Our response to Dmytri Kleiner's misunderstanding of money

[Rudd-O]

Reply moved to https://bitcointalk.org/index.php?topic=123798.0

[evoorhees]

And after all that, Dmytri is still correct. If you think bitcoin is going to replace govt currencies then you are so far out to left field you dont need to reply. This place is just like Apple forums. Fanboys. You do raise some good points though.

Typically an assertion like that is followed by an argument.  WHY do you think Bitcoin can't replace government currencies?

If you arent taxed how do you think all those highways and roads and thousands of other things are paid for? There is no centralization we see scams all the time and there is nothing you can do about it. Your computer gets hacked you are done. Dotn care how many backs up you have it takes a matter of seconds to empty your wallet once its broken in to and you will not be reimbursed by anyone. I can go on and on. Mostly the arguments why bitcoin is superior are just lousy points aka quick transaction times and low fees, yawn.

Ryann, listen carefully and I'll explain how things are paid for without taxation. It works like this: you take your money, and pay for the things you use. Simple. When you fly, you pay an airline and airport company. When you drive, you pay for a car. When you eat, you buy food. When you want internet service, you pay an ISP.

In the case of roads, the fact that they are -currently- paid for via taxation doesn't mean that without taxation they cannot be paid for. Indeed, the early days of roads in America, they were all privately run. Heard the term "turnpike?" That used to refer to private highways that were paid via tolls. And before you say, "but tolls are so obnoxious!" you should know that, once again, private industry solves that problem via either pre-paid subscription models or RFID drive through tolls. In Dubai, the "toll booths" are just small structures that cross over the freeway. They scan a sticker in your car window when you drive underneath at 80 miles per hour. Easy.

Roads are not hard to build, and it's easy to charge those who use the road for their usage. Far more complex services exist in the private marketplace... indeed the computer on which you're typing is far more complex than a road, and was "paid for" privately by private individuals. Should government pay for and manage all our computers?

And don't get me started on "if there is no centralization we see scams all the time"... It is the centralized State which is the largest scam of all.

[evoorhees]

Generally speaking I completely agree with the conclusion of your response, but there is one point you make which is just flat out wrong:

"The origin of money is barter. In fact, money derives directly and unavoidably from barter."

Nowhere in recorded history has money ever derived from barter. It has always derived from credit or the need for mobilization of armies. http://www.amazon.com/Debt-First-5-000-Years/dp/1933633867

<cough> No sorry.  Money is the most liquid good in a barter economy, and arises naturally.  And it does so, so quickly that there is no recorded example of a stable barter economy; at least not in the sense that some form of commodity didn't function as the monetary "change" in a barter transaction.  There are plenty of examples of societies that evolved money well before any need to raise or mobilize an army, even before the invention of writing in order to record same.

Don't argue with me, argue with David Graeber and history.

Heheheh the fact that you cite a book which reviews the past 5,000 years betrays a misunderstanding of money, which is much older than that. We are not talking about round metal coins here. "Money" was deerskins and seashells long before coins existed, and long before any of the more advanced financial instruments examined by Graeber.

It's you who is arguing with history. It does not take a rocket scientist to realize that 50,000 years ago cavemen were exchanging one good for another (barter). You agree, right? During this barter, a smart caveman would realize that if he traded not just for things he personally wanted, but things which others might want, then he could get more for his efforts. The first time a caveman realized this, and traded his meat for the fur which he knew another valued, money was discovered. As other cavemen realize that it's always easy to trade a fur to someone else, they begin using furs as a medium of exchange. This is money. The world did not fundamentally change when these first cavemen started behaving this way, there was no point in history when mankind shifted from "barter" to "money." It's a progressive, natural process of marginally favoring certain goods over others which leads to one or several goods tending to become used as money.

Money is thus inseparable from barter. Stated differently, we're all still bartering every day, and the item we prefer to barter for is now called Federal Reserve Notes, at least here in the US.

[Wekkel]

Money is thus inseparable from barter.

Perhaps I have misunderstood Graeber, but isn't one of his central themes that barter economies were not the start, but credit (like 'I do something for you, and you will do something for me in the future' -> credit)?

[lebing]

Generally speaking I completely agree with the conclusion of your response, but there is one point you make which is just flat out wrong:

"The origin of money is barter. In fact, money derives directly and unavoidably from barter."

Nowhere in recorded history has money ever derived from barter. It has always derived from credit or the need for mobilization of armies. http://www.amazon.com/Debt-First-5-000-Years/dp/1933633867

<cough> No sorry.  Money is the most liquid good in a barter economy, and arises naturally.  And it does so, so quickly that there is no recorded example of a stable barter economy; at least not in the sense that some form of commodity didn't function as the monetary "change" in a barter transaction.  There are plenty of examples of societies that evolved money well before any need to raise or mobilize an army, even before the invention of writing in order to record same.

Don't argue with me, argue with David Graeber and history.

Heheheh the fact that you cite a book which reviews the past 5,000 years betrays a misunderstanding of money, which is much older than that. We are not talking about round metal coins here. "Money" was deerskins and seashells long before coins existed, and long before any of the more advanced financial instruments examined by Graeber.

It's you who is arguing with history. It does not take a rocket scientist to realize that 50,000 years ago cavemen were exchanging one good for another (barter). You agree, right? During this barter, a smart caveman would realize that if he traded not just for things he personally wanted, but things which others might want, then he could get more for his efforts. The first time a caveman realized this, and traded his meat for the fur which he knew another valued, money was discovered. As other cavemen realize that it's always easy to trade a fur to someone else, they begin using furs as a medium of exchange. This is money. The world did not fundamentally change when these first cavemen started behaving this way, there was no point in history when mankind shifted from "barter" to "money." It's a progressive, natural process of marginally favoring certain goods over others which leads to one or several goods tending to become used as money.

Money is thus inseparable from barter. Stated differently, we're all still bartering every day, and the item we prefer to barter for is now called Federal Reserve Notes, at least here in the US.

This is a fantasy. A widespread fantasy which is talk in every economics 101 book, but a fantasy nonetheless. Economies have not historically been built to facilitate value exchange, but for other reasons, incomprehensible to economists. The problem arises because we have taken our economics and worked backwards - whereas what was needed was a comprehensive look at what actually took place (and is taking place today in primitive tribes around the world) in order to understand how money was created.

[Carlton Banks]

Generally speaking I completely agree with the conclusion of your response, but there is one point you make which is just flat out wrong:

"The origin of money is barter. In fact, money derives directly and unavoidably from barter."

Nowhere in recorded history has money ever derived from barter. It has always derived from credit or the need for mobilization of armies. http://www.amazon.com/Debt-First-5-000-Years/dp/1933633867

<cough> No sorry.  Money is the most liquid good in a barter economy, and arises naturally.  And it does so, so quickly that there is no recorded example of a stable barter economy; at least not in the sense that some form of commodity didn't function as the monetary "change" in a barter transaction.  There are plenty of examples of societies that evolved money well before any need to raise or mobilize an army, even before the invention of writing in order to record same.

Don't argue with me, argue with David Graeber and history.

Heheheh the fact that you cite a book which reviews the past 5,000 years betrays a misunderstanding of money, which is much older than that. We are not talking about round metal coins here. "Money" was deerskins and seashells long before coins existed, and long before any of the more advanced financial instruments examined by Graeber.

It's you who is arguing with history. It does not take a rocket scientist to realize that 50,000 years ago cavemen were exchanging one good for another (barter). You agree, right? During this barter, a smart caveman would realize that if he traded not just for things he personally wanted, but things which others might want, then he could get more for his efforts. The first time a caveman realized this, and traded his meat for the fur which he knew another valued, money was discovered. As other cavemen realize that it's always easy to trade a fur to someone else, they begin using furs as a medium of exchange. This is money. The world did not fundamentally change when these first cavemen started behaving this way, there was no point in history when mankind shifted from "barter" to "money." It's a progressive, natural process of marginally favoring certain goods over others which leads to one or several goods tending to become used as money.

Money is thus inseparable from barter. Stated differently, we're all still bartering every day, and the item we prefer to barter for is now called Federal Reserve Notes, at least here in the US.

This is a fantasy. A widespread fantasy which is talk in every economics 101 book, but a fantasy nonetheless. Economies have not historically been built to facilitate value exchange, but for other reasons, incomprehensible to economists. The problem arises because we have taken our economics and worked backwards - whereas what was needed was a comprehensive look at what actually took place (and is taking place today in primitive tribes around the world) in order to understand how money was created.

...and I'm still waiting for the part where you prove what Erik said to be a fantasy. Feel free to write another inconsequential paragraph about it.

[lonelyminer (Peter Šurda)]

Even if Graeber was correct in all the historical evidence he describe, at best that would prove that credit transactions pre-date spot transactions. In all his the examples he shows, whatever was used for money had already been a highly desired good prior to the record of it being used as a money. His own words show that he does not understand economics.

[evoorhees]

Generally speaking I completely agree with the conclusion of your response, but there is one point you make which is just flat out wrong:

"The origin of money is barter. In fact, money derives directly and unavoidably from barter."

Nowhere in recorded history has money ever derived from barter. It has always derived from credit or the need for mobilization of armies. http://www.amazon.com/Debt-First-5-000-Years/dp/1933633867

<cough> No sorry.  Money is the most liquid good in a barter economy, and arises naturally.  And it does so, so quickly that there is no recorded example of a stable barter economy; at least not in the sense that some form of commodity didn't function as the monetary "change" in a barter transaction.  There are plenty of examples of societies that evolved money well before any need to raise or mobilize an army, even before the invention of writing in order to record same.

Don't argue with me, argue with David Graeber and history.

Heheheh the fact that you cite a book which reviews the past 5,000 years betrays a misunderstanding of money, which is much older than that. We are not talking about round metal coins here. "Money" was deerskins and seashells long before coins existed, and long before any of the more advanced financial instruments examined by Graeber.

It's you who is arguing with history. It does not take a rocket scientist to realize that 50,000 years ago cavemen were exchanging one good for another (barter). You agree, right? During this barter, a smart caveman would realize that if he traded not just for things he personally wanted, but things which others might want, then he could get more for his efforts. The first time a caveman realized this, and traded his meat for the fur which he knew another valued, money was discovered. As other cavemen realize that it's always easy to trade a fur to someone else, they begin using furs as a medium of exchange. This is money. The world did not fundamentally change when these first cavemen started behaving this way, there was no point in history when mankind shifted from "barter" to "money." It's a progressive, natural process of marginally favoring certain goods over others which leads to one or several goods tending to become used as money.

Money is thus inseparable from barter. Stated differently, we're all still bartering every day, and the item we prefer to barter for is now called Federal Reserve Notes, at least here in the US.

This is a fantasy. A widespread fantasy which is talk in every economics 101 book, but a fantasy nonetheless. Economies have not historically been built to facilitate value exchange, but for other reasons, incomprehensible to economists. The problem arises because we have taken our economics and worked backwards - whereas what was needed was a comprehensive look at what actually took place (and is taking place today in primitive tribes around the world) in order to understand how money was created.

Ummmm I can assure you that almost none of my opinions are obtained from an Econ 101 textbook. I'm merely thinking inductively. If I were a caveman (which we know existed), and I had possession of some object (which we know occurred), I would sometimes trade it for other objects. Noticing other cavemen doing similar activities, I'd adjust my trades so as to acquire goods which could be traded easily to others.

Unless you can prove that my hypothesis there is wrong, then money was indeed formed naturally from barter. I'm not using a book to figure this out, I'm just using my brain.

[Rudd-O]

And before you say, "but tolls are so obnoxious!" you should know that, once again, private industry solves that problem via either pre-paid subscription models or RFID drive through tolls. In Dubai, the "toll booths" are just small structures that cross over the freeway. They scan a sticker in your car window when you drive underneath at 80 miles per hour. Easy.

Yes, tollbooths are shitty only when they're statist, because there's no incentive to make them not stupid and not slow.  When you have voluntary customers, the last thing you want is to ruin their trip with delais.

[evoorhees]

And before you say, "but tolls are so obnoxious!" you should know that, once again, private industry solves that problem via either pre-paid subscription models or RFID drive through tolls. In Dubai, the "toll booths" are just small structures that cross over the freeway. They scan a sticker in your car window when you drive underneath at 80 miles per hour. Easy.

Yes, tollbooths are shitty only when they're statist, because there's no incentive to make them not stupid and not slow.  When you have voluntary customers, the last thing you want is to ruin their trip with delais.

Bingo

[scribe]

And before you say, "but tolls are so obnoxious!" you should know that, once again, private industry solves that problem via either pre-paid subscription models or RFID drive through tolls. In Dubai, the "toll booths" are just small structures that cross over the freeway. They scan a sticker in your car window when you drive underneath at 80 miles per hour. Easy.

Yes, tollbooths are shitty only when they're statist, because there's no incentive to make them not stupid and not slow.  When you have voluntary customers, the last thing you want is to ruin their trip with delais.

Obviously never been on trains in England.

That said, I agree with the above. But unpicking "voluntary customers" brings up many issues around where situations are involuntary. Most state-vs-individual discussions seem to assume that people either act in accordance to their will, or forced to act against it by state forces. Sadly (or not) there are more powers in the world than the human race, which disrupts the notion of "voluntary will" on a day-to-day basis.

Where people are forced into a situation not because of will, nor of the state, should we be looking to a third model of institution, and therefore a third purpose of money? Or is all economic activity locatable along a 2-dimensional axis (heads/tails or vertical/horizontal in Dmytri's original article, IIRC)? Or is that a false dichotomy?

Genuinely interested in answers, as only really figuring this out as I go along.

[MoonShadow]

Ummmm I can assure you that almost none of my opinions are obtained from an Econ 101 textbook. I'm merely thinking inductively. If I were a caveman (which we know existed), and I had possession of some object (which we know occurred), I would sometimes trade it for other objects. Noticing other cavemen doing similar activities, I'd adjust my trades so as to acquire goods which could be traded easily to others.

Unless you can prove that my hypothesis there is wrong, then money was indeed formed naturally from barter. I'm not using a book to figure this out, I'm just using my brain.

In addition, it's a established fact that many aboriginal cultures did barter, and others had developed money out of that.  The fact was that they bartered between tribes, but used a gift economy within a tribe.  The American Indian tribes that existed near the East coast during the early colonial days would do this with other tribes as well as the European settlers.  Many island cultures would do the same, ultimately developing to the use of money such as Rai stones (http://en.wikipedia.org/wiki/Rai_stones).  And despite the long standing use of carved stones as money, the Yapese people had no concept of credit.  It only takes one counter example to disprove the theory, and there it is.

[Technomage]

Indeed you guys are talking about two different aspects of the economy. It's a fact that gift economies were actually very common within early communities. They did not barter amongst themselves, they simply shared everything by giving. In some societies there was actually competition on who gave the most. It was never "for free" however, there was always a non-written agreement that stated "you owe me something". So they were basically gift economies based on credit relations.

Between different communities or tribes barter was used. So was gifting. The size of the economy and the interconnections of different communities determine the importance of barter. As the economy gets bigger and involves many communities and individuals, barter becomes a much better system than a gift economy. Gift economy is quite natural in a family setup or in small communities but the importance of barter grows when the relationships of people in the economy change and become more complex.

[MoonShadow]

It was never "for free" however, there was always a non-written agreement that stated "you owe me something". So they were basically gift economies based on credit relations.

I don't agree with this statement, and would like you to support it.

[Roger_Murdock]

Ummmm I can assure you that almost none of my opinions are obtained from an Econ 101 textbook. I'm merely thinking inductively. If I were a caveman (which we know existed), and I had possession of some object (which we know occurred), I would sometimes trade it for other objects. Noticing other cavemen doing similar activities, I'd adjust my trades so as to acquire goods which could be traded easily to others.

Unless you can prove that my hypothesis there is wrong, then money was indeed formed naturally from barter. I'm not using a book to figure this out, I'm just using my brain.

This tracks my own thinking on the subject. I guess the two questions I have are (1) isn't this pretty much unknowable? How would we know if the late Thag Simmons,* prior to his untimely passing,  traded some of his mammoth meat for furs, planning to trade those furs for berries (what he really wanted)?  And (2) why does it matter how we got here? Let's assume that Graeber's got the story right, what are the practical implications?  Is anyone challenging Say's law which says that "products are paid for with products"?

*http://upload.wikimedia.org/wikipedia/en/6/65/Thagomizer.png

Indeed you guys are talking about two different aspects of the economy. It's a fact that gift economies were actually very common within early communities. They did not barter amongst themselves, they simply shared everything by giving. In some societies there was actually competition on who gave the most. It was never "for free" however, there was always a non-written agreement that stated "you owe me something". So they were basically gift economies based on credit relations.

Between different communities or tribes barter was used. So was gifting. The size of the economy and the interconnections of different communities determine the importance of barter. As the economy gets bigger and involves many communities and individuals, barter becomes a much better system than a gift economy. Gift economy is quite natural in a family setup or in small communities but the importance of barter grows when the relationships of people in the economy change and become more complex.

This is why I always say that I have no problem with socialism ... so long as it's voluntary. It seems to work reasonably well at the level of a family or small tribal community.  It just doesn't scale (and it should never be forcibly imposed by the threat of violence).  Your post reminded me of a video (which I couldn't find) talking about evolutionary psychology and why people tend to be somewhat uncomfortable with explicit exchange (i.e. quid pro quo, market exchange). Basically, explicit exchange was something you did with outsiders so it sends a message of social distance (which people don't necessarily like).  There was also the idea that many people long for the security (in a social sense) of a tribal economy.  But again, the solution is not to seek to impose that on the level of a modern and hugely-complex national economy. The "solution" is allowing people to voluntarily associate to form their own communities within (or even somewhat apart from) the larger economy.

[Gabi]

From wiki

David Kinley considers the theory of Aristotle to be flawed because the philosopher probably lacked sufficient understanding of the ways and practices of primitive communities, and so may have formed his opinion from personal experience and conjecture.

In his book Debt: The First 5000 Years, anthropologist David Graeber refutes the suggestion that money was invented to replace barter. The problem with this version of history, he suggests, is the lack of any supporting evidence. His research indicates that 'gift economies' were common, at least the beginnings of the first agrarian societies, when humans used elaborate credit systems. Graeber proposes that money as a unit of account was invented the moment when the unquantifiable obligation "I owe you one" transformed into the quantifiable notion of "I owe you one unit of something". In this view, money emerged first as credit and only later aquired the functions of a medium of exchange and a store of value.[7][8]

Contrary to the popular opinion, there is no evidence of a society or economy that relied primarily on barter.[9] Instead, non-monetary societies operated largely along the principles of gift giving to form productive reciprocal obligations[9] and debt.[10][11] According to Graeber, when barter did occur, it was usually with strangers or to mitigate potential robbery by enemies.[12] Both parties have to agree to sell and buy each other commodities. this is known as double coincidence of wants. what a person desires to sell is exactly what the other wishes to buy. In a barter system where goods are directly exchanged without the use of money,double coincidence of wants is an essential feature.

and a very nice interview wich explains tons of things here http://www.nakedcapitalism.com/2011/08/what-is-debt-%E2%80%93-an-interview-with-economic-anthropologist-david-graeber.html

it's a established fact that many aboriginal cultures did barter

Really? Lol

Contrary to the popular opinion, there is no evidence of a society or economy that relied primarily on barter.[9]

[Roger_Murdock]

Graeber proposes that money as a unit of account was invented the moment when the unquantifiable obligation "I owe you one" transformed into the quantifiable notion of "I owe you one unit of something". In this view, money emerged first as credit and only later aquired the functions of a medium of exchange and a store of value.

I guess I don't understand why we're calling that money. Thag gives you a mammoth fur. Under the (unwritten?) rules of your civilization, you owe Thag one mammoth fur. Is that I.O.U. recorded? Is it negotiable? Can it be redeemed only for a mammoth fur or for anything of equivalent value?

According to Graeber, when barter did occur, it was usually with strangers or to mitigate potential robbery by enemies.

That sounds reasonable. I'm not an anthropologist. But I'm not sure why that changes anything. Can a family get by without explicit exchange using money or even barter? Sure. My wife never pays me (at least in cash) for taking out the garbage. And a small tribe is basically just an extended family. But you do need explicit exchange when dealing with people from other tribes or for complex transactions which are required as the number of goods increases and labor becomes more specialized. So I'm not sure how much that changes the "story of money" or how much disagreement there really is here.

[MoonShadow]

it's a established fact that many aboriginal cultures did barter

Really? Lol

Contrary to the popular opinion, there is no evidence of a society or economy that relied primarily on barter.[9]

Note the key modifier there.  Of course there is no such evidence.  There is much evidence that barter occurred, but none that any particular society relied upon it, for as soon as one did, some commodity became the dominant money.  Yet, nor is there any evidence that no society has not relied (primarily or otherwise) on barter.  You can't prove a negative, and neither can Graeber, but that doesn't mean that his assumptions about how money develops is correct.  If I can find a single instance in the historical record, his theory is busted; but the problem is that the historical record is vague, and no one really kept records of early economic development because even in cultures that kept records no one knew there was any value to recording this information.

[lebing]

it's a established fact that many aboriginal cultures did barter

Really? Lol

Contrary to the popular opinion, there is no evidence of a society or economy that relied primarily on barter.[9]

Note the key modifier there.  Of course there is no such evidence.  There is much evidence that barter occurred, but none that any particular society relied upon it, for as soon as one did, some commodity became the dominant money.  Yet, nor is there any evidence that no society has not relied (primarily or otherwise) on barter.  You can't prove a negative, and neither can Graeber, but that doesn't mean that his assumptions about how money develops is correct.  If I can find a single instance in the historical record, his theory is busted; but the problem is that the historical record is vague, and no one really kept records of early economic development because even in cultures that kept records no one knew there was any value to recording this information.

Did you read the link posted?

"Now, I’m an anthropologist and we anthropologists have long known this is a myth simply because if there were places where everyday transactions took the form of: “I’ll give you twenty chickens for that cow,” we’d have found one or two (economies that worked that way) by now.
Read more at http://www.nakedcapitalism.com/2011/08/what-is-debt-%e2%80%93-an-interview-with-economic-anthropologist-david-graeber.html#yFpxiiB5eJMsrrBO.99 "

[lebing]

Generally speaking I completely agree with the conclusion of your response, but there is one point you make which is just flat out wrong:

"The origin of money is barter. In fact, money derives directly and unavoidably from barter."

Nowhere in recorded history has money ever derived from barter. It has always derived from credit or the need for mobilization of armies. http://www.amazon.com/Debt-First-5-000-Years/dp/1933633867

<cough> No sorry.  Money is the most liquid good in a barter economy, and arises naturally.  And it does so, so quickly that there is no recorded example of a stable barter economy; at least not in the sense that some form of commodity didn't function as the monetary "change" in a barter transaction.  There are plenty of examples of societies that evolved money well before any need to raise or mobilize an army, even before the invention of writing in order to record same.

Don't argue with me, argue with David Graeber and history.

Heheheh the fact that you cite a book which reviews the past 5,000 years betrays a misunderstanding of money, which is much older than that. We are not talking about round metal coins here. "Money" was deerskins and seashells long before coins existed, and long before any of the more advanced financial instruments examined by Graeber.

It's you who is arguing with history. It does not take a rocket scientist to realize that 50,000 years ago cavemen were exchanging one good for another (barter). You agree, right? During this barter, a smart caveman would realize that if he traded not just for things he personally wanted, but things which others might want, then he could get more for his efforts. The first time a caveman realized this, and traded his meat for the fur which he knew another valued, money was discovered. As other cavemen realize that it's always easy to trade a fur to someone else, they begin using furs as a medium of exchange. This is money. The world did not fundamentally change when these first cavemen started behaving this way, there was no point in history when mankind shifted from "barter" to "money." It's a progressive, natural process of marginally favoring certain goods over others which leads to one or several goods tending to become used as money.

Money is thus inseparable from barter. Stated differently, we're all still bartering every day, and the item we prefer to barter for is now called Federal Reserve Notes, at least here in the US.

This is a fantasy. A widespread fantasy which is talk in every economics 101 book, but a fantasy nonetheless. Economies have not historically been built to facilitate value exchange, but for other reasons, incomprehensible to economists. The problem arises because we have taken our economics and worked backwards - whereas what was needed was a comprehensive look at what actually took place (and is taking place today in primitive tribes around the world) in order to understand how money was created.

Ummmm I can assure you that almost none of my opinions are obtained from an Econ 101 textbook. I'm merely thinking inductively. If I were a caveman (which we know existed), and I had possession of some object (which we know occurred), I would sometimes trade it for other objects. Noticing other cavemen doing similar activities, I'd adjust my trades so as to acquire goods which could be traded easily to others.

Unless you can prove that my hypothesis there is wrong, then money was indeed formed naturally from barter. I'm not using a book to figure this out, I'm just using my brain.

"So really, rather than the standard story – first there’s barter, then money, then finally credit comes out of that – if anything its precisely the other way around. Credit and debt comes first, then coinage emerges thousands of years later and then, when you do find “I’ll give you twenty chickens for that cow” type of barter systems, it’s usually when there used to be cash markets, but for some reason – as in Russia, for example, in 1998 – the currency collapses or disappears.
Read more at http://www.nakedcapitalism.com/2011/08/what-is-debt-%e2%80%93-an-interview-with-economic-anthropologist-david-graeber.html#yFpxiiB5eJMsrrBO.99"

Like I said, it's for unintelligible reasons to us reasons that value exchange started. Our society is run by a monetary economy and for us to consider providing for our needs in another way is simply gibberish. That being said, for all of recorded history until a few thousand years ago, we did provide for our needs in another way entirely. Therefore, the exchange that we saw between tribes was usually for reasons that wouldn't "compute" in todays society. For example, many tribes give offerings to other tribes in order to insult them by showing how powerful they are that they can then afford to give so much to the other tribe. These types of scenarios only take place when your source of provision is derived from very "primitive" modes of provision whereby provisional reliance is personal or tribal.