous.
Now we have to ask, are the fanciful mythologies of the economists – that currencies are the only thing we can or ever have used to create actual markets, that man’s most fundamental human nature is the desire to individually profit in every exchange – are these worth maintaining? Or do they simply foreclose on our own ability to pursue what turn out to be not utopian visions, but a human patrimony, the pragmatic functional principles of societies across the globe, at massive scale, stretching back to our deepest past?