Money did *not* evolve from barter

[painlord2k]

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

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.

This is true because Adam Smith and other, at their times saw this happen.
For example: in the 13 Colonies tobacco leaves were used a money for a considerable time.
This is true for furs in many place where animals were hunted for them to be sold.
Salt was used in the ancient times as money and soldiers in ancient Egypt were paid in grain.

Coins of gold/silver/copper were introduced just a few centuries BC. An earlier adopter was King Croesus of Lydia.
But this is, probably, just a simple way to standardize the coinage.

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[xxjs]

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

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.

This is true because Adam Smith and other, at their times saw this happen.
For example: in the 13 Colonies tobacco leaves were used a money for a considerable time.
This is true for furs in many place where animals were hunted for them to be sold.
Salt was used in the ancient times as money and soldiers in ancient Egypt were paid in grain.

Coins of gold/silver/copper were introduced just a few centuries BC. An earlier adopter was King Croesus of Lydia.
But this is, probably, just a simple way to standardize the coinage.

True.

You can even find local, short lived strange moneys nowadays. In Poland, before Solidarnosc, the prices were fixed, and the zloty was not freely exchangable, and people were desperate to save. Some bought an extra refrigerator, the thought was that everybody needed one and it was durable. So the refrigerators got some moneyness. It was short lived, because when everybody had three, there was no additional exchange value any more. I visited the country at the time. The story was told to me by a polish person. I am not sure it is true.

If it is true, it was a real waste. Better with money without intrinsic value.

[markm]

So in short, you people do not read, you just make up out of your own childhood's fairy-tales the same fairy-tales you were told to put you asleep way back when; the very fairy-tales the reading linked to debunks.

Geniuses.

-MarkM-

[amagimetals]

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

What the heck is universal value? Even gold doesn't have intrinsic value. It has subjective value. Hence the Subjective Theory of Value.

[ShireSilver]

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.

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

LOL, I guess the author of the article never bothered to do an image search on "ancient coins". If he did he'd quickly find out that there's a whole lot of them that don't have rulers' images on them.

[xxjs]

Since this thread started I have read a part of Graebers book. He is very much a anthropologist. His strories are quite funny, but definitely not economic. He is kind of fixed upon the argument that the development of money from barter as described by Smith is taken out of thin air, and that debt existed first.

I have no problem with that, and it is quite interesting how he describes detbt being a form of glue holding communities together with responsibility.

However, I would expect merchants that does not have a social responsibility towards each other would prefer to clear all debt before they parted on new trade adventures around the world, not knowing if they ever would see each other again.

Debt can be money, but needs trust between participants. Real money does not need that, and for the purpose of trade, money is therefore preferable. For the purpose of cementing a relationship, debt will do better.

[herzmeister]

However, I would expect merchants that does not have a social responsibility towards each other would prefer to clear all debt before they parted on new trade adventures around the world, not knowing if they ever would see each other again.

I take it that such merchants didn't exist before leaders sent them around the world (essentially funding them) and along the (ancient) silk road to bring back home precious spices. All that to please the proto-consumerist plebs, all hail the king!

[jago25_98]

That's a really good video in the OP. It covers so much. I learnt a lot and that's saying something since I've read the book.

Part of what it covers though and really blowing the lid off the myth is that generally barter didn't precede money. What he's saying is that barter did happen, but it was a very rare - you'd only use it when you met a foreign tribe and weren't killing each other.

So what happened instead? - it's all on the tab. Things were different back then. Everyone knew everyone. So you'd just remember things roughly as you would with a friend or relative, and square up later on if you want.  That's the key message that this thread is trying to communicate.

It's a very interesting thing because where I see this kind of trade I tend to see peace and success. I think it's a more natural system. It doesn't scale of course but I find it an interesting marker. 

There's loads more in the video worth listening to in the background. I love the bit mentioning that the last case of a husband selling his wife because she cheated on him was in 1923! It's been all downhill from there!!
Another nugget mentioned which I think is brilliant is how the headscarf was used in Greece to show women who are high class, married and to be respected - other women were not allowed to wear them and tended to be prostitutes!

[mobodick]

Money is an abstract idea, so how could some government/king come up with it?

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.

Not only that, but it favored reproduction and conglomeration.
Which resulted in local shortages and thus a tit-for-tat economy.
When you can feed off of nature in a reasonable way within a community that will take care of you when you grow old you don't feel the need to secure your future and so posession becomes less of a deal.

[mobodick]

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

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.

This is true because Adam Smith and other, at their times saw this happen.
For example: in the 13 Colonies tobacco leaves were used a money for a considerable time.
This is true for furs in many place where animals were hunted for them to be sold.
Salt was used in the ancient times as money and soldiers in ancient Egypt were paid in grain.

Coins of gold/silver/copper were introduced just a few centuries BC. An earlier adopter was King Croesus of Lydia.
But this is, probably, just a simple way to standardize the coinage.

True.

You can even find local, short lived strange moneys nowadays. In Poland, before Solidarnosc, the prices were fixed, and the zloty was not freely exchangable, and people were desperate to save. Some bought an extra refrigerator, the thought was that everybody needed one and it was durable. So the refrigerators got some moneyness. It was short lived, because when everybody had three, there was no additional exchange value any more. I visited the country at the time. The story was told to me by a polish person. I am not sure it is true.

If it is true, it was a real waste. Better with money without intrinsic value.

I was there at the time.
The thing was not so much that refrigerators were money. Everything was money.
There were large shortges on 'luxury' goods and we even had coupons to secure basic foods in stores. Nevermind gasoline.
Any electrical equipment was valued highly and i can imagine refrigerators being quite valuable since they are always needed.
They were just extremely rare and so IF you got the chance to secure one you did it because, you know, you had kids, and they will marry one day and you want your kids to at least have a fridge. Or something similar.
In general some black market import was increasingly tollerated and those goods found their way as bartering articles and symbols of pride and belief in an open economy.

[muyuu]

I think it's pretty obvious that barter and "debt" (as favour exchange) coexisted. Money - honest money - was an evolution of both. Note that barter and favour exchange still exist today, so this evolution was not exclusive or destroying of the previous customs.

As societies became bigger it was not possible to trace favour exchanges and it's quite evident only barter and money were feasible.

Honest money is without the shadow of a doubt an evolution of barter. You can even count it as barter itself, you are exchanging goods that are valuable on their own, and easily measurable so on top of their use you had their universal exchangeability use = money.

It doesn't matter how much you want to warp the words to sound original: honest money is just a second level of barter. Staple barter if you will.

State-backed money is a wholly different thing. It's pretty much what he's explaining in the video.

[Severian]

Alexander del Mar

I'm glad you brought up the greatest economic historian, numismatist and metallurgist in American history.

archive.org search (29 items): creator:"Del Mar, Alexander, 1836-1926"

In particular, History of monetary systems: a record of actual experiments in money made by various states of the ancient and modern world, as drawn from their statutes, customs, treaties, mining regulations, jurisprudence, history, archæology, coins, nummulary systems, and other sources of information is a great overview that won't be found in any other book. It was Del Mar at the height of his powers and opinions. I recommend it highly to any bitcoiner with an interest in the history of money.

Del Mar was very much in favor of giving the power of seigniorage over to the State but I think even he would be hardpressed to hold to that view today.

[nwbitcoin]

I think most of what he is saying is subjective, and while I agree with a lot of what he says about modern life, I am far more dubious of his historical knowledge.

For instance, the idea of slaves as being a bad thing is so solid in modern western thinking, that to think of it as a career move in the ancient world would seem strange. If we were to think of any paid employment as slavery today, any further statements you made would be considered nonsense.

However, you need to think like this to make the most sense of the evidence we still have of the past.

The problem is that when we look at historical events, we always put them in the context of modern life, and   that does warp how you put your ideas together leading to a story of the past that never happened.

[mobodick]

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.  

David Graeber fails to understand that money is an emergent phenomenon and moneys come and go on all levels.
Even his example of a farmer giving a cow away can be seen as a 'memory money' because the function of money in society is to act as IOUs.

Money is an necessity in any slightly complex society. There is a real need for something like money when your towns marketplace becomes seriously popular.
History will mostly remember the big ones, of course, and those were the state organized ones.
But many money systems have existed and many money systems still pop up under different economic circumstances and political situations.

He's talking about mesopotamia, but money is way way older.
We have absolutely no information about the first occurence of money, not even close.
We do know that all ancient civilizations had completely worked out monetary systems for use in their situation. They were mature systems designed for a goal.
The earliest examples we can find were examples of instituted moneys which suggests there is a whole genesis of the idea of money that is fully undocumented.

So in fact all he's saying is there is no evidence either way and makes no strong arguments about why it would not emerge bottom up. And he has current reality against him in which moneys evolve bottom up all the time. I don't see why this would not happen in an earlier society.

[meowmeowbrowncow]

Debt ledger systems were around just as long any type of barter system.

[marcus_of_augustus]

Debt ledger systems were around just as long any type of barter system.

Yes, many failed civilisations used debt ledgers, it is well documented. The diminishing marginal returns from the added complexity is what does them in.

Modern Western world has basically recently morphed into a giant debt ledger system now that all the banks have been tied together in a risk sharing network of electronic ledgers and cash and assets held outside the ledger system is being outlawed.

[MagicBit15]

Very controversial subject. I like to look back on how it was when they were just notes to represent how much gold you have. Greed kinda formed a mind of it's own, imagine that?

[mobodick]

Debt ledger systems were around just as long any type of barter system.

Yes, many failed civilisations used debt ledgers, it is well documented. The diminishing marginal returns from the added complexity is what does them in.

Modern Western world has basically recently morphed into a giant debt ledger system now that all the banks have been tied together in a risk sharing network of electronic ledgers and cash and assets held outside the ledger system is being outlawed.

All previous civilizations were failed ones..

[Wouter Drucker]

So he's saying no governments, no markets. That would mean we would have this great new currency that would never fly because there would never form a market.

[Mike Christ]

So he's saying no governments, no markets. That would mean we would have this great new currency that would never fly because there would never form a market.

I'm fairly certain people don't lie down to die in the case of no-government