To name just one of Graeber's essential lies: he makes the claim that Federal Reserve issuing American debt is privately controlled and weaves an extensive chapter based in fundamental ways on this misapprehension. This is a lie that's not "minor" nor "a matter of interpretation" nor unrelated to the "character of the book or arguments within": it's a fundamental misapprehension of the most important debt instrument in modern history (perhaps all history). In a book about debt in history.
I don't really care too much for Graeber's self-important response. If the answer is, yes, Graeber's entitled to say what he wants because people celebrate and have conferences about him, and those who disagree are implied to be beneath him... well, the brazen self-importance is so astonishing that I can't rightly understand how one can agree with that degree of self-importance so directly presented, especially when it comes paired with no actual defense of his statements -- not even a link.
Statements of the form "I'm right because I'm important, and that's all I need to say" are not usually tolerated from almost anyone as a substitute for basic, bare truths. That they are accepted here is not only a comment on the character of Graeber but on the character of his followers.
> To name just one of Graeber's essential lies: he makes the claim that Federal Reserve issuing American debt is privately controlled
From a short piece of writing from the St. Louis Fed itself, linked to in another comment below:
>The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress.
Now, we could quote the next few lines too, for a bit more context:
> So is the Fed private or public? The answer is both. While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations.
Clearly, it's a rather unique institution that makes arguments that it is privately controlled or not rather harder to resolve.
But that also means that this is not "an essential lie" by Graeber. He has elided some of the complexity in favor of what he sees as a more important truth, without saying something that it categorically false.
American debt is issued entirely by Congress and the Treasury, and its monetization controlled by the Fed's Board of Governors, which is appointed by the government and independently operated. There's no means of control over these two things outside the U.S. government. There's also the FOMC, but this is relatively unessential such that it's unlikely to be related to whatever "essential truth" Graeber has in mind. In particular, they don't set monetary policy but do whatever the Board of Governors orders in that regard.
I wasn't making an argument about the behavior of the Fed.
You stated that Graeber had told "an essential lie" in claiming that the Fed was privately controlled. I quoted from the St. Louis Fed. their own text which (a) confirms that it is not part of the government (b) it's complicated.
I don't really give a damn about the argument on whether the Fed is or is not part of the government; what I care about is people claiming that someone is lying when they are not.
The point is issuance of American debt, and the Fed's role in it, is not privately controlled, neither in fact or in essence. Saying otherwise is an obvious lie in both senses.
This dispute might originate deeper into Graeber's other work on debt in "Debt: The first 5000 years." In common parlance, Treasury Bonds are the debt. But, in Graeber's theory of debt, the currency itself is also debt.
I haven't read Debt yet but one can look at the index and jump right to p365 (Federal Reserve Bank - loans to government by, 365-366). It characterizes the Federal Reserve as "a peculiar sort of public-private hybrid" (this is certainly true, and it's a deliberate design feature) and gives an accurate but highly abbreviated description of fractional reserve banking and the Fed's purchase of government bonds.
Nothing on this page tells me that he doesn't understand the system or is attempting to deceive. I don't understand where your objection is coming from. Have you branded Graeber the great deceiver because of a line like "while technically, the Fed cannot lend money directly to the government by buying Treasury Bonds, everyone knows that doing so indirectly is one of its primary reasons for being"? That statement is a lot less controversial than you perhaps believe it is.
Everything on this page seems pretty innocuous, and while I'm sure the whole book is a lot more daring... this doesn't jive with your criticism at all.
> To name just one of Graeber's essential lies: he makes the claim that Federal Reserve issuing American debt is privately controlled and weaves an extensive chapter based in fundamental ways on this misapprehension.
No, he does not. This is the only passage I can find where Graeber comes close to what you claim he wrote:
“The Federal Reserve—despite the name—is technically not part of the government at all, but a peculiar sort of public-private hybrid, a consortium of privately owned banks whose chairman is appointed by the United States president, with Congressional approval, but which otherwise operates without public oversight.”
As has been pointed out to you at least twice in the other comments, this is how the Federal Reserve describes itself. You’ve misremembered Graeber (here I will be charitable to you and not claim that you’ve lied) as saying the Fed is “privately controlled”, and your repeated assertions, as you’re backed into a corner in other threads, depends on this precise misremembering of what he actually wrote.
And furthermore, he does not “weave an entire chapter based in fundamental ways on this misapprehension”. The chapter is primarily about the role of the US military, its global domination, and ability to wage war in support of its economic interests, in the proliferation of the USD and its economic power. The paragraphs about the Fed and it’s precise association with the government is basically a sidebar.
> Statements of the form "I'm right because I'm important, and that's all I need to say" are not usually tolerated from almost anyone as a substitute for basic, bare truths. That they are accepted here is not only a comment on the character of Graeber but on the character of his followers.
I thought you were more acquainted with the long running dispute between Graeber, Delong, and a host of neoliberal/libertarian/Austrian economists. Apparently, you do not realize that the passage I quoted was from the final response that Graeber offered in their long running dispute, a dispute that included answers, in detail, of DeLong’s specious claims.
“I’m right because I am important” was not Graeber’s argument, his argument was along the lines of “if “Debt” was so riddled with obvious and crippling flaws, why as it been so influential in economics and anthropology? Why has it led to conferences and it’s own influential body of work that cites it? Why did it lead to a professorship at the London School of Economics? Collaborations with prominent economists?”
Given your attack on Graeber is riddled with errors, depends upon a misremembered quote, demonstrates ignorance of the content of his own long-running defense of his book, how are we now to judge your character as you have seen fit to judge me and his other supporters?
I actually followed the Graeber-DeLong argument when it broke, and found Graeber to be quite unhinged. In one tweet I found memorable, he accuses DeLong of "war crimes" -- presumably for supporting free trade or neoliberal economics or something[1]. At other points he threatened legal action.
But it doesn't matter, really. Graeber knew the target audience on HN wasn't aware of the debate--why would most of them be aware? He expected the audience to simply accept his greatness without evidence.
Just search for "de-legitimization". Again, he doesn't bother to respond to any actual points raised and just exercises a whole lot of ad-hominem - and unlike with Brad, someone like henry Farrel is much more of a fellow traveller.
If you read the critiques that Graeber discusses, you’ll see they’re exactly as he describes: instead of addressing Graeber’s arguments, they instead insinuate that his ideas are not worth addressing (after using the silly Apple error to dismiss Graeber’s entire body of work).
Notably, he does respond to their actual points, at length and to such an extent that copying and pasting an example which includes both Farrel’s critique and Graeber’s response would dwarf my words in this reply. are we even reading the same article?
HN readers would be aware of the long running debate because he mentions the debate, summarizes several elements of it, points readers to where it can be found, IN THE VERY HN POST FROM WHICH I QUOTED!!
Perhaps Graeber believed that HN readers were capable of using search engines to familiarize themselves with the debate, and verify his claims. Apparently, not all HN users are capable of this, as demonstrated by your posts throughout this discussion.
And, we have further evidence of either your incuriosity or obfuscation. No, Graeber did not accuse DeLong of war crimes in that tweet because of DeLong’s mere support of neoliberal economics. If you’d read further that Twitter thread, Graeber provides context, mentioning the ELZN and NAFTA.
Plug those into your favorite search engine, and you’ll get references to the Zapatista’s revolt against NAFTA, and their reasons for their actions. From The Nation[1]:
“We are a product of 500 years of struggle,” began the Declaration of War read out from the city-hall balcony to the people gathered in the main square, or Zócalo. Then came the phrase that would become iconic the world over: “But today we say ¡Ya Basta! (Enough is Enough!).” Named after the equally iconic revolutionary leader Emiliano Zapata, the Zapatistas planned the rebellion to coincide with the enactment of the North American Free Trade Agreement (NAFTA).
Their prediction, which history has subsequently borne out, was that NAFTA would hasten the dispossession of indigenous people both by opening up the region to large-scale ranching and by driving down the prices small farmers received for their corn, beans, and coffee. Today, Mexico imports nearly half of the corn and beans it consumes, and is equally dependent on staple products such as American-produced pork, chicken, wheat, and powdered milk.
Researcher and activist Diana Itzú Gutiérrez Luna, who has worked extensively with Zapatista communities, considers the economic warfare inaugurated by NAFTA part of a larger geopolítica del despojo, or geopolitics of plunder. There are currently 77 military bases in Chiapas, most of them located in the autonomous regions controlled by the Zapatistas and/or in areas rich in natural resources: water, uranium, and the barite used for fracking and the drilling of oil wells. “Basically, what they’re attempting is a territorial advance that implies the extermination of these worlds of indigenous life,” she says. The advance, she notes, has assumed a number of different disguises, from the “Puebla-Panama” development plan pushed by former president Vicente Fox to the “Special Economic Zones” designed to extend Mexico’s border model of tax breaks and low-wage maquiladora labor into the deep south.“
So, there you go. An ongoing war in Mexico between ELZN anarchists and the Mexican and US governments over NAFTA and the myriad other destructive neoliberal policies that have wreaked havoc upon indigenous people from which the Zapatistas originate and defend.
Why does Graeber speficially point to DeLong here, claiming that a war crimes tribunal exists that would try him? Just because DeLong merely supports these policies? Another search would have revealed to you that DeLong, in his role of deputy assistant secretary for economic policy in Clinton administration, wrote the economic impact estimates justifying and defending NAFTA. In other words, he was a core member of the team that architected the very trade deal that launched a war between the Zapatistas and the Mexican government.
Knowing now these key facts of which you were previously apparently ignorant, who in this twitter exchange was more justified in their (mutually hyperbolic) statements: DeLong, claiming that that Graeber does not know the power relationship between creditors or debtors - the subject of the Debt book - or Graeber, claiming that the Zapatistas would accuse and try DeLong for war crimes in Chiapas? I think the answer is quite obvious, but judging from the deliberately obtuse arguments that you’ve made, I suspect that you’ll be able to rationalize to yourself that none of what I pointed out here matters.
I don't really care too much for Graeber's self-important response. If the answer is, yes, Graeber's entitled to say what he wants because people celebrate and have conferences about him, and those who disagree are implied to be beneath him... well, the brazen self-importance is so astonishing that I can't rightly understand how one can agree with that degree of self-importance so directly presented, especially when it comes paired with no actual defense of his statements -- not even a link.
Statements of the form "I'm right because I'm important, and that's all I need to say" are not usually tolerated from almost anyone as a substitute for basic, bare truths. That they are accepted here is not only a comment on the character of Graeber but on the character of his followers.