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by ybx 3809 days ago
> Money is an artifact of the state; always has been, always will.

This is patently false. Money has existed before states, and it has existed without states.

1 comments

There is almost no archeological evidence to support your claim. There is ample evidence supporting my claim.

Money (specie: often in the form of coinage but not limited to such) was invented when a warlord or monarch captures riches (mines, cities), strikes coins with his visage, uses the coins to pay his soldiers (who are otherwise awful credit risks), then demands taxes from the free peasantry, creating a market economy in the process. States create markets. Markets require states. If for no other reason than to provide protection over the transaction with the threat of coercion.

Before money existed, the free peasantry used credit. The historical evidence shows that first came credit, then came money, then came barter. The exact opposite of what Adam Smith and most economists believe.

  The historical evidence shows that first came credit, then came money, then came barter.
Can I get a citation on this? Literally any citation that money came before barter will work.
David Graeber's Debt, The First 5000 years page 49-50. He has a bunch of citations in that manuscript which are fascinating as well.
It does refute it. What looked like barter on closer inspection was really credit. As in "I'll give you three chickens for that cow. I know this isn't a fair exchange but we'll mark the exchanges on this stick and later when I have something you want we'll sort it out." The stick was a record of the transaction. Sometimes the record itself was exchanged. This last step is how money emerged from credit.
I fully agree with you about debt/credit. If I give you something without getting anything in return, that can be considered debt.

The point I'm specifically trying to come to grips with is the idea that money came before barter: considering that money is used as a token that is itself bartered for goods or services, I can't understand how money came before barter. It just doesn't make sense, using money is barter.

The idea isn’t that money came before barter - barter has always been around on the fringes of things. It’s that credit came before money & that credit tokens backed by a credible issuer turned out to be extremely useful as tokens of exchange & units of account. Hence it’s credit that evolves into money, not the things you might have bartered occasionally. Barter was for exchange with people you didn’t trust & didn’t have any kind of on-going relationship with & was therefore rare & fairly irrelevant economically. Anyone worth doing business with had some kind of credit relationship with your state anyway.
I'll answer your question: barter came after money because the barter systems that emerged came after money and they marked to a currency to measure the barter transaction. IOW, they used a virtual currency. Even Charlemagne's empire defined a virtual currency that was used hundreds of years after the empire fell apart and Charlemagne never even ever struck coin but only left behind a specification of the HRE currency.
So I just read the pages you cited, and everything there is talking about recorded history. Barter has been in use since at least 12000BC, according to archaeological records. Your citation doesn't really refute my statement.

(For anyone who wants to follow along, the PDF can be found at https://libcom.org/files/__Debt__The_First_5_000_Years.pdf)

> Barter has been in use since at least 12000BC

The concept of debt predates the concept of barter a long time. Barter requires judging things of equal value. Debt however is easy to understand for humans regardless of ability to have the concept of possession (help me today and i help you tomorrow). I see no reason to believe that money or barter would become before debt in human development.

I fully agree with you about debt/credit. If I give you something without getting anything in return, that can be considered debt.

The point I'm specifically trying to come to grips with is the idea that money came before barter: considering that money is used as a token that is itself bartered for goods or services, I can't understand how money came before barter. It just doesn't make sense, using money is barter.

To me it seems more natural to assume that money would emerge from barter. Barter is only fair to a certain extent. As you (OP) mentioned, in bartering one party will "most likely always lose" while that isn't necessarily always true in pure black and white thinking eventually a barter system would become difficult to maintain in an economy (early or late). Now that would assume that one good or service in the exchange has more worth than the other end of the barter.

I see barter as an early, rugged form of money. Many early civilizations would trade goods such as cows or other animals in exchange for services or other goods. Technically those cows or whatever else WERE a currency. You could give someone 3 cows to help you do X, Y, Z. Replace cow with 300 gold coins and there isn't an enormous difference because each only has as much value as you allow it.

Eventually through barter you'd realize maybe you don't want to give all your cows away or perhaps people begin to realize that sure maybe now they have 3 cows since they did X, Y, Z for you but now the person they need stuff from doesn't need cows because they have 100 cows. Naturally I think currency (coin, paper money... etc) would develop from this to form a more "universal" token for barter so that it could then be more easily used by whoever receives it.

You misunderstand the concept of barter. It was actually an informal, unrecorded socially-based debt system. Read "Debt, the first 5,000 Years" for a good explanation.
Try asking what came first, law or private property (the answer is private property): the implications of that realization are far more important compared to asking whether or not barter existed before money (it did). Also, you can frame it so that debt is conceived of as a type of barter; ie - i barter a debt of equivalent value I herewith owe you in exchange for this item you're offering to give to me as a consequence of that promise.
Where can one read more about this?
"The Ascent of Money" by Niall Ferguson is my favorite introduction to the subject. It may or may not support parent's claims.
Before credit was gold, which throws a wrench in your beliefs.

I don't know if livestock domestication would be said to be a precursor to gold in some places.