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by yxhuvud 2322 days ago
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.

2 comments

> 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.

That works within a community. What about inter-community trade?
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?
Obviously the former, but I imagine the groups quickly split as the population grew, and met further groups as they expanded.