[weatherlight]

An accounting system using knots isn't money, per ser. These systems of credit were based on mutual trust and social relations, often without a physical representation of money as we know it today.

Comparing this to coinage, the innovation of coins introduced a standardized physical object that could represent value, which allowed for a different kind of economic activity not solely based on personal trust and relationships. Coinage enabled transactions with strangers and facilitated trade over larger distances and among larger groups of people, where personal credit relationships were not feasible.

Money, has a specificity to it. In essence, while early credit systems were based on social relationships and trust within communities, coinage represented a more impersonal and widely accepted medium of exchange that did not necessarily rely on social bonds. This distinction is crucial because it allowed for the expansion of trade and the concept of money as an abstract unit of account, rather than a direct reflection of social debts and credits.

[progne]

Money-as-knots-in-a-rope sounds closer to the modern money-as-bits-on-a-plate than does money-as-metal-disks.

[weatherlight]

indeed, the comparison of quipu to modern digital money highlights the diversity of forms that 'money' can take. However, the fundamental difference lies in the functions and roles that these systems serve within their respective societies. The quipu was primarily an accounting tool, part of a complex system of record-keeping used by the Incas, which facilitated the administration of their economy, particularly in terms of tribute and state resources. It did not serve as a medium of exchange in the same way coins or modern digital money do.

modern money, whether digital or physical, serves several key functions: it is a medium of exchange, a unit of account, and a store of value. While the quipu certainly functioned as a unit of account, it's not clear that it served as a medium of exchange or a store of value. These are essential characteristics that define 'money' in the economic sense.

the impersonal nature of coinage and modern digital money allows them to facilitate trade and economic activity on a scale and with a degree of anonymity that's not possible with a system like quipu, which is deeply embedded in the social and political fabric of the society that uses it.

The transition to coinage and later to digittal transactions represents a move towards a more standardized, divisible, and portable form of money that can be used in a wide range of transactions, with or without a pre-existing relationship between the parties involved. This is quite different from the quipu, which was embedded in a specific cultural context and may not have been readily exchangeable or understood outside of that context.

So while it's tempting to draw parallels between ancient accounting systems and modern digital currencies, we must be careful not to conflate the two. Each serves its purpose within its particular economic and social milieu, with specific attributes and limitations that define its use as "money."

[zopa]

> It did not serve as a medium of exchange in the same way coins or modern digital money do.

Source for the confidence here? We know that a corvée economy existed, but I’m skeptical that we can rule out private quipo-based exchange. The evidence base is pretty thin; a lot of stuff didn’t survive Pizarro.

[weatherlight]

https://www.peruforless.com/blog/quipu/ https://en.wikipedia.org/wiki/Quipu?useskin=vector they were more like ledgers or logs... not money. (Early databases perhaps?)

[Wytwwww]

> Coinage enabled transactions with strangers and facilitated trade over larger distances and among larger groups of people, where personal credit relationships were not feasible.

Extensive trade international trade networks existed during the entire bronze age and the preceding periods without any coins, though. Coins are useful as an standardized accounting unit and are easy to transport but fundamentally are not that different from barter.

[monero-xmr]

I think there is a lot of fantasy thinking that ancient times didn’t use money. Trade is evident from the earliest times as proven through goods at burial sites that originated thousands of miles away. Trade necessitated commoditized assets as intermediary value stores, and common ones included salt and furs in addition to hard metal coins and commoditized metal objects like swords.

Social relationships are still important the higher you go in finance - it’s much easier to get a $100 million loan for a new building with a strong relationship with a banker than as a stranger, regardless of collateral.

I think a pre-commercial time where people didn’t care about money is a fiction.

[weatherlight]

There's a lot of anthropological and archaeological evidence to the contrary. People indeed had trade and exchanges in ancient times, but these did not aalways necessitate a formalized system of money as we understand it today. The early forms of trade were often based on complex systems of credit and debt that were deeply intertwined with social relationships and trust within communities. David Graeber's work, "Debt: the first 5000 years," highlights that for more than 5,000 years before the invention of coins, humans extensively used such credit systems to buy and sell goods, long before the existence of coins or cash.

While it is true that trade is evident from ancient times, with goods found at burial sites that originated thousands of miles away, this does not automatically imply that all trade was facilitated by a commoditized asset serving as a universal medium of exchange. In many cases, goods like salt, furs, and metal objects were indeed used in trade, but they were part of a broader system of barter and reciprocal exchange, which could function effectively without a standardized form of money.

Regarding the role of social relationships in finance, while it's accurate that relationships remain crucial, especially for large transactions in modern times, this does not discount the fact that in the past, community trust and social bonds were often the primary means of securing credit, not collateral or commoditized money. This is evident in how competitive markets and the scarcity of trust can affect transactions, as Graeber notes through an anecdote where mutual aid within a community was a given, not a transaction requiring formal repayment.

The idea of a pre-commercial time where 'people didn't care about money' may indeed be fictional, but it's more nuanced than simply saying they used money in the way we do now. They cared about value and exchange, but these were frequently managed through social mechanisms rather than through impersonal, commoditized money. It's essential to understand that the concept of money has evolved and that early forms of trade and credit were valid economic systems in their own right, even if they don't match the monetary systems we are familiar with today.

[monero-xmr]

My broader point is that certain people think that there is this utopian “pre money time” where capitalism didn’t exist. I believe capitalism is the default, free trade is the default, and the fundamental idea that people will engage in for-profit commerce is embedded into our psychologies.

[weatherlight]

capitalism, as a system defined by profit-driven markets and private ownership, is a relatively modern concept and not the default economic state throughout human history. earlier societies often operated on principles of reciprocity and communal sharing rather than for-profit trade. while the inclination to trade can be considered inherent, the forms and rules of trade have varied greatly across cultures and eras, shaped by differing social and political contexts.

[WalterBright]

> is a relatively modern concept and not the default economic state throughout human history

This is speculation.

> earlier societies often operated on principles of reciprocity and communal sharing rather than for-profit trade.

Any society that had specialization of labor did more than that. Heck, the American Indian tribes measured their individual wealth via horse ownership. They certainly engaged in trade with the intent of profit.

[nextaccountic]

horse ownership? that was after european contact, right?

[weatherlight]

That’s not speculation. Capitalism is more that just trading for profit. https://en.wikipedia.org/wiki/Capitalism

[keep_reading]

Of course knots aren't "money" because money also needs scarcity and a way to prevent forgery but we have plenty of other examples: Rai stones, cowrie shells, other rare things ...

[csomar]

So they invented the modern fiat monetary system before it was cool?