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The villager parable is too egalitarian. That's not really how it worked. For most of history, peasants were sustenance farmers, meaning they grew their own fo

The villager parable is too egalitarian. That's not really how it worked. For most of history, peasants were sustenance farmers, meaning they grew their own food and if the harvest was bad, they could starve. For them, there was no such thing as insurance and they really needed ways to reduce risk. For example, they'd feast their neighbors so that when times were hard, the neighbors would hopefully help them out in turn. Investing in close-knit relationships isn't like barter - it's more like informal credit. Kinship networks still work something like this today. And this meant they didn't really need money. Social obligations were everything. But how do people who aren't peasants themselves get food? By extracting rents and taxes, in return for protection and certain services, perhaps plowing fields. Local "big men" might take payment in kind, but for a more organized government, they'd collect taxes using money, which gave the peasants incentives to grow and sell food for money. So villages would monetize or demonetize depending on the state of nearby governments. A monetized society allows people who aren't farmers to buy food. It allows cities to exist. Therefore, civilization was built on military force, taxes, and rent extracted from peasants, who were the basis of a mostly agricultural economy. Be glad our civilization isn't built on sustenance farming anymore.

renehsz 14d ago
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thisrod 14d ago
Yes. This could be subtitled, "A rational financial system design process: how and why to fake it."
altmanaltman 14d ago
This is a pretty simplistic take as well. Like you end it with saying be glad our civilization isn't built on sustenance farming but in the previous line you say it was built on force, taxes and rent extraxted? Here's a simple counter factual: how do people who are peasants get anything other than food in your model? If they sell the food to get money, your civilization is already not built on sustenance farming and has a working currency. If they don't have money, they will barter which doesn't seem to exist in your model. Also yes, kinship is basically informal insurance where a community collectively takes care of each other. Its not what barter is.
- bluGill 14d ago
  The peasants had little use for anything else. They grew their own food and made their own clothes. What else did they need? Tools - either make it or do without.
  - altmanaltman 14d ago
    So why will everyone not do that, make their own food and clothes? Why will we ever need to trade? The comment specifically mentions people who are not peasants so in that model, there are people who do not grow food but do other things. If we already have a system like that, why will the farmer grow food and also spin clothes when they can just let someone else spin clothes and give them a bit of their food in exchange for that? How do you think trade guilds started? As I said, the comment had parts of truth but overall it simplies economics to an extent of a children's book.
    - strken 14d ago
      I was under the impression that if you go back far enough to a millennium ago, peasants weren't trading for iron or having a miller grind their grain, and they were definitely spinning their own yarn. I would welcome correction.
      - bluGill 14d ago
        There is a continuum. As iron became cheaper (even before the industrial revolution) peasants started trading for iron tools. It started with "the big man" owning a plow that everybody borrowed, but eventually the richer in the village would save up to buy their own (most families operated on a cycle of rich and poor depending on how grown up the kids where - just before they left home to seek their fortunes the farm was rich, just after the one heir had to support the aging parents, and the babies making them poor). Weather was the other factor, you could only save up if the crops did well. A large part of this was legal ability. If only the "big man" could own a plow there was no point in trying to save up for one. This ability to have your own increased the farms productivity, in turn allowing the family to buy more (but often they would split the farm so two kids could inherit) While you could grind your own grain, often "the big man" wouldn't allow it.
kmeisthax 14d ago
One additional wrinkle in all of this is that money was a very straightforward way to fund conquest. Soldiers are paid in coin minted by the army they work for and the conquered are required to pay taxes in the same coin. Conquered villages are thus required to monetize in the specific coin the conquerers made and the conquering soldiers are able to sell their coin for whatever service they need at whatever rate they set. At the risk of sounding incredibly pithy, the primary purpose of money over barter is to aid the tracking and collection of taxes.
sorokod 14d ago
Subsistence, not sustenance.
aeternum 14d ago
>By extracting rents and taxes, in return for protection and certain services, perhaps plowing fields. Why use the term extract rather than trade? Protection was quite valuable. Those peasants could have tried their luck planting a field in the middle of nowhere, far from any village. There was plenty of unused land. They didn't because the peasant and their family would not last long. This idea that civilization is somehow oppressive rather than a great achievement just doesn't make sense. Force is the natural way of things. Alone those peasants would likely have 100% of the harvest taken by force, whether it be by wild animals, roving bandits, even locusts. It's a far better deal to have some percentage of it taken in return for having it protected. In nature, protection is the thing that matters.
- blargey 14d ago
  It's entirely other humans that the lords offered protection from; peasants were near universally left to fend for themselves when it came to "animals and locusts". And they could handle nature just fine (for the technology level) and could very much move to more land "in the middle of nowhere", if local lords didn't complicate that issue. The idea of the old farmer-peasants as single-task specialists in the same vein as us city-dwellers is an anachronism.
  - aeternum 13d ago
    For sure and that doesn't decrease the value of the protection. There seems to be this somewhat quaint idea that the crops belong to the peasant because he/she planted and grew them. That's a very modern concept. In the natural world they belong to whatever entity is able to take them. Life has always been about grabbing as many macronutrients as you can by whatever means possible.
- DanHulton 14d ago
  > Those peasants could have tried their luck planting a field in the middle of nowhere, far from any village. Except not really. Peasants were considered the property of their lords. If they decided to go and “try their luck” at a neutral location and that was reported to their lord, armed men on horseback would be very likely to show up not long after, to return them back to the lord’s land, but not without a solid beating and/or maiming first. Sometimes, certain forms of civilization just are oppressive, rather than collaborative. They tend to be out-competed by forms that are less oppressive, true, but it’s not guaranteed and not always fast and not always permanent.
keybored 14d ago
> Be glad our civilization isn't built on sustenance farming anymore. This decree is by you and what army?
gwgundersen 14d ago
This is a fair point, and rhymes with other commentators’ feedback. I could have started with `Obligation -> Debt -> Money`, for example, and that strikes me as a better beginning. People need money to pay their debts, and this theme would re-appear at various levels of the hierarchy: the villager needs stones to pay taxes, the village needs black money to pay tribute, and so forth. I think this would add meaningful nuance to the "just so" motivations; money isn't solely motivated by trade but also by social obligations and political power. That said, I would not find a full Graeber-ization helpful. It wouldn't change the structure of the post, and I don't think Graeber's framework is useful for understanding much of the content, such as the Fed funds rate, the intra-bank clearinghouse, or correspondent banking.
TacticalCoder 14d ago
> Be glad our civilization isn't built on sustenance farming anymore. Oh sure, but that doesn't mean we have to accept as normal governments where leeches enriching themselves and their fat friends manage to create public debt of more than 100% of the GDP and make the money printer go brrrrrr everytime there is problem (which is another gigantic problem in itself). A country like France is officially 57% of the GDP in public spending for terribly bad services in return. Poor education, hospitals in terribly bad shapes, no doctors in villages, insane taxation (France has 400 different taxes, more than six times the number of taxes Germany has, for example) and an insane number of useless public servants working on collecting those unnecessary taxes. It's too easy of a mental shortcut to say: "We don't live in caves anymore, with the men hunting and the women feeding the kids, so everything we did was obviously perfect". BTW we had universities, roads, ships, etc. at a time where the effective tax rate on farmers was something like 2% yearly. And Greece and Rome were advanced civilizations. "By extracting rents and taxes" makes a lot of heavy lifting: there's quite a difference between something like a reasonable yearly tax rate on income/production and a planned economy.

renehsz 14d ago

[dead]

thisrod 14d ago

Yes. This could be subtitled, "A rational financial system design process: how and why to fake it."

altmanaltman 14d ago

This is a pretty simplistic take as well. Like you end it with saying be glad our civilization isn't built on sustenance farming but in the previous line you say it was built on force, taxes and rent extraxted? Here's a simple counter factual: how do people who are peasants get anything other than food in your model? If they sell the food to get money, your civilization is already not built on sustenance farming and has a working currency. If they don't have money, they will barter which doesn't seem to exist in your model. Also yes, kinship is basically informal insurance where a community collectively takes care of each other. Its not what barter is.

bluGill 14d ago
The peasants had little use for anything else. They grew their own food and made their own clothes. What else did they need? Tools - either make it or do without.
- altmanaltman 14d ago
  So why will everyone not do that, make their own food and clothes? Why will we ever need to trade? The comment specifically mentions people who are not peasants so in that model, there are people who do not grow food but do other things. If we already have a system like that, why will the farmer grow food and also spin clothes when they can just let someone else spin clothes and give them a bit of their food in exchange for that? How do you think trade guilds started? As I said, the comment had parts of truth but overall it simplies economics to an extent of a children's book.
  - strken 14d ago
    I was under the impression that if you go back far enough to a millennium ago, peasants weren't trading for iron or having a miller grind their grain, and they were definitely spinning their own yarn. I would welcome correction.
    - bluGill 14d ago
      There is a continuum. As iron became cheaper (even before the industrial revolution) peasants started trading for iron tools. It started with "the big man" owning a plow that everybody borrowed, but eventually the richer in the village would save up to buy their own (most families operated on a cycle of rich and poor depending on how grown up the kids where - just before they left home to seek their fortunes the farm was rich, just after the one heir had to support the aging parents, and the babies making them poor). Weather was the other factor, you could only save up if the crops did well. A large part of this was legal ability. If only the "big man" could own a plow there was no point in trying to save up for one. This ability to have your own increased the farms productivity, in turn allowing the family to buy more (but often they would split the farm so two kids could inherit) While you could grind your own grain, often "the big man" wouldn't allow it.

kmeisthax 14d ago

One additional wrinkle in all of this is that money was a very straightforward way to fund conquest. Soldiers are paid in coin minted by the army they work for and the conquered are required to pay taxes in the same coin. Conquered villages are thus required to monetize in the specific coin the conquerers made and the conquering soldiers are able to sell their coin for whatever service they need at whatever rate they set. At the risk of sounding incredibly pithy, the primary purpose of money over barter is to aid the tracking and collection of taxes.

sorokod 14d ago

Subsistence, not sustenance.

aeternum 14d ago

>By extracting rents and taxes, in return for protection and certain services, perhaps plowing fields. Why use the term extract rather than trade? Protection was quite valuable. Those peasants could have tried their luck planting a field in the middle of nowhere, far from any village. There was plenty of unused land. They didn't because the peasant and their family would not last long. This idea that civilization is somehow oppressive rather than a great achievement just doesn't make sense. Force is the natural way of things. Alone those peasants would likely have 100% of the harvest taken by force, whether it be by wild animals, roving bandits, even locusts. It's a far better deal to have some percentage of it taken in return for having it protected. In nature, protection is the thing that matters.

blargey 14d ago
It's entirely other humans that the lords offered protection from; peasants were near universally left to fend for themselves when it came to "animals and locusts". And they could handle nature just fine (for the technology level) and could very much move to more land "in the middle of nowhere", if local lords didn't complicate that issue. The idea of the old farmer-peasants as single-task specialists in the same vein as us city-dwellers is an anachronism.
- aeternum 13d ago
  For sure and that doesn't decrease the value of the protection. There seems to be this somewhat quaint idea that the crops belong to the peasant because he/she planted and grew them. That's a very modern concept. In the natural world they belong to whatever entity is able to take them. Life has always been about grabbing as many macronutrients as you can by whatever means possible.
DanHulton 14d ago
> Those peasants could have tried their luck planting a field in the middle of nowhere, far from any village. Except not really. Peasants were considered the property of their lords. If they decided to go and “try their luck” at a neutral location and that was reported to their lord, armed men on horseback would be very likely to show up not long after, to return them back to the lord’s land, but not without a solid beating and/or maiming first. Sometimes, certain forms of civilization just are oppressive, rather than collaborative. They tend to be out-competed by forms that are less oppressive, true, but it’s not guaranteed and not always fast and not always permanent.

keybored 14d ago

> Be glad our civilization isn't built on sustenance farming anymore. This decree is by you and what army?

gwgundersen 14d ago

This is a fair point, and rhymes with other commentators’ feedback. I could have started with `Obligation -> Debt -> Money`, for example, and that strikes me as a better beginning. People need money to pay their debts, and this theme would re-appear at various levels of the hierarchy: the villager needs stones to pay taxes, the village needs black money to pay tribute, and so forth. I think this would add meaningful nuance to the "just so" motivations; money isn't solely motivated by trade but also by social obligations and political power. That said, I would not find a full Graeber-ization helpful. It wouldn't change the structure of the post, and I don't think Graeber's framework is useful for understanding much of the content, such as the Fed funds rate, the intra-bank clearinghouse, or correspondent banking.

TacticalCoder 14d ago

> Be glad our civilization isn't built on sustenance farming anymore. Oh sure, but that doesn't mean we have to accept as normal governments where leeches enriching themselves and their fat friends manage to create public debt of more than 100% of the GDP and make the money printer go brrrrrr everytime there is problem (which is another gigantic problem in itself). A country like France is officially 57% of the GDP in public spending for terribly bad services in return. Poor education, hospitals in terribly bad shapes, no doctors in villages, insane taxation (France has 400 different taxes, more than six times the number of taxes Germany has, for example) and an insane number of useless public servants working on collecting those unnecessary taxes. It's too easy of a mental shortcut to say: "We don't live in caves anymore, with the men hunting and the women feeding the kids, so everything we did was obviously perfect". BTW we had universities, roads, ships, etc. at a time where the effective tax rate on farmers was something like 2% yearly. And Greece and Rome were advanced civilizations. "By extracting rents and taxes" makes a lot of heavy lifting: there's quite a difference between something like a reasonable yearly tax rate on income/production and a planned economy.