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The Myth of the Barter Economy (2016)

• baud147258 7y ago
  The historical informations on the non-existence of barter economies was interesting, but then the article went into a nosedive with an anarcho-anticapitalist rant on the evils of money.
  • tobbe2064 7y ago
    > nosedive with an anarcho-anticapitalist rant on the evils of money This seems like a disproportional emotional response, considering that the article was roughly 30 paragraphs, out of which 1 was dedicated to "the evils of money" and 1 to the current existing anarchistic communities. I dont really care, but you might gain from understanding your own bias in this regard
    • baud147258 7y ago
      What I wrote might have used too strong words, but I feel like all the discussion around not-barter economy was just used to support the point the writer was doing on the evils of debts and money.
  • nerdponx 7y ago
    It's also interesting that the article seems subtly framed as a hit piece against Adam Smith. You have to get 2/3 of the way into the article before somebody says "you know nobody actually believes that, right?" Yes, Smith himself did believe it, which makes this an interesting article about anthropology and the history of economics. But the whole thing should have been structured differently.
• taneq 7y ago
  In games, even when the game is explicitly designed not to have currency, players will invent one in order to facilitate trade. It'd be strange if humans didn't do this in real life too.
  • mc32 7y ago
    Sure. But we are aware of the concept. It would be interesting to see this emerge in a population unaware or unexposed to the concept of money.
    • jkhdigital 7y ago
      Economists have known for a long time that there is something fundamental about the human condition that leads to the emergence of money, or some approximation of it that serves the same purposes. Where they have struggled to make solid progress is in formalizing the "frictions" that make money an essential component of equilibrium economic models.
      • k__ 7y ago
        The article states that exactly this is not the case.
        • jkhdigital 7y ago
          ...huh? The article talks about the lack of evidence for barter economies. How does that falsify my comment in any sense? Anyways, I made my statement based on what I've learned from reading academic research in economics, not on whatever this guy from The Atlantic said.
    • nerdponx 7y ago
      I imagine this has been studied to some extent in various uncontacted tribes. Does anyone have any information on that?
      • 317070 7y ago
        The first chapter in "Debt: the first 5000 years" deals with the issue.
  • xzcat 7y ago
    As an example, in Ark, people use cementing paste as a currency. It's very time-intensive to make, stacks a lot, is not terribly heavy, and high-level crafting and building needs it in solar-mass-esque quantities.
• sebsito 7y ago
  As Smith described, people didn't invent money straight away. First, resources like salt and metals; then stuff you can melt (easily divisible). Then official coins of equal weight to fight counterfeiting and inaccuracy of weight. I'm afraid this is one of the "history doesn't fit my ideology" pieces.
  • tobbe2064 7y ago
    Doesn't seem like you actually read the article... I'm afraid this is one of the "article title doesn't fit my ideology" comments.
  • Kbelicius 7y ago
    Not at all, it is actually Smiths ideas that don't fit history. Barter economics emerge from money not the other way around.
  • coldtea 7y ago
    >As Smith described, people didn't invent money straight away. First, resources like salt and metals; then stuff you can melt (easily divisible). None of these are barter. All of these are more like money...
  • emptyfile 7y ago
    What? Smith? As in Adam Smith the guy who died in the year 1790? I'm not a historian but I'm pretty sure his ideas about history aren't relevant to us in the year 2020.
    • eesmith 7y ago
      Might want to read the article first. The first two words after the title are "Adam Smith". Later text confirms that it's the same person, with "The man who arguably founded modern economic theory, the 18th-century Scottish philosopher Adam Smith, popularized the idea that barter was a precursor to money."
    • claudiawerner 7y ago
      The idea of Smith, Ricardo and Marx, many interested economists and philosophers of economics argue, can still be used very fruitfully to analyze current economic and societal conditions. The fact that some of their analyses were dropped as the discipline of economics grew out of political economy is not necessarily a sign that the analyses were deficient. Alan Freeman has some essays on the ideological motivations which led to their analyses of labour and capital being dropped.
• not_buying_it 7y ago
  David Graeber has a nice way of explaining money arising from IOU's in Debt: the first 5,000 years. It makes a lot of sense and basically explains why the barter myth is so impractical that it could never have been a reality in any sizable community.
  • searine 7y ago
    I think I've been through that book twice now and it's still a fresh read. Highly recommended.
    • QuesnayJr 7y ago
      The last chapter is quite poor. The rest of the book is interesting, but I would be interested to hear an evaluation by experts in the historical periods he covers.
    • Nicholas_C 7y ago
      It has a compelling premise but the reviews for it are not too kind so it remains on my to read list.
      • ksdale 7y ago
        I picked it up because it is so frequently recommended on HN, and it is much less...academic(?) than I was hoping for. It gets recommended as a great explanation of debt, but it read a lot more like a very biased opinion about debt coupled with what felt like rather cherry picked history. I'm going to try reading it again, but the first time didn't go well...
        • searine 7y ago
          >I'm going to try reading it again, but the first time didn't go well.. All history is viewed through the eyes of the author's politics. I accept that, and set my personal politics aside and considered his history. One of the major positives of this book is its ambitious scope. The narrative spans millenia of history and I respect that ambition. I don't agree with everything Graeber says but he proposes new ideas (to me at least). Those new ideas are fun to consider and think about.
• jkhdigital 7y ago
  It was a good article until the gift economy crap at the end. Game theory explains all of this quite well. Money is desirable because it makes transactions and economic calculation so much easier. As a pure abstraction, money is simply a ledger (https://www.minneapolisfed.org/research/sr/sr218.pdf https://www.minneapolisfed.org/research/sr/sr218.pdf). When humans live in small groups related by blood, they just keep the ledger in their heads (if at all) because the penalty of cheating is so great that no one will defect (exile from the tribe and a lonely death). When humans need to transact with people and there is uncertainty about (a) whether they will be able to punish cheating, and (b) whether they will ever meet this trading partner again, then they will use a more explicit and trustworthy form of money to reduce the risks. For most of human history the only real option here was some kind of physical token, which had to approximate the ledger abstraction: uniform in quality, easily divisible, easy to authenticate, with as inelastic a supply as possible. The modern sovereign state allows for fiat money, since the state can simply declare that its official currency is the ledger that everyone will use. It's quite efficient, since you can do things like maintain a banking system that exists primarily as numbers in a spreadsheet rather than vaults full of dusty gold bars. Our fractional reserve system also mingle debt and money, and for most of us the two are equivalent. This makes perfect sense when you consider that money is a claim on the future output of everyone who agrees to use the money. It's an EOU: everyone owes you. Thus, if you issue fiat currency against public debt, it's effectively an EOU as well since everyone in the economy is indirectly responsible for the eventual repayment of that debt. Of course, sovereign currencies have borders, so looking at the ledger used by governments to keep score amongst themselves is quite telling. However, when there is no socially accepted authority to dictate consensus, how do mutually disinterested individuals agree on a form of money? This was a pure thought experiment until the invention of Bitcoin, because the options were exceptionally limited: precious metals were so much better than anything else that had been tried, for reasons I won't go into here, that there really wasn't a choice. But with Bitcoin, you have a protocol for digital cash that can be used to create an infinite number of ledgers with the same desirable properties. How do we choose which one to use? The answer, of course, is proof-of-work.
  • naringas 7y ago
    > looking at the ledger used by governments to keep score amongst themselves is quite telling. how does one do this? do you mean looking at the currency exchnage market?
• TopHand 7y ago
  While this is a thought provoking article, it makes assumptions that are not necessarily true. If a person thinks in terms of resources and not in terms of products you can begin to see the fallacies. It is easy for a group with common interests to share resources. The problems begin to arise when the group doesn't have a resource that it needs. As an example, if the Iroquois lived in a region where there was no obsidian which they would want for making tools and hunting instruments, they would need to approach a neighboring community that has access to the material If that community didn't want the Iroquois to have that material because it would upset the balance of power in that this material could also be used for making weapons of war. If the other community already had all the resources it needed to comfortably survive, how would the Iroquois over come their reluctance to give them obsidian? For the Iroquois this is becoming a matter of survival of their people. It they don't have this resource they won't have the tools they need to farm or to hunt. This is just a simple example, with more complex societies the more complex the problems. In my life time, I have seen people try to sustain "gift economies". I remember the communes of the sixties. On paper they sounded quite reasonable. Most of them didn't survive or evolved into capitalistic economies. One last point. Slavery was not an out come of the invention of money. It was the out come of the invention of war. What do you do with enemy combatants that surrender? Do you just kill them? Not if your humane. You make them slaves.
  • Retric 7y ago
    Commune’s are unstable, but can work fine when separate from income streams. I am aware of one that lasted 30+ years slowly dissolving as no effort was made to add new members and people slowly left or died over time. Monastery’s demonstrates what it takes for such communities to last over hundreds of years. Effectively they must recruit, be economically viable, and avoid any single point of failure like having a specific leader.
    • TopHand 7y ago
      Monastery's receive resources from the Church.
      • 7y ago
• codingmess 7y ago
  "On paper, this sounds a bit like delayed barter, but it bears some significant differences." Yeah sorry, but it is a barter economy. They only frame it differently to get their papers published. Yes, it may work not exactly like described in the economics textbooks (and gift economies have some interesting specific properties). But I am really tired of people claiming everything in economics textbooks is to be taken absolutely literal, and if the real world is not like that, then classical economics has been refuted. Of course they use idealized models in the textbooks, including the rational actor. The economists are well aware that they are using simplified models.
  • learnstats2 7y ago
    I think there is a problem with teaching people a theory which is wrong. If currency vanished overnight, most people would not be producing enough material things to survive a barter economy. So life-by-barter doesn't ever make sense: it only makes sense if you are used to the idea of exchanging your value for currency.
    • codingmess 7y ago
      You don't need to barter 1:1 every time. Of course you can track of what people owe you, roughly. Maybe specific bartering gets more important with bigger societies, when it is not possible to keep track in one's brain anymore.
      • learnstats2 7y ago
        I think it's a stretch to call this barter, and I don't think this is even what (most) people do in the absence of currency. People do things for people they are unlikely to see ever again, just because it's a nice thing to do. You can't squeeze that into the definition of barter, at all.
        • codingmess 7y ago
          Just because people barter or keep scores, it doesn't mean they can't do other things, like be nice or give gifts occasionally. Honestly, to cut the discussion short: do you have kids? I have two kids. Maybe I am doing something wrong, but they are really not all that naturally generous and giving to each other. Must be the toxic capitalist environment they grew up in? How can I activate their socialist genes and make them want to share all their toys with each other?
• carapace 7y ago
  No mention of potlatch. > A potlatch is a gift-giving feast practiced by indigenous peoples of the Pacific Northwest Coast of Canada and the United States,[1] among whom it is traditionally the primary governmental institution, legislative body, and economic system. https://en.wikipedia.org/wiki/Potlatch https://en.wikipedia.org/wiki/Potlatch - - - - I have a crude "theory" that economic forms follow density: Small groups, families and small clans, operate more-or-less communally (not political Communism; I mean communal living. Sharing resources, etc.) Larger groups, tribes and neighborhoods, operate more-or-less on barter or favor-balancing. Beyond that, you get money evolving out of long-distance trade, and modern mercantile and financial (as contrasted with "just" economic) systems.
• mantrid84 7y ago
  If barter never existed, then how did Christopher Columbus and his many successors through out ages trade with natives in America or Indonesia? They definitely weren't using IOUs. there's already very good rebuttal to David Graeber claims by Robert P. Murphy [1]: "Finally, we have actual case studies of communities developing money prices from scratch: namely, prisoners who end up using cigarettes as the common medium of exchange. The classic work here is Radford's 1945 article, "The Economic Organization of a P.O.W. Camp." There is nothing in Radford's account that conflicts with the standard economists' story about the origin of money. The prisoners certainly weren't giving each other things from their Red Cross kits as gifts or as loans. No, they first were trading (in a state of direct exchange) and cigarettes quickly became the money in their community for all of the reasons that economists typically cite. And to reinforce the point we made earlier, Radford explains that the prices (quoted in cigarettes) of various items were posted on a board. If Graeber and his colleagues stumbled upon the ruins of this P.O.W. camp, they would presumably conclude that there was never a preexisting state of barter, because they only found boards listing prices quoted in terms of cigarettes. There were no boards listing the thousands of pairwise permutations of direct-exchange ratios, and so clearly the Mengerian story must have been wrong — so would go the erroneous reasoning of Graeber." [1] https://mises.org/library/have-anthropologists-overturned-menger https://mises.org/library/have-anthropologists-overturned-me...
  • matharmin 7y ago
    The article doesn't claim that barter never _existed_. It claims that there's no known case where it was a _precursor_ for money. In both examples you mentioned, people involved were already familiar with money, and used barter as a replacement - not the other way around.
  • rtkwe 7y ago
    > Trade did occur in non-monetary societies, but not among fellow villagers. Instead, it was used almost exclusively with strangers, or even enemies, where it was often accompanied by complex rituals involving trade, dance, feasting, mock fighting, or sex—and sometimes all of them intertwined. They talk about that and say barter generally did exist as trade between groups outside the local community. Which makes sense as an alternative to the gift economy. Also POW camps aren't really great examples because they're a) already coming from money based societies b) not producing their own goods, ie all incoming things are basically gifts especially in the POW camp and everyone has a similar set of goods initially and c) they're in confinement which distorts any group's dynamics. That last part of b is really because people all share 90% of the same set of resources and the main difference is the relative weights each person assigns to each item.
• nk1tz 7y ago
  The more interesting way to analyze history, rather than trying to evaluate the degree of barter, is to seek out the most saleable good which was in use at a given place and time. Humans must solve the problem of "coincidence of wants" (ie. You raise chickens and I'm a woodworker - do we always need each other's goods?). Naturally, they begin to use the most saleable good available to their community as "money" for trade. The most saleable good (the most marketable and easy to sell) is usually the good available to them which scores highest on the following five properties (imagine a radar chart): Divisibility, Durability, Portability, Fungibility, Scarcity. This way of thinking can provide a satisfying explanation of the emergence of gold as a global store of value. For more reading: https://mises.org/library/origin-money-and-its-value https://mises.org/library/origin-money-and-its-value
  • rmah 7y ago
    Except that historically and worldwide, silver, copper alloys and even grain were far more commonly used as money (medium of trade, unit of account, store of value) than gold.
    • nk1tz 7y ago
      They scored higher for those times and places / were actually available.
  • neaden 7y ago
    "Naturally, they begin to use the most saleable good available to their community as "money" for trade." Why do you assume this is natural? As the article talks about, there is no evidence of this happening vs things like a favor or prestige economy. Mises is an economist, not a historian.
    • nk1tz 7y ago
      Because from a first principles line of reasoning it makes the most sense to my brain. There is plenty of historical reading over at mises.org by various authors.
• rusabd 7y ago
  Is this article just rehashing a chapter from "The Debt, first 5000 years"?
  • rubidium 7y ago
    More or less. Graeber is cited.
• timwaagh 7y ago
  Not sure whether the expansion of this 'psychological debt model' is desirable. Because it's impossible to quantify such debts without money, it becomes more difficult to optimize allocation. Maybe the people in the woods haven't found water during many days. Suppose I have some water. More than I'd need for now, but not enough to last for years. I would not be inclined to give any to them. Sure, the woods people might make me a meal or sing for me which is nice, but my water supply is ultimately a guarantee for my long term survival. But if they did have even the concept of money, they might offer a high price, a price that allows me to say 'hey, with these resources i could build a house/attract a partner/drive away in a lambo and that's more useful to me than one month out of my seven months of water'. The antropologies make a compelling case for a different precursor to money and these gift economies are very similar to a money based economy. But money does offer the additional benefit of value quantification and security of deposits.
  • NohatCoder 7y ago
    If the woods people have been without water for days, and you deny them water, they are probably going to kill you and take your water. Remember, your first priority when encountering other humans is to survive, sometimes the right gift may save your life.
    • timwaagh 7y ago
      I wasn't very specific about the situation. You are right in the sense that trade makes sense only among equals, the rest would just be forced to give up their possesions. So we have to assume this isn't possible. We can assume I am standing on a cliff they can't easily reach. Or perhaps I have a few muscular non-thirsty buddies with me.
      • NohatCoder 7y ago
        Even if you are equal in strength, they may choose to fight you out of desperation, giving up some water is probably still preferable to the risk of a fight.
  • 7y ago
• samatman 7y ago
  I find Nick Szabo's argument that money-like collectibles were in fact the key technological advantage Homo Sapiens had over Homo Neanderthalensis an intriguing one: http://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Literature/LOTwinterschool2006/szabo.best.vwh.net/shell.html http://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CD... It's safe to say that something-like-money is substantially older than agriculture.
  • jmcmichael 7y ago
    This article makes the same mistakes that the OP's article does - assumes the truth of the myth of barter. It even uses the odd term 'time-offset barter', which I have never seen outside of libertarian/ancap analyses. Barter is a spot transfer, 'time offset barter' isn't barter but something else.
    • samatman 7y ago
      I'm quite sure you didn't read the article, which does no such thing.
      • jmcmichael 7y ago
        From the article: Barter requires a coincidence of interests. Alice grows some pecans and wants some apples; Bob grows apples and want some pecans. They just happen to have their orchards near each other, and Alice just happens to trust Bob enough to wait between pecan harvest time and apple harvest time. Assuming all these conditions are met, barter works pretty well. But if Alice was growing oranges, even if Bob wanted oranges as well as pecans, they'd be out of luck -- oranges and apples don 't both grow well in the same climate. If Alice and Bob didn't trust each other, and couldn't find a third party to be a middleman [L94] or enforce a contract, they'd also be out of luck. This is the canonical Myth of Barter, where some society is assumed to have existed that was so inconvenienced by the double coincidence of interests/wants/needs that it invented money. This never happened as there exists no evidence that a society existed that used barter as its main method of exchange; barter was used on the edges of society, spot transfers made between people who did not have the trust necessary to support debts. Here's the passage where he refers to 'time-lagged barter': Local but extremely valuable trade was, this essay argues, made possible among many cultures by the advent of collectibles, by the time of the Upper Paleolithic. Collectibles substituted for otherwise necessary but non-existent trusting long term relationships. If there had existed a high degree of sustained interaction and trust between tribes, or individuals of different tribes, so that they gave each other unsecured credit, this would have stimulated time-lagged barter trade. I did read the article. In fact, I read this article years ago shortly after it was published as back then I was an anarcho-capitalist, very interested in non-state solutions to money.
• wazoox 7y ago
  Ancient history is very interesting in these matters: back in the Bronze Age, kings such as Pharaoh and the Hittite, Assyrian, Minoan kings actually did international trade through "gifts". For instance the Pharaoh was in need of cedar wood, so he would write to the King of the Assyrians in Sumerian (the lingua franca of the time) "Dear cousin, I would like to send you some gifts but I'm out of boats. Cheers, Ramses". To which his "dear cousin" would reply "Dear cousin, I'm sending you these cedar logs so that you can build these boats you need. Did I tell you that drought has hit Niniveh and the corn is scarce? Yours, Sennahcherib". Then Pharaoh would send back boats full of grain, and so on.
  • wl 7y ago
    The thrust of your comment is more or less correct, but you make several significant errors in the details. Akkadian, not Sumerian was the language of international diplomacy in the period you speak of. Sennacherib came later in the Iron Age. And if the Egyptians needed cedar, they'd write to Byblos (which during the New Kingdom, was a tributary state more often than not), not Assyria.
    • aYsY4dDQ2NrcNzA 7y ago
      More, please.
      • lowdose 7y ago
        Would be awesome to get a good book referral for this indeed.
        • thaumasiotes 7y ago
          The original comment is almost certainly thinking of https://www.amazon.com/dp/0199858683/ https://www.amazon.com/dp/0199858683/ (Brotherhood of Kings: How International Relations Shaped the Ancient Near East). It's a very good book. A minor theme is indeed that Mesopotamian city-kings had a hard time trading with Egypt. Mesopotamia seems to have produced mostly textiles, which Egypt made domestically. What Egypt needed from international trade was copper and wood. All the Mesopotamian city-kings wanted gold, though, which came from Egypt. They could get this one time, by marrying a daughter to the Pharaoh. We have an example of Pharaonic correspondence with a king who repeatedly asked for unworked gold, finally sent a daughter over, received a mountain of gold in return, and concluded by complaining that the gold had been worked (into statues). I assume many of those statues got melted down. There is some discussion in https://www.amazon.com/dp/0670022667/ https://www.amazon.com/dp/0670022667/ (Carthage Must Be Destroyed: The Rise and Fall of an Ancient Civilization) of how the Phoenician city-states of the bronze age (source of cedar wood to Egypt) gradually succumbed over the centuries to Assyrian empire-building. It's not the main focus of the book though.
• leto_ii 7y ago
  This was a valuable read. I think a similar misunderstanding takes place with Hobbes's idea that the man in the state of nature lived in a war of all against all. There's simply no evidence that this ever happened, even though it has been used by Hobbes and others as a justification for the need of oppressive institutions. I think that if we start investigating the conceptual underpinnings of things quite a bit of economical and political thought will prove to be essentially unfounded and unscientific. This being said, we can't entirely fault people like Hobbes and Smith who didn't have access to the investigative tools that are now available. We can however fault today's social scientists who continue to build on faulty foundations instead of honestly reassessing their theories.
  • einpoklum 7y ago
    To over-simplify, Hobbes' "man in a state of war" is a noble or land-owner, who needs to keep control of his property against the landless peasantry and opposing nobles. This is reminiscent of how, say, in Athenian democracy, a citizen was a male property owner - and most of the population just didn't count; most people were reduced to slavery (much due to debt actually!). Some of this conception persisted all the way up to the original US constitution - women don't count, slaves don't count but are property etc. As for faulting Hobbes - you can fault him plenty. There was critical anti-establishment practice and thought, always - in varying forms.
• bluetomcat 7y ago
  A similar kind of a "delayed barter" economy did exist until recently in communist Bulgaria. Without any intervention from the government, people were exchanging items and doing mutual personal favours (sometimes against the law), all based on one's "social network". Knowing the shopkeeper in the butchery meant that he could reserve the fresh meat for you once it gets delivered, while you, for example, as a car repair guy in a state enterprise would provide him with some parts for his Lada from any leftover quantities. It was a hidden parallel economy that was "boosting" the planned economy. No kind of accounting was taking place between the exchanging parties, people were doing it for their own interest in the long run. These types of relations between people were (and still are) leading to many corrupt practices. A police officer or any kind of state representative would treat you differently if you were a part of their social circles. It's a toxic environment where you start putting greater value on connections rather than on actual work and self-development.
  • jmcmichael 7y ago
    Barter is a spot transfer. 'time offset barter' or 'delayed barter' isn't barter, and I've only seen this weird term used in libertarian/ancap/Austrian economists attempting to come to grips with the rather strong evidence against the myth of barter from which they derive their theories of money.
• milesvp 7y ago
  There was a great blog post I saw some years ago on HN about someone reminiscing about halloween candy trading as a kid. They remembered fondly about just how organized the trading quickly became. it was all barter, but there emerged quickly a candy franca. All the kids were willing to accept three muskateers bars because they knew others would accept them, and worst case they were at least tolerable to eat. While I agree that the barter economy as a rhetorical construct is most certainly made up, being very useful in freshman econ, I’m not convinced it money could possibly happen without first having trade in general. I would argue that money happens very quickly, which is why you’re not going to see a lot of evidence of extensive barter. If one childhood is enough to establish a candy currency, then you’d expect a similar currency to develop very quickly in any society.
  • karatestomp 7y ago
    The argument from the apparent source of this (Graeber's Debt) is that the progression of "barter, but that's inefficient so we create -> money, and then later we create -> debt" is historically inaccurate—instead, debt comes first, barter also but mostly for dealing with strangers, and then money is a later invention that has to do with sophisticated (relative to what came before) military logistics in large states/empires. This is an oversimplification but gives you the gist of the book's argument. So yes, it agrees that money is a relatively late development and trade existed before it and was largely barter-based but only when strangers or rival groups traded, but the central argument is that debt (basically) came first rather than last, and effectively precedes money, which is more a tool of debt than debt is a tool of money, if you will.
    • Double_a_92 7y ago
      Was it "formal" debt though, or more like "I'll give you some of my extra grain, because you seem kinda friendly, and you might repay me the favor if I happen to be in trouble in the future"?
      • karatestomp 7y ago
        Things like tally sticks for tracking debt were used, absent and before currency, it seems. Pretty widely. IIRC (it's been a while since I read Debt) the book asserts that very small tribal or family economies likely worked the way you describe, with informal, mental tallies of debts, and as communities got just a bit larger physical tallies took over, persisting for some time. A consequence of this is that debt isn't surely "less real" or less essential/natural than money, nor even newer, but in fact more real, more essential or natural (so to speak), and older.
• m4nu3l 7y ago
  At some point the article states that money "might just be a choice", but I think the article itself is pointing to the evidence it is not. The git economy in a village and the one in a community of friends have something in common. Another hint is yet in the article when it states "it's hard to imagine a gift economy working to build skyscrapers and iPhones". It seems pretty clear to me that the problem of a gift economy is that it doesn't scale. As long as every person in a group knows each other it is fairly easy to keep track of gifts given and received. This becomes impossible as the group grows and the number of people each person has to keep track of grows with O(n). Of course you can divide a big number of people into groups and have those groups use a gift economy between them by having leaders keeping track of gifts given and received between groups. And of course can also have multiple levels of subdivision. But the problem becomes clear. The system is quite centralized and there is no direct way for someone in one of those groups to exchange goods and services directly with someone of another one without the good or service going up the command chain and down to the other side.
  • pmoriarty 7y ago
    It sounds like you're criticising barter rather than a gift economy. Unlike in barter, in a gift economy no one keeps track of who owes what to whom, they just all give each other what they need. To give an example, I've long participated in the open source community, where I give away software that I've written and help others on IRC, in various forums, and on stackexchange. I don't ask for or expect anything in return, but I know I'm helping the community and I seek and accept aid from the community when I need it, by asking my own questions and using software freely given away by others. This example is of a well functioning gift economy which has scaled incredibly well.
    • s_y_n_t_a_x 7y ago
      So similar to socialism/communism you eventually run out of people's money when the people fleecing the system drain the well because it's not being tracked. I find your open-source analogy funny when we have all these maintainers of major projects protesting about lack of funding. The gift economy fails when it comes up against human nature at scale. Humans are lazy and greedy, you need to account for that. When you're not checking who owes what, you're ripe for exploitation.
• mgraczyk 7y ago
  Interesting that they mentioned The Rainbow Gathering as an example gift economy, rather than Burning man which is 7x larger and I would guess more widely known.
  • pmoriarty 7y ago
    Is Burning Man really a gift economy when it costs many hundreds of dollars to get in? It's more like an expensive theme park.
    • Uhhrrr 7y ago
      Inside, it is mostly a gift economy. Selling and barter are prohibited, except for ice and coffee sold by BMorg at Center Camp. There is some covert selling of drugs, but those are also largely gifted. It generally works because most people bring too much stuff anyway.
• trhway 7y ago
  in 199x in Russia the B2B economy was working basically on barter. The accounting/business software support for 5-10 segment length chains of "mutual credit" ("vzaimozachet") involving multiple business partners between your product and finally money (or something almost as liquid as money) was a feat of business software engineering separating leaders from the chaff - while the world line of a given barter chain may have been crossing spacelike/timelike boundary several times it still had to look correctly in all accounting frames of reference :) One of the things which emerged to be almost as good as money back then was "energy credits" with large power plants and networks serving as a kind of banks/clearing houses.
  • kiwidrew 7y ago
    This sounds absolutely fascinating. Do you have any links that go into more detail about the Russian B2B bartering and accounting?
    • trhway 7y ago
      not really, i'm 22 years out of that game. While most related info on web is in Russian, googling something like "russia multilateral mutual offset barter 1996" (any 199x year works to filter out links talking about modern situation) seems to bring links describing various facets of how it was back then.
• JackFr 7y ago
  Author seems ignorant of http://icm.clsbe.lisboa.ucp.pt/docentes/url/jcn/ie2/0POWCamp.pdf http://icm.clsbe.lisboa.ucp.pt/docentes/url/jcn/ie2/0POWCamp...
  • stephen_g 7y ago
    That is largely in line with what Graeber’s book says, in that most of the use we see of barter being out of necessity by people who already know how, and were familiar with using money (say, after their money-using civilisation collapsed), not as much before monetary systems existed (except for some trading between tribes). And then later you have one of their institutions basically becoming a central bank and issuing a currency!
• dnprock 7y ago
  The relationship between monies and goods has been murky. But it's kinda cool to cut a clear line to say that bartering economy exists before money. But I think they always co-exist. This relationship is more like chicken and egg. I did some research on how gold became money. Archeologists found evidence of gold usage dated 40,000 BC. When gold shows up in written history around 10,000 BC, it's already money. We did not really know if gold was good first or money first. I conclude that it's a little bit of both when humans first found it. I wrote about the topic in this article: https://bitflate.org/post/2019/11/29/how-gold-became-money.html https://bitflate.org/post/2019/11/29/how-gold-became-money.h... Going back further, I think we can say sex was the first kind of currency. Organisms exchange sex to reproduce. Today, we have Bitcoin. It's also unclear how we should define it: asset or money. The answer is it's a little bit of both. I hope the IRS will lower the tax rate on Bitcoin when they understand this.
• pharke 7y ago
  Money is just a representation of the debt incurred in a "gift" economy (a "debt" economy would be a better term for it) and allows the extension of those practices to strangers or people you don't trust or can't have some influence over. Gift economies still exist today in Western countries, often in rural areas among neighbors where you will do a favor, help out, or lend an item in exchange for likewise help at a later date. This works well in small groups that know each other well but breaks down when it becomes hard to track who did what for whom. Hence the invention of a tally system like money.
• jelliclesfarm 7y ago
  All marriages in ancient kingdoms were barters. It still exists today as ‘giving away’ of the bride. The female’s dna and germline gets the best it can buy with dowries and the bride’s attributes.
• einpoklum 7y ago
  I read about this anthropological/historical fact in David Graeber's excellent "Debt: The First 5000 Years", mentioned in the article. More about that book: https://en.wikipedia.org/wiki/Debt%3A_The_First_5000_Years https://en.wikipedia.org/wiki/Debt%3A_The_First_5000_Years or you can just download it. How's that fir a gift economy? :-) https://libcom.org/files/__Debt__The_First_5_000_Years.pdf https://libcom.org/files/__Debt__The_First_5_000_Years.pdf