Moving Off Gold Standard Responsible Not Only For Inflation, Deficits, Unemployment, But Also Fall Of Roman Empire

When I was at my last job, I tried occasionally to take a step back from deals and markets and get perspectives on the bigger picture. To that end, I once went to a talk given by the anthropological theorist David Graeber, who is perhaps best known for being fired from Yale just maybe because he was an anarchy activist who was occasionally arrested at protests. After this talk – about theories of value from a Maussian-Marxist perspective – Graeber took questions. The tone of the questions, which often began “when I was in grad school” and went on to cite Weber and Nietzsche, and the variety and topiary ambition of the questioners’ facial hair, led me to believe that I was probably the only investment banker in the room.

Graeber now seems to be courting a financial-industry audience, however, with a well reviewed new book out about the history of debt, and an interview with Naked Capitalism today. It’s a good read, both because Graeber loves to be provocative and because it has things to like for both Ron Paul voters and Paul Krugman readers.

For example, think that paper money will destroy America and QE3 would be treason? Graeber’s takes a long-term perspective. Really long-term:

The last time we saw a broad shift from commodity money to credit money it wasn’t a very pretty sight. To name a few we had the fall of the Roman Empire, the Kali Age in India and the breakdown of the Han dynasty… There was a lot of death, catastrophe and mayhem. The final outcome was in many ways profoundly liberatory for the bulk of those who lived through it – chattel slavery, for example, was largely eliminated from the great civilizations. This was a remarkable historical achievement. The decline of cities actually meant most people worked far less. But still, one does rather hope the dislocation won’t be quite so epic in its scale this time around.

On the other hand, this is after all a guy who spends his vacations at anarchist riots, so he’s not going to say no to a little liberatory destruction. So he can live with fiat money, depending on just whose fiat it is:

When thousands of people begin assembling in squares in Greece and Spain calling for real democracy what they are effectively saying is: “Look, in 2008 you let the cat out of the bag. If money really is just a social construct now, a promise, a set of IOUs and even trillions of debts can be made to vanish if sufficiently powerful players demand it then, if democracy is to mean anything, it means that everyone gets to weigh in on the process of how these promises are made and renegotiated.” I find this extraordinarily hopeful.

So then … maybe we’ll see some forced mortgage refinancing?

On the other hand Graeber appears to be less interested in solving the unemployment problem. Actually he’s not so sure unemployment is a problem. Maybe the problem is employment:

And, I might add, if Aristotle were around today, I very much doubt he would think that the distinction between renting yourself or members of your family out to work and selling yourself or members of your family to work was more than a legal nicety. He’d probably conclude that most Americans were, for all intents and purposes, slaves.

What is Debt? – An Interview with Economic Anthropologist David Graeber [Naked Capitalism]

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10 Responses to “Moving Off Gold Standard Responsible Not Only For Inflation, Deficits, Unemployment, But Also Fall Of Roman Empire”

  1. trojan_ says:

    too epic, didn't read

  2. VonSloneker says:

    Aristotle doesn't know shit about being a slave…


  3. early_hominid says:

    Friday at 5:30 before the weekend the world ends as we know it probably not the best time to start a discussion group, but ok: Let's enslave robots so we can all be Athenian citizens. Problem solved.

    Matt, all kidding aside, you kicked so much ass this week I almost went blind.

    Now where's that fucking hurricane . . .

  4. Matt,

    I loved you in 'I Am Legend'

    -S Jackson.

  5. Nailz6 says:

    Best Matt post ever. I'm going to go pick up that book.

  6. Shaking Head says:

    Apparently all the BSDs in finance from 2002 to 2009 were "financial theorists" and look what that got us.

  7. N.A.S. Keflavik boi says:

    Very good post! There is more than a hint of "unraveling" going on right now…

  8. Guest says:

    Nice post, Matt. I'm no anarchist, but you have to sympathize with Graeber when you see hypocritical frat guy douchebags like Jamie Dimon go on TV and say "people should pay their debts."

  9. HFguy says:

    Great post.