Thursday, June 14, 2012

Part Four of a review Of Dr David Graeber’s “5,000 Years of Debt"


Part Four

As I get into Dr Graeber’s book, I confess that I find it interesting because of its wide-ranging number of subjects that interest me. I know that the narrative is moving slowly and methodically to a conclusion for which I expect not to have much sympathy. I must admit also that I find Dr Graeber exasperating whenever he mentions Adam Smith. He has a cartoon image of his philosophy, and is influenced too much by modern neoclassical economics and of what I take from his references is an aversion to ideas of exchange and, above all, of anything smacking of markets, or at least his versions of them.

In Chapter Four, “Cruelty and Redemption”, the reader is treated to a medley of themes which irritated me for the certainties by which they were asserted, but with which I have doubts, both theoretical and experiential.

For example, “in competitive markets, trust itself becomes a scarce commodity” (p 75), more a cynic’s wisecrack in a long meeting, than a credible statement applying to all market transactions in all markets all of the time. People have different levels of risk-aversion and various markets develop to mitigate levels of risk felt by players. Trust among market makers has to reach some minimal degree for individuals to participate in markets that function and for many other daily activities to be performed (ride a train, fly in a plane, buy and eat a sandwich, walk along a dark road, and so on). But why does Dr Graeber direct his particular ire against “competitive markets”?

Experience of low-market economies everywhere shows the reverse – it is when low levels of trust are socially predominant, among significant proportions of a population that development is inhibited in stagnant poverty. Trust is an essential quality of competitive markets since per capita living incomes began to rise inexorably from the early 1800s in north-west Europe, and by the late 1800s spread elsewhere through to today. On visits I made to South Africa on business (on bargaining counter-trade agreements) the local development of markets was inhibited by the high- levels of distrust (mainly associated with criminal gangs and over-bearing local corrupt administration of justice. Similarly, in the southern (poorest) regions of mainland Italy and Sicily, whole villages did not trust the villages around them, so that large infra-structure projects were endless delayed by attitudes of visceral non-cooperation and long-standing vendettas, blood feuds, and chronic distrust.

Dr Graeber quotes extensively from the writings of Friedrich Nietzsche for several pages (pp.76-78, 80). Allowing for his gloomy literary style, it was Nietzsche who asserted that the earth was drenched “red by the blood of animals” who had not kept their promises; a striking, if overly dramatic, way of making a brutal point about trust. Trust is deep in the habits of acting to reciprocate mutual obligations, which is the very essence of reciprocity norms that were repeatedly practised by generations of primates and early humans in the wilds of Africa for scores of millennia ago and today too. Failure to reciprocate is seldom punished today by systematic blood letting but the consequences of foregone future mutual reciprocated conveniences in small groups can have no mean consequence in conditions of narrowing already minimal choices amidst poverty, particularly in the shorter lifetimes of ancient societies. Because ‘one good turn deserves another’ it was and is very human to neither forgive, nor forget someone’s failure to reciprocate good turns.

When Dr Graeber discusses Nietzsche he links his themes of ‘ancestor worship as somehow related to Adam Smith’s alleged “assumptions about human nature” but passes over Smith’s characterisation of the norms of early societies in his earliest thinking, in his “History of Astronomy”, written from 1744 to the 1750s, and then kept hidden in his bureau drawer in his bedroom until he died in 1790, having given instructions to burn everything else, but to publish the hidden essay. His executors published it posthumously in 1795.

In HA Smith discusses primitive explanations for nature’s ‘terrors’, and how ‘these appearances’ terrified early mankind. Eclipses of the sun and moon excited and terrified early humans by disturbing their imaginations, making them receptive to wild notions from whomsoever gave plausible explanations (HA, II.9, 43). They were ‘disposed to believe everything about them which can render them still more … the objects of [their] terror’ as proceeding ‘from some intelligent, though invisible causes, of whose vengeance and displeasure’ they are ‘the signs or the effects’. Thus ‘cowardice and pusillanimity’ is ‘natural to man in his uncivilized state’ (HA, III.1, 48), who linked the irregular events in nature, of which some are ‘awful and terrible’ and some ‘perfectly beautiful’, to some ‘invisible and designing powers’, and found in the origin of Polytheism, belief in the ‘favour or displeasure of intelligent beings, to gods, daemons, witches, genii, fairies’ (HA, III.2, 49). ‘And thus, in the first ages of the world, the lowest and most pusillanimous superstition supplied the place of philosophy’ (HA: 49-50; cf. TMS II.ii.1.2: 94).

Smith points to the ignorant origins of primitive religion in the minds of ignorant listeners, whose ignorance hardly changed from early societies to the richer myths of the gods of the Athenians, then in the ignorant forms among the common people into modern times, alongside the narratives of revealed religion, such as shared by the Old Testament of the Jews, and the New Testament of Christianity. My paper “The Hidden Adam Smith in his Alleged Theology”

(Journal of the History of Economic Thought, Volume 33, Number 3, September 2011) discusses these ideas sufficient to show that Adam Smith held private secular and skeptical views on superstitious religious explanations of the bulk of Dr Graeber’s theories in chapter 4, of which pages 80-87are largely about theology.

Before moving to chapter 5, I would point out that it was nowhere true of Adam Smith (whatever Nietzsche’s views) that he believed that ‘we are rational calculating machines that self-interest comes before society’ (p.78). Some modern economists certainly believe and teach that view but it is a wholly invented narrative when ascribed to Adam Smith. It was popular among modern economists from the 1870s, sometimes characterized by the infamous myth of ‘Homo economicus’ in neo-classical theory, with it ‘rational choice theories’, ‘welfare theorems’, and ‘general equilibrium’. None of these and the whole corpus of mathematical modeling has any textual authority in Adam Smith’s Works. Maybe it is in this common misunderstanding that we have the source of Dr Graeber’s, sometimes dismissive, anger towards Adam Smith in that he subscribes to a wholly invented Chicago “Adam Smith” from the 1970s that is not representative of the Adam Smith born in Kirkcaldy, Scotland, in 1723.

[Apologies: I missed posting this part four on Thirsday


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