>> fabulous to see such a large crowd here today. i wonder if it has to do with the fact that the death and the dollar are relevant topics today. we are really lucky to have two fabulous prolific writers with us today. what two topics could be more relevant than to talk about today's climate of economic crisis? david graeber and h. w. brands here to talk about their new books. are am assuming we won't have trouble getting questions from the audience but a few housekeeping things first. i hope when you are done over here and impressed with the two authors you go back to the tent next to us and by the books. in the book signing tend. 15 minutes after the end of the session or maybe 15 seconds the authors will sign their books at the book signing tend. one thing about the festival. i don't know about you but this is my favorite festival. i love south by southwest. [applause] this festival is fabulous. the people are doing the lord's work depending which lord you are thinking about. along with celebrating books and authors the festival benefits the texas public library and literacy across the state. we need that. proceeds in the sale of all books and merchandise in the sales tend benefit these efforts. we are celebrating our sixteenth anniversary this year. the past 15 years the festival contributed $2.5 million to libraries to enrich 35,000 children in low-income schools throughout the state. i want each of you to buy the books from both of these guys because you will read great books and benefit this wonderful mission. i am not an expert on the debt and the dollar. i am paul stekler and are in or about politics and i found these books fabulous. i loved it when i began searching the web to figure out who david was and in the background the author of debt:the first five thousand years. you wonder about the next 5,000 years. the first description i found stated he is an american anthropologist and an anarchist. i am not sure how anarchist's get together and write these books. he holds a position of leader in the social anthropology and goldsmith, university of london. he previously taught at yale and is the author of a number of books and essays and articles for the new left review. dissertation work in the authors tend focusing on the legacy of slavery and endlessly fascinating island of madagascar which is partially dealt with in this book. in 2006 he delivered the malinowski memorial lecture at the london school of economics and honored outstanding anthropologist who fundamentally shake the study of our culture. we are glad to have him here today. >> thank you so much. [applause] >> secondly on this panel we have h. w. brands who teaches in texas and as far as i can tell he has written 24 books. this is the only one that is out. he is writing books most of the time. is the dixon allan anderson centennial prof. of history at the university of texas. he taught at vanderbilt and, a tee time finalist for the pulitzer prize. a traitor to his class for the radical presidency of franklin delano roosevelt and the first american. the life and times of benjamin franklin. like i said, 24 books. he presented eight times here. he is the past texas award winner at this festival and has not one but two books at the festival this year. if you can't get enough now come back tomorrow. that book is the murder of jim fisk for the love of j mansfield along with the book we are discussing today, greenback planet:how the dollar conquered the world and friends civilization. sound like a horror movie and maybe it is. what i would like to start out with is have each of our offers talk about the book if you manhattan are the last few softball questions and leave the hardball questions to you guys. we will have people ask those questions and keep those questions going as long as we can before they go out and buy their books. can you tell me about that? >> why do we have that? one of the questions i asked when writing the book is what is dead? one than i was trying to explain was the strange moral power that debt has over us. it all started with a conversation i had with someone i met at a party about madagascar. i was talking about the third world debt crisis and these debt campaigned as an activist. something that the effects of structural adjustment policies inflicted by the imf and some examples in madagascar's they cut the budget radically to pay citibank and other banks with approved interest rates and got rid of their eradication program which kept mosquitos away from the highlands and there was an epidemic in which 10,000 people died. the reaction was terrible. surely you are not saying they couldn't pay the debt at all. i thought about it and said this is a rather liberal lawyer that i was talking to. what other thing would cause someone to say it is sad about that -- you have to pay the debt. default? what other circumstances would someone approve of the death of 5,000 babies? something about that has absolute moral hold over us. that is what i was trying to address. where does that come from? it is a promise by a certain type of promise. it is a promise that has been corrupted in a certain sense by mathematics and ultimately by violence. you can return a promise which is a deeply personal thing into an impersonal form like a debt into math something that can be exactly quantified when there's an element of coercion. from their, that also makes it transferable. you can't give a promise to someone else. if you want to understand the origin of money is how promises become mathematical and the history of that is what the book is about. >> let's move from debt to dollars. >> i wrote about the dollar. i was asked to write the book but the answer to why i said yes is i had been talking about the dollar in 30 years i had been teaching american history. something you need to take for granted. pull the dollar bailout of your pocket and spend it but if you think about it a minute there's a certain magic involved because the piece of paper you pull out of your pocket is not worth a dollar. might be intrinsically worth a nickel or something or even better if you walk around with hundred dollar bills in your pocket because $5 becomes worth $100. are regularly asked my students why is this so? what makes this piece of paper worth five hours of someone's time? we get into the legal background. i do a magic trick -- in fact maybe i can do it now. here it is. i have got this piece of paper. not very many of you can see it but it is a $5 bill. if i take it into the cbs down the way i can exchange this for $5 of really solid stuff, food or medicine or whatever it might be done this piece of paper isn't worth intrinsically $5 but there's something on the piece of paper that in fact this magic and makes it worth $5. probably those in the back won't be able to -- anybody, there is a magic formula that is printed on this piece of paper that makes it worth $5. takes a piece of paper that intrinsically is worth a nickel and transforms it into something worth $5. do any of you know what that magic formula is? show of hands? anybody? somebody is waving money. u.s. treasury is ago start but that is not a magic formula. way back. legal tender! there it is! in fine print on the front it says this note is legal tender for all debts, public and private which means you are offering something for sale and put a $5 price tag on it and i walk in with one of these you have to take it. that is the magic. why does it work? congress can say, that is where the formula comes from, congress passed the first legal tender act in the middle of the civil war. until then dollars in american history were cooling money. they will gold or silver. there were private notes circulating that represented themselves as money but were not legal tender. you didn't have to take those notes anymore than you have to take a check. i started writing this book because it had historical interest but since it came out it has developed greater contemporary interest. one thing i say at the end of the book is the dollar is almost certainly going to lose its privileged standing as world reserve currency. and foreign creditors to the united states will do their best to diversify their currency portfolio. what do you know? just in the paper couple days ago reuters had a report that china has agreed with the association of southeast asian nations that trading in that block will be done in chinese yuan rather than in dollars and then i read something yesterday which flew in the face of my magic trick. it seems that the legislature of louisiana -- just happened in the last couple days -- the legislature in louisiana passed a law that says that people who sell second-hand goods can accept cash for those goods and they cannot. in the first place this strikes me as probably in violation of federal law because if it is legal tender it is legal tender. secondly, erases some really interesting questions about the direction of dollar. if cash is not good anymore what are we going to go to? that is a long winded way of saying -- >> that is louisiana you're talking about. >> let me from a question out to both of you to start out with. some specific questions about the books. we are in the middle of what everybody seems to agree is an economic crisis around the world and part of that crisis is the place of the dollar. the chinese currency or the euro is in any better shape obviously hasn't done very well in 20 years since the japanese collapse. we just had this incredible crisis over the debt crisis which you would say is not what everybody thought it was. where exactly considering where you're coming from from the history of debt and the history of the greenbacks were we getting into in the twenty-first century? is there a placement for the dollar? is this debt crisis going to blow the entire economic system? >> hard to know where to start. our attack something on to what you said. the actual amount of dollars is $0.03 which is how the federal reserve takes them no matter what the denomination. the system of money we have now it is important to remember that it took a long time for the u.s. to come to the central bank mall. they got rid of it. the basic model for how modern money works is the opposite of the way people talk about it in mainstream political discourse. i like to give the example of the origin of the bank of england. in 1694 a group of london merchants made a loan to the king of england to fight a war in france and he gave them the right to take the 1.2 million pounds that he now owed them and lend it to other people in the form of bank notes. that is what british pound sterling bank that actually are. i don't have any in my pocket any more but if you look at 810 pound note from the queen it says i promise to pay the bearer of a sum of 10 pounds. is not actually 10 pounds but a promise to pay 10 pounds. at that time it was worth something. the way that affected is you pay taxes or cancel the debt with a credit. is circulating government debt. in a way that is what money has continued to be. the federal reserve works with more snow and mirrors but ultimately the same principle. they make up money with a magic wand and landed and circulate. that money effectively is circulating government debt. as the result the government got rid of the debt entirety. there is a study under the clinton administration when they were trying to get rid of the deficit or drew a budget surplus, what happened if they got rid of the debt entirely? they concluded it would cause an economic catastrophe. you need -- banks would have to make up some money. in second periods they did do. when andrew jackson got rid of the debt it was the one time anybody has. the way the wheels are turning in the opposite direction as we think they are money isn't actually the scarce resource like petroleum or something where there's only so much. but how much we create and who gets it. that is the real political struggle. on a global scale is similar for most of cold war history. the countries actually were holding the treasury bond. the u.s. has this advantage it can raise checks and treat them like gold and use reserve currency by the rest of the world. there used to be west germany was one of the bigger holders and gold states and japan and south korea. they are all under u.s. military protection in one way or other. in a way the amount of debt is the same or increases with military spending so people are lending as the money to create these armies that never quite pay it back. now that china is involved is more complicated but that is the symptom being challenged and it is simply true that the last few hundred years the global reserve currency tended to be that of premier world military power. are don't think that is a coincidence. strikes me that that is what is being contested. the primacy of the dollar. not what currency would replace it but what would replace the u.s.'s military model. >> the question on the future of the dollar is related to the future of the american economy. david just suggested the country that has the biggest and most powerful economy is the one that dictates the terms of world finance. you can see this in the case of the united states. the united states was the most productive economic power in the world by the beginning of the 20century. at that point it remained an international debtor but during the first world war and it is always worse than bring this about, as the belligerents -- united states tipped from being a debtor nation to the world's largest creditor. in the era of america's creditorship, lasted from 1910 to 1980 and it was during that period that the dollar and american diplomats wrote the rules of the international financial system. specifically the system that originated at the end of the second world war. at that time america's industrial production gdp was roughly equal to that of the rest of the world combined. with that kind of leverage the united states was in a position to dictate to the rest of the world. the world financial system, other currencies were linked to the dollar and the dollar was pegged for bold and the gold had was considered important because something like a gold standard has always been a check on governments from producing more and more notes. if you have legal tender. for the first time the united states came into effect in the 1860s and it occasioned agreed controversy because until then government could not be trusted not to just run the printing press until was useless. the government was more circumspect and won the war and was able to redeem those legal tender dollars. gold still remained a model of currency because governments can't produce it. only god can produce gold and gold remained a linchpin of world currency from 1945, an end of the second world war until the 1970s but by then the united states had slipped. it was still no. one power in the world economically but no longer had the advantage over the rest of the world that it had. this was inevitable. it was not the result of any particular policy decision by the united states or its leaders those contributed that lyndon johnson simultaneously decided the war in vietnam and put great strain on the u.s. budget but the larger issue was since 1945 until the 1960s the rest of the world began to recover from world war ii. the united states was in a basic way the only winner of world war ii and the united states stood atop a pinnacle of economic power. the american economy continued to grow after 1945 so you could say the top of the mountain got taller but the slopes of the mountain are taller faster so by the early 1970s america had a third world gdp and would continue to decline and it is down to around a fifth of world gdp now. under these circumstances it is quite unrealistic to expect that the dollar will continue to have its way that it had 60 years ago. this doesn't mean the united states will be knocked from its perch immediately and entirely. there is no single currency that is a viable alternative to the dollar. at least not at the moment. much more likely there will be a market basket of currency or the individual sovereign debt or sovereign will fund and people who have large foreign currency holdings diversify. instead of holding dollars they hold dollars and euros. more or less inevitable. there are three hundred million people in the united states and seven billion people in the world. under those circumstances things are going to even out a bit from where they were 60 years ago. >> one of the wonderful things about both these books besides the fact that both these gentlemen are teachers who can really write which is not something you always see in scholars, these are really great books to read. these books are also more than just an op-ed piece about that and the dollar but there histories and really interesting histories about things we don't know much about. i will put data on the spot. one of the most interesting things you wrote about was talking about that and virtual money in context of the slave trade in africa. such an amazing chapter. talk about that. >> one of the fascinating things. i discover all sorts of crazy things ranging from debt cancellation amendments in mesopotamia to free-market populism is out of sharia in medieval persia. one thing that struck me was the slave trade. when i was involved in these drop the dead campaigns one of the arguments is africa is the most indebted continent in the world and who is what to who? if you don't know look what you did to was which is a fair case. you make that case even stronger her if you look at how the slave trade was conducted. it was entirely carried out through the manipulation of that. the stage where people were coming in and taking people away did happen but it was often an initial stage and followed up by creating these really elaborate deathtraps so that the whole thing was a complex credits screen where merchants in england would forward funds to merchants overseas and forward funds to african merchants and everyone would be advancing to someone else until it got to the local level where one common pattern was fun and wars between people because indebted kings needed a way to pay back their creditors. even more common was to advance goods to get people caught in credit traps. another way was to corrupt legal system so that any crime you can enormous penalty if you can't get a penalty gets underway. there are all sorts of techniques but there's a gigantic network of that traps. it is interesting because it is important in itself. one reason, the model of what can happen in human history and other places, very rapid catastrophic version of what i call it human economies committed in 2 commercial economies. you have complex systems in traditional societies but if you look at money as an anthropologist the most common use of money in places where you don't have states is not to exchange goods and services which are usually complex gift systems where you dispose of your calls and require tools but they do have money and if there are quarrels or a marriage needs to be negotiated, social relations are carried out through money and what we would consider economic relations aren't. this is not the way the system can be corrupted. people show up, the way i usually put it is imagine what would happen to our society if space aliens showed up with incredibly powerful weaponry, no morality whatsoever and said we will give a million dollars to anybody who provides human workers and won't say what happens to them. somebody will take the bait. what they ended up doing was converting what had been monetary systems to arrange relationships between people in 2 ways of extracting people. if you want to look at how many originated in the form we have it with a process like that the probably happened 5,000 years ago in mesopotamia of which