I have encountered the primal myth of money and markets many times when talking about my most recent book, The Surprising Design of Market Economies. I tell people that the state, that is government, creates markets. Inevitably someone in the audience comes back with, “Yeah, but markets are natural. Thousands of years ago, before formal governments, two farmers were trading or swapping goats for bricks, or cheese for tools, and so on.” It’s an important question for a number of reasons, but one of them is that  this idea that markets or at least market trading behavior is a basic aspect of human nature is the foundation myth of of both classical economics, and of Libertarianism. But even average, seemingly non-political and non-economics oriented people seem to hold some version of this belief.

David Graeber, in his new book Debt: The First 5000 Years, does a very good job as exposing this foundational myth for the fantasy that it is. Graeber, an anthropologist by training, shows that no primitive tribe or early people have ever acted this way, at least that has been found. He shows that those friendly to classical economists, who tend to talk about markets as natural, have spent effort trying to find such people with their natural markets, and have failed.

I talk a lot in my book about how governments create markets. Indeed, that is its central thesis. But I only address the fallacy of the of primal myth of markets in passing.  I didn’t have the knowledge and expertize that Graeber has accumulated from his years of research, to show exactly how classical economists are wrong in this regard. Graeber even takes on the master himself, Adam Smith, and convincingly so.

Graeber exposes the inaccuracy of the primal myth of markets as part of his larger thesis in showing what are the origins of markets, in an economic sense. Graeber says not only that markets are a creation of the state, but that markets begin with debt, which in turn was usually created by the state. It’s an interesting theory, and he does a good job supporting it.

I’m just beginning the book, so I won’t pass any final judgments here, but so far I’m impressed by how readable Graeber is, and how succinctly and simply Graeber writes about what are often complex subjects, while using well sourced examples to illustrate his thesis. My hat, so far, is off to Graeber.