Topic: Money did *not* evolve from barter - page 2. (Read 4095 times)

Possibly, but Del Mar certainly delved in to it, investigating all kinds of source material as historians do.

Apart from evidence, I find it easy to accept the proposition that in a moneyless, barter commity, one of the traded commodities would gradually be preferred for indirect exchange.

That's exactly what he says is a myth, there is no evidence for it. Adam Smith was not an anthropologist.

Not really, but I can always point to Adam Smith or Alexander del Mar, both suggested a natural development of money from barter via all kinds of commodities at hand. Gold is only the stuff that it always end up with, because of its superior money qualities.

Well, then I guess it's your turn to counter Graeber's "zero evidence" argument and deliver some evidence. 

I didn't read it, I hoped someone would just refer the main point. You did, thanks.

To the quote, I am not much impressed with the reasoning. Of course money existed long before paid armies. Money is not only coins of precious metal with emperors' heads.

yes, did you read the linked interview you quoted above?

That's what he says:


Why should gold and silver coins ever have been grassroots money if almost all that got dug up had heads of leaders on them? This doesn't make sense. He says it's rather that standing armies at borders would pretty soon deplete all food that grows naturally around them pretty quickly. So with those coins they brought their population to grow and sell food to these soldiers. That's how markets arose. The leader's head on the coins hints that they would flow back as taxes.

Their idea made them the Kings.

So the point is it didn't evolve, rather it was invented?

Well, let's say you owe someone 3 chicken. So what? It's irrelevant as long as there's no law enforcement behind it, which can only come from authority. /cc people piraped at 40.

Ancient communities, just like American natives, didn't think in terms of barter, tit-for-tat. They mostly shared among themselves what they hunted and gathered. This is also called primitive communism.

What you could argue is that this model didn't stand the test of time. The evolution of mankind favored leaders, conquest, authoritarianism. And I guess Graeber wouldn't deny that a monetary system indeed may allow more efficient allocation of resources than a free sharing model. But he insists that money was an authoritarian invention, to collect taxes and support soldiers.

Money is an abstract idea, so how could some government/king come up with it?
And we know people (like fur hunters) often come up with some sort of money, when some other preferred sort of money is not available (be cigarettes in jail or goat in some place where the national currency is collapsed due to civil war and lawlessness).

A commodity could rise to money level if it is wanted by the people (usually for is usefulness and scarcity).
The fact is is wanted and it is scarce would give an incentive to people to hoard it before it become money.

A hunter, on the hills, could be successful and obtain a lot of meat. But his ability to preserve the meat is limited to how much salt he have available. But the salt is not available around the hills.
So he will be interested in exchanging meat (or salted meat) for salt brought to him by a trader from the coast.
The trader would not be there every time the salt is needed, so the hunter need to hoard enough salt for all his need for a prolonged period of time (for example, one year).
Obviously more is better than less, and it is preferable to have more salt available than is needed than less (because this will cause an inability to preserve meat), incidents happen and salt could be lost, etc.
So the hunters (the wise ones - the others starve with their families) end with a permanent stock of salt always available.
A hunter being low on salt (unwise one or simply unfortunate) could exchange meat with salt with another hunter (maybe a less skilled hunter unable to use all his salt).

Salt would become a indirect means of exchange because it is more durable, divisible, etc. than meat.

When in doubt about what accept in exchange for something, the hunters would accept salt.

Then some hunter would discover that his is able to obtain more meat if he stockpile salt for other hunters and exchange it for meat, so he stockpile it in excess than his needs.
Maybe an older hunter no more good at hunting would end doing more salting for his mates and then he would more preoccupied to hoard salt than them. They would need to be more mobiles and could not afford to travel with a lot of salt on them and he being less mobile and specialized in salting would be able to afford to guard his immobile stash of salt.

I think it is less probable some credit/debt existed, because people died often so lending something would be very risky.
Gifting something it is another, different thing.

Other than some money stuff, debt could have been used, but could it have been used first? What unit was the debt in, or was it debt expressed in all kinds of goods, like barter, but on paper or clay?

A system of clearing could be used on a market, but the same questions apply.

May be you could refer here what was said.

I suppose it wouldn't hurt to point out that if all existing fiat currency were to hyperinflate into nothingness, we'd still know about the concept of money.

The question then would not be, should we use money? Of course people will want some kind of money around as a convenient method of exchange. People know about the concept so they're going to want to use it.

So probably what they'll be asking is, what should we use for our money?

It's the same question faced by a new nation. Look back at the US Dollar: people started with gold, a commodity, for exchange. Historically, people didn't need the gold as a commodity, per se. There weren't very many goldsmiths, there wasn't much of a ruling class, so what good was gold to the average person back then? Gold had intrinsic value but little utility except what the average person believed it was worth. Arguably the value was still real, but not fungible in the US at the time the US Dollar became a standard. At the time a person would need to travel a great distance to get to an economy where gold was directly fungible (for example, to Europe). The US economy just did not consume much gold – the same gold was just exchanged a lot.

Gold was a convenient method of exchange when the US Dollar became a standard.

I don't hold any gold, but in my opinion the historical popularity of gold is an important data point. What will most people accept in an exchange? I can't believe I have to spell it out! Gold, duh!

The "promissory note" US Dollar could be exchanged for a specific quantity of gold, right up until it was detached from its gold backing. My point is: the US Dollar was a currency based on a method of exchanging value, not debt. The choice of the word "promissory" did not imply that the dollar was based on debt obligations.

Does it make any difference if a currency is based on debt (loans) or credit (gold)? I think it does. A currency based on credit is a deflationary currency, and Bitcoin isn't the first deflationary currency in history. The US Dollar was a deflationary currency as long as it was backed by gold. Any currency that does not have value, or is not based on credit, must be based on debt and all such currency is purely inflationary. The limit of any debt-based or inflationary currency taken to its natural conclusion is to be completely worthless.

An anthropologist involved in pure guesswork and speculation ... well what a surprise.

Conveniently for him, without having a time machine to go back to observe exactly how people were using objects for trade in un-recorded history no-one will ever know if he is right or wrong.

Money is debt (credit)
Money is an accounting instruments, an abstract existence.
Money could be denominated in any unit.

No. That may happen later after previous systems collapse, like in Russia. But that's not what people originally do. He addresses this in all the links already provided.  

So no one ever traded 1 cow for 30 chickens and then traded 1 of those chickens for a horse shoe? Chickens are money in this scenario.

If he's only talking about precious metals, then okay.

This is a similar piece by him in a question and answer format:

http://www.nakedcapitalism.com/2011/08/what-is-debt-–-an-interview-with-economic-anthropologist-david-graeber.html

Very interesting take on how debt first appeared in societies.

It depends if you consider objects of universal value money or not.

There's zero evidence for that, says anthropologist and (social) anarchist David Graeber in his book Debt: The First 5000 Years, and also explaining it in this interview:

https://www.youtube.com/watch?v=zSnReXI4gKk#t=03m17s

A thread dedicated to this topic is long overdue.  

Money is an invention by the state.