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Conflict reigns over the history and origins of money
- MrEfficiency 8y agoAs I've gotten older, I've stopped caring about these black and white style comparisons. Instead of saying that money was used to facilitate trade OR used to pack back debts, why not both? Given how useful money is, I only imagine that it solved many problems that many civilizations and villages ran into.
- ratman 8y agoRecent research from the Americas adds new questions to the debate. These investigations suggest that money independently appeared for different reasons and assumed different tangible forms in many parts of the world, starting thousands of years ago.
- thinkingemote 8y agoWhat I took from the article is that it was both, but that it started with paying back debts, and markets occured shortly because of that. So you get 100 shells for the debt of your daughter to a neighbour, now what will you do with these shells? Find stuff to buy. To me it seems like it's almost instantaneous, but you could imagine that there would be a period of time where the 100 shells couldn't be traded, they were there to represent the debt of the bride, which would be paid pack like any debt.
- FranzFerdiNaN 8y agoThis isn’t a debate. Historians and anthropologists actually have some idea of how the past works. I guess if you want some weird 19th century idea of the past you might want to talk to an economist.
- MikeSchurman 8y agoIf anyone is interested in this, Debt: The First 5, 000 Years by David Graeber is fascinating.
- JumpCrisscross 8y ago> guess if you want some weird 19th century idea of the past you might want to talk to an economist The myth appears to be that economists believe in the barter hypothesis. It was prompted by Adam Smith and subsequently disproven. Using the barter hypothesis as an argument against economics is like using Haeckel's embryos as an argument against evolution.
- mpax 8y agoI believe the barter hypothesis is already in Aristotle, so it’s perhaps several millenia old. Anyway, the issue does run deeper, since the barter theory is implicit in for instance theories of banking, inflation and the money supply. See “veil over barter”. It’s pretty important economists get it right.
- JumpCrisscross 8y ago> the barter theory is implicit in for instance theories of banking, inflation and the money supply No it isn't. (There isn't a single theory for any of banking, inflation or monetary theory.) If anything, modern economics starts with the fiction of a perfectly liquid medium of exchange that can be infinitesimally divided, borrowed and loaned. Low-liquidity economics (e.g. bartering) is an edge case to modern theories.
- 21 8y agoAnother fiction in modern economics is the rational man that always maximizes utility.
- JumpCrisscross 8y ago> Another fiction in modern economics is the rational man that always maximizes utility Nope, this is another fictional fiction. Homo economicus is a pedagogical tool and toy model. Utilitarian economics feature pretty much nowhere because defining a single utility function for real people is impossible. When modelling agents, it can be useful to start with a rationality assumption and then add complications. Or not. Depends on what you’re studying. The entire exercise of valuation, for example, asks “what would a rational person pay for this asset” and then looks to see if someone will sell it to you for less. The toy model is useful even if it doesn’t repreeent the present reality in the same way models of thermodynamic systems at equilibrium are useful.
- winstonewert 8y agoMy impression after reading Graeber's book was that he was probably right in questioning the simple story of a barter economy transitioning into a money economy. But he's way too simplistic in his own narrative. It is hard for me to see how people could start denominating debt in terms of money without at least some limited sense of using money to replace barter. He also seems to think that this is the foundation of all economic thought and thus he suggests that all of economics is wrong because they have assumed an incorrect origin of money. (I exaggerate, but not by much).
- Isamu 8y agoThere is something in that. You have to establish relative worth in order to assign a money value. That is, 1 pig is worth 10 chickens, or whatever. And 1 house is worth N pigs, and so on, assigning relative value to services also. It makes sense that relative value is established first by barter, but it is not such a stretch to think that people could work the same out relatively quickly, once the money value of one common thing is established.
- digi_owl 8y agoMy personal take on where coins came from is weights used with balance scales (and certain metals would be favored there as they would not change their weight much while stored). Also, i think i once read that at some point Japan used a system based on a standardized rice bowl. So in earlier days it may well have been easier to set the price of a service (or anything that involved laborers) based on the number of meals needed.
- dnautics 8y agoI loved debt: and I got a similar impression. Also I thought it was amusing that he criticized the barter theory of money on the grounds that it's self-serving for economists, when of course his model more correct though it may be, is self-serving for anthropologists.
- jahaja 8y ago
- leptoniscool 8y agohttps://en.m.wikipedia.org/wiki/History_of_money https://en.m.wikipedia.org/wiki/History_of_money