[neaden]

"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]

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.

[neaden]

So what? It doesn't matter what makes sense to us, it matters what actually happened. Plenty of history makes no sense to me, but I would never just deny that it didn't happen for that reason.

[mcguire]

Are you saying that economics is, or should be interested in physical reality?

That might be hard to model mathematically.

[claudiawerner]

It's symptomatic of the economic way of thinking, in terms of game theory and systems that have emerged more or less out of nowhere. Explanation beyond the surface level of transfers of money is relegated to the work of economic historians. The way mainstream economics focuses on "shadow forms" (as Patrick Murray put it) purposefully excludes the supersensible movements below the forms of appearance of money, capital, labour, interest, rent, etc.

[2038AD]

> Why do you assume this is natural?

"The most saleable good" in our economy is money. The majority of explicit trades for goods and services involve money. Of course, that is now and we need to explain how this happened.

If I have a good another wants then I may accept something I don't directly want as payment. Of goods I indirectly value, I should value more the goods that are most saleable as they provide the shortest path to goods I directly value. Throughout this my valuations are based on expectations of others' future valuations. We can think of the path from regular good to money like a feedback loop. It's the economic bubble that doesn't burst (except when it does and we all switch to silver or furs).

Of course it's much harder for the value of the anomalously valued good to crash in a real economy because of things like taxation (this is almost chartalism).

[neaden]

"If I have a good another wants then I may accept something I don't directly want as payment. Of goods I indirectly value, I should value more the goods that are most saleable as they provide the shortest path to goods I directly value. Throughout this my valuations are based on expectations of others' future valuations. We can think of the path from regular good to money like a feedback loop. It's the economic bubble that doesn't burst (except when it does and we all switch to silver or furs)."

OK, and here is the key thing, can you provide an example of a pre-money society doing this? Because as far as I am aware there are no examples from either History or Anthropology showing that this happens. Once again it doesn't matter how much sense this idea makes to us coming from a post-money society if it is not what actually happened.

[2038AD]

> can you provide an example of a pre-money society doing this?

Can you provide me an example of a pre-money society becoming a post-money society? I can't name any. Unless your point is that any theory would be speculative (which is correct). I think even if we were to see the same evidence our conceptual models would be different but I'd very much sincerely like to see evidence which allows me to rethink things.

[yxhuvud]

Or, you can just accept a debt as the indirect thing. Which works because you live in a small society where everyone trusts each other.

Barter of goods is just inefficient in comparison.

[2038AD]

> Or, you can just accept a debt as the indirect thing

You can :-)

If the debt is non-transferable, so simply between me and the other guy, then it's not money. Debt like this may lead to money but its no more money than barter is. Of course that is not to say that debt cannot be money (even following a similar process). I want to be clear that I would make no normative claims over which goods (or similar things like debt) can become money.

I don't think the argument I made was strictly Misesian but it's similar and to his credit he was careful on this same point. In The Theory of Money and Credit he's clear that he doesn't argue for gold (or metallic currency) based on "intrinsic value". He even goes out of his way to specify cases where metallic tokens (like scheidemünze) may not be considered money in the narrower sense (but may in the broader) and includes things classifiable as debt in both the narrower sense of money and in the broader (as money-substitutes). One key difference I can see in his treatment of debt is that he considers it after the existence of commodity money.

> Which works because you live in a small society where everyone trusts each other

I think this is one of many arguments where there's the unexplored subjective element. Argument A and argument B look reasonable to person A and B because of their upbringings. I wonder how trusting you are compared to me and how your social experiences have differed.

> Barter of goods is just inefficient in comparison.

Yeah, it can be.

[TeMPOraL]

That works within a community. What about inter-community trade?

[yxhuvud]

Then you can of course barter, but where do you think most human interactions happened during that time? Inside small groups of people that trust each other or between different groups that doesn't?

[TeMPOraL]

Obviously the former, but I imagine the groups quickly split as the population grew, and met further groups as they expanded.