Re: From Barter to Blockchains - WTF is… Money?
Razer
g2s at riseup.net
Sun Aug 6 08:53:32 PDT 2017
On 08/06/2017 01:15 AM, Jason McVetta wrote:
> People interested in economics may enjoy reading historian David
> Graeber's
Fuck Graeber and everything he ever wrote. Even if he has any valid
thesis it's not an original thought and I can find similar elsewhere.
Hes a hack.
For the record, Graeber's not a historian. He's an anthropologist, a
degree which which admittedly requires a good understanding of history,
but it's not the same educational regimen, and certainly doesn't share
the same goals, as being a historian. Anthropologists are prone to
'making shit up'. Historians have a bit of a harder time doing that.
Speculation isn't encouraged.
If you look at where he's employed, the London School of Economics. and
his tenure at Yale (the CIA's recruiting grounds), it's easy to discern
he's a literal fraud as a progressive OR anarchist
Graeber was one of the people who hijacked Occupy and totally perverted
it's intent, and he now totally perverts the meaning and intent of the
word "Anarchist" by being a fanboy of the Syrian Kurd YPG and it's
militia, who are actively and knowingly colluding with an imperial
nation, the US, for a PIECE OF EARTH, AND BORDERS!
> David Graeber @davidgraeber Aug 2
>
> David Graeber Retweeted Wladimir
>
> wouldn't it be nice if this were true
>
> Wladimir
> @vvanwilgenburg
>
> Turks believe there is US “secret” plan to deploy forces to Afrin to
> fulfill Kurds’ long-held dream reaching Sea
>
>
Whose long-held dream? It would seem, as with most tribal groups
untampered by "anthropologists' like Graeber, the Kurds as a society are
happiest right where they are, in their ancestral lands, un-restrained
or hampered by other's territorial desires. Part of their problem
historically is they've been murderous assholes, so passage to just
about anywhere has historically been blocked by people hostile to them.
Then the nation-states came, and like the Roma in Europe, they're "just
in the way" of territorial expansion by those nations. But I don't feel
sorry for them. They're right in there with Bandera of Ukraine, and the
Jewish mercenaries of Irgun, both of which collaborated with the NAZIS,
for a piece of land, hedging their bet that the Germans might win WWII.
Graeber also forced the progressive faction of the Democratic Party down
everyone's throats at OWS by colluding with a cabal of media-savvy
status-seekers to modify the voting system at general assemblies,
re-interpreting the "Block" to essentially mean you voted yourself out
of the process, when the "Block" was intended to STOP the process until
some overwhelmingly wrong issue was resolved. Because democracy is
SUPPOSED TO move slowly towards a goal, to avoid mistakes that might
terminate that democracy. And it did. It meant all the prog-libs could
'pack' the general assemblies and vote in their interest, instead of
occupy's. And when it disbanded, they MARKETED IT, as if the owned some
brand. Occupy Credit Cards, Bumper Stickers for your french-fry diesel SUV.
Rr
> excellent book, /Debt: The First 2000 Years/. (Available free at
> https://archive.org/details/Debt-The_First_5000_Years)
>
> Graeber argues that a) no actually-existing historical society used
> barter as a primary component of their economic system; and b)
> debt-money significantly predates both hard currency and markets.
>
> Full text of the relevant chapter follows:
>
>
> Chapter Two
>
>
>
> THE MYTH OF BARTER
>
> For every subtle and complicated
> question, there is a perfectly simple
> and straightforward answer, which is
> wrong.
>
> — H.L. Mencken
>
> WHAT IS THE DIFFERENCE between a mere obligation, a sense that
> one ought to behave in a certain way, or even that one owes something
> to someone, and a debt, properly speaking? The answer is simple:
> money. The difference between a debt and an obligation is that a debt
> can be precisely quantified. This requires money.
>
> Not only is it money that makes debt possible: money and debt ap-
> pear on the scene at exactly the same time. Some of the very first
> writ-
> ten documents that have come down to us are Mesopotamian tablets
> recording credits and debits, rations issued by temples, money owed
> for rent of temple lands, the value of each precisely specified in
> grain
> and silver. Some of the earliest works of moral philosophy, in
> turn, are
> reflections on what it means to imagine morality as debt — that
> is, in
> terms of money.
>
> A history of debt, then, is thus necessarily a history of money — and
> the easiest way to understand the role that debt has played in human
> society is simply to follow the forms that money has taken, and the
> way money has been used, across the centuries — and the arguments
> that inevitably ensued about what all this means. Still, this is
> neces-
> sarily a very different history of money than we are used to. When
> economists speak of the origins of money, for example, debt is always
> something of an afterthought. First comes barter, then money; credit
> only develops later. Even if one consults books on the history of
> money
> in, say, France, India, or China, what one generally gets is a
> history
> of coinage, with barely any discussion of credit arrangements at all.
> For almost a century, anthropologists like me have been pointing out
>
>
>
> 22
>
>
>
> DEBT
>
>
>
> that there is something very wrong with this picture. The standard
> economic-history version has little to do with anything we observe
> when we examine how economic life is actually conducted, in real
> communities and marketplaces, almost anywhere — where one is much
> more likely to discover everyone in debt to everyone else in a dozen
> different ways, and that most transactions take place without the use
> of currency.
>
> Why the discrepancy?
>
> Some of it is just the nature of the evidence: coins are preserved in
> the archeological record; credit arrangements usually are not.
> Still, the
> problem runs deeper. The existence of credit and debt has always been
> something of a scandal for economists, since it's almost
> impossible to
> pretend that those lending and borrowing money are acting on purely
> "economic" motivations (for instance, that a loan to a stranger is
> the
> same as a loan to one's cousin); it seems important, therefore, to
> begin
> the story of money in an imaginary world from which credit and debt
> have been entirely erased. Before we can apply the tools of
> anthropol-
> ogy to reconstruct the real history of money, we need to understand
> what's wrong with the conventional account.
>
> Economists generally speak of three functions of money: medium
> of exchange, unit of account, and store of value. All economic text-
> books treat the first as primary. Here's a fairly typical extract
> from
> Economics, by Case, Fair, Gartner, and Heather (1996):
>
> Money is vital to the working of a market economy. Imagine
> what life would be like without it. The alternative to a mon-
> etary economy is barter, people exchanging goods and services
> for other goods and services directly instead of exchanging via
> the medium of money.
>
> How does a barter system work? Suppose you want crois-
> sants, eggs and orange juice for breakfast. Instead of going to
> the grocer's and buying these things with money, you would
> have to find someone who has these items and is willing to
> trade them. You would also have to have something the baker,
> the orange juice purveyor and the egg vendor want. Having
> pencils to trade will do you no good if the baker and the or-
> ange juice and egg sellers do not want pencils.
>
> A barter system requires a double coincidence of wants for
> trade to take place. That is, to effect a trade, I need not only
> have to find someone who has what I want, but that person
> must also want what I have. Where the range of traded goods
> is small, as it is in relatively unsophisticated economies, it is
>
>
>
> THE MYTH OF BARTER
>
>
>
> 23
>
>
>
> not difficult to find someone to trade with, and barter is often
> used. 1
>
> This latter point is questionable, but it's phrased in so vague a
> way that
> it would be hard to disprove.
>
> In a complex society with many goods, barter exchanges in-
> volve an intolerable amount of effort. Imagine trying to find
> people who offer for sale all the things you buy in a typical trip
> to the grocer's, and who are willing to accept goods that you
> have to offer in exchange for their goods.
>
> Some agreed-upon medium of exchange (or means of pay-
> ment) neatly eliminates the double coincidence of wants prob-
> lem. 2
>
> It's important to emphasize that this is not presented as something
> that actually happened, but as a purely imaginary exercise. "To see
> that society benefits from a medium of exchange" write Begg, Fischer
> and Dornbuch {Economics, 2005), "imagine a barter economy." "Imag-
> ine the difficulty you would have today," write Maunder, Myers, Wall,
> and Miller {Economics Explained, 1991), "if you had to exchange your
> labor directly for the fruits of someone else's labor." "Imagine,"
> write
> Parkin and King {Economics, 1995), "you have roosters, but you want
> roses." 3 One could multiply examples endlessly. Just about every
> eco-
> nomics textbook employed today sets out the problem the same way.
> Historically, they note, we know that there was a time when there
> was no money. What must it have been like? Well, let us imagine an
> economy something like today's, except with no money. That would
> have been decidedly inconvenient! Surely, people must have invented
> money for the sake of efficiency.
>
> The story of money for economists always begins with a fantasy
> world of barter. The problem is where to locate this fantasy in time
> and space: Are we talking about cave men, Pacific Islanders, the
> Ameri-
> can frontier? One textbook, by economists Joseph Stiglitz and John
> Driffill, takes us to what appears to be an imaginary New England or
> Midwestern town:
>
> One can imagine an old-style farmer bartering with the black-
> smith, the tailor, the grocer, and the doctor in his small town.
> For simple barter to work, however, there must be a double
> coincidence of wants . . . Henry has potatoes and wants shoes,
> Joshua has an extra pair of shoes and wants potatoes. Bartering
>
>
>
> 24
>
>
>
> DEBT
>
>
>
> can make them both happier. But if Henry has firewood and
> Joshua does not need any of that, then bartering for Joshua's
> shoes requires one or both of them to go searching for more
> people in the hope of making a multilateral exchange. Money
> provides a way to make multilateral exchange much simpler.
> Henry sells his firewood to someone else for money and uses
> the money to buy Joshua's shoes. 4
>
> Again this is just a make-believe land much like the present, except
> with money somehow plucked away. As a result it makes no sense:
> Who in their right mind would set up a grocery in such a place? And
> how would they get supplies? But let's leave that aside. There is a
> simple reason why everyone who writes an economics textbook feels
> they have to tell us the same story. For economists, it is in a
> very real
> sense the most important story ever told. It was by telling it, in
> the
> significant year of 1776, that Adam Smith, professor of moral
> philoso-
> phy at the University of Glasgow, effectively brought the
> discipline of
> economics into being.
>
> He did not make up the story entirely out of whole cloth. Already
> in 330 bc, Aristotle was speculating along vaguely similar lines
> in his
> treatise on politics. At first, he suggested, families must have
> produced
> everything they needed for themselves. Gradually, some would presum-
> ably have specialized, some growing corn, others making wine, swap-
> ping one for the other. 5 Money, Aristotle assumed, must have emerged
> from such a process. But, like the medieval schoolmen who occasion-
> ally repeated the story, Aristotle was never clear as to how. 6
>
> In the years after Columbus, as Spanish and Portuguese adven-
> turers were scouring the world for new sources of gold and silver,
> these vague stories disappear. Certainly no one reported
> discovering a
> land of barter. Most sixteenth- and seventeenth-century travelers
> in the
> West Indies or Africa assumed that all societies would necessarily
> have
> their own forms of money, since all societies had governments and all
> governments issued money. 7
>
> Adam Smith, on the other hand, was determined to overturn the
> conventional wisdom of his day. Above all, he objected to the notion
> that money was a creation of government. In this, Smith was the
> intel-
> lectual heir of the Liberal tradition of philosophers like John
> Locke,
> who had argued that government begins in the need to protect private
> property and operated best when it tried to limit itself to that
> function.
> Smith expanded on the argument, insisting that property, money and
> markets not only existed before political institutions but were
> the very
> foundation of human society. It followed that insofar as government
>
>
>
> THE MYTH OF BARTER
>
>
>
> 25
>
>
>
> should play any role in monetary affairs, it should limit itself
> to guar-
> anteeing the soundness of the currency. It was only by making such an
> argument that he could insist that economics is itself a field of
> human
> inquiry with its own principles and laws — that is, as distinct
> from, say
> ethics or politics.
>
> Smith's argument is worth laying out in detail because it is, as I
> say, the great founding myth of the discipline of economics.
>
> What, he begins, is the basis of economic life, properly speaking?
> It is "a certain propensity in human nature . . . the propensity
> to truck,
> barter, and exchange one thing for another." Animals don't do this.
> "Nobody," Smith observes, "ever saw a dog make a fair and deliberate
> exchange of one bone for another with another dog." 8 But humans, if
> left to their own devices, will inevitably begin swapping and
> comparing
> things. This is just what humans do. Even logic and conversation are
> really just forms of trading, and as in all things, humans will
> always
> try to seek their own best advantage, to seek the greatest profit
> they
> can from the exchange. 9
>
> It is this drive to exchange, in turn, which creates that division of
> labor responsible for all human achievement and civilization. Here
> the
> scene shifts to another one of those economists' faraway
> fantasylands —
> it seems to be an amalgam of North American Indians and Central
> Asian pastoral nomads: 10
>
> In a tribe of hunters or shepherds a particular person makes
> bows and arrows, for example, with more readiness and dex-
> terity than any other. He frequently exchanges them for cattle
> or for venison with his companions; and he finds at last that
> he can in this manner get more cattle and venison, than if he
> himself went to the field to catch them. From a regard to his
> own interest, therefore, the making of bows and arrows grows
> to be his chief business, and he becomes a sort of armourer.
> Another excels in making the frames and covers of their little
> huts or moveable houses. He is accustomed to be of use in this
> way to his neighbours, who reward him in the same manner
> with cattle and with venison, till at last he finds it his interest
> to dedicate himself entirely to this employment, and to become
> a sort of house-carpenter. In the same manner a third becomes
> a smith or a brazier; a fourth a tanner or dresser of hides or
> skins, the principal- part of the clothing of savages . . .
>
> It's only once we have expert arrow-makers, wigwam-makers, and
> so on that people start realizing there's a problem. Notice how,
> as in
>
>
>
> 26
>
>
>
> DEBT
>
>
>
> so many examples, we have a tendency to slip from imaginary savages
> to small-town shopkeepers.
>
> ' But when the division of labor first began to take place, this
> power of exchanging must frequently have been very much
> clogged and embarrassed in its operations. One man, we shall
> suppose, has more of a certain commodity than he himself has
> occasion for, while another has less. The former consequently
> would be glad to dispose of, and the latter to purchase, a part
> of this superfluity. But if this latter should chance to have noth-
> ing that the former stands in need of, no exchange can be made
> between them. The butcher has more meat in his shop than
> he himself can consume, and the brewer and the baker would
> each of them be willing to purchase a part of it. But they have
> nothing to offer in exchange . . .
>
>
>
> In order to avoid the inconveniency of such situations, every
> prudent man in every period of society, after the first establish-
> ment of the division of labor, must naturally have endeavored
> to manage his affairs in such a manner, as to have at all times
> by him, besides the peculiar produce of his own industry, a
> certain quantity of some one commodity or other, such as he
> imagined that few people would be likely to refuse in exchange
> for the produce of their industry."
>
> So everyone will inevitably start stockpiling something they figure
> that everyone else is likely to want. This has a paradoxical effect,
> because at a certain point, rather than making that commodity less
> valuable (since everyone already has some) it becomes more valuable
> (because it becomes, effectively, currency):
>
> Salt is said to be the common instrument of commerce and
> exchanges in Abyssinia; a species of shells in some parts of
> the coast of India; dried cod at Newfoundland; tobacco in
> Virginia; sugar in some of our West India colonies; hides or
> dressed leather in some other countries; and there is at this day
> a village in Scotland where it is not uncommon, I am told, for
> a workman to carry nails instead of money to the baker's shop
> or the ale-house.' 2
>
>
>
> THE MYTH OF BARTER
>
>
>
> 27
>
>
>
> Eventually, of course, at least for long-distance trade, it all boils
> down to precious metals, since these are ideally suited to serve
> as cur-
> rency, being durable, portable, and able to be endlessly
> subdivided into
> identical portions.
>
> Different metals have been made use of by different nations
> for this purpose. Iron was the common instrument of com-
> merce among the ancient Spartans; copper among the ancient
> Romans; and gold and silver among all rich and commercial
> nations.
>
>
>
> Those metals seem originally to have been made use of for this
> purpose in rude bars, without any stamp or coinage . . .
>
>
>
> The use of metals in this rude state was attended with two very
> considerable inconveniencies; first with the trouble of weigh-
> ing; and, secondly, with that of assaying them. In the precious
> metals, where a small difference in the quantity makes a great
> difference in the value, even the business of weighing, with
> proper exactness, requires at least very accurate weights and
> scales. The weighing of gold in particular is an operation of
> some nicety . . . 13
>
> It's easy to see where this is going. Using irregular metal ingots is
> easier than barter, but wouldn't standardizing the units — say,
> stamp-
> ing pieces of metal with uniform designations guaranteeing weight and
> fineness, in different denominations — make things easier still?
> Clearly it
> would, and so was coinage born. True, issuing coinage meant govern-
> ments had to get involved, since they generally ran the mints; but
> in the
> standard version of the story, governments have only this one limited
> role — to guarantee the money supply — and tend to do it badly, since
> throughout history, unscrupulous kings have often cheated by debasing
> the coinage and causing inflation and other sorts of political
> havoc in
> what was originally a matter of simple economic common sense.
>
> Tellingly, this story played a crucial role not only in founding the
> discipline of economics, but in the very idea that there was
> something
> called "the economy," which operated by its own rules, separate from
> moral or political life, that economists could take as their field
> of study.
>
>
>
> 28
>
>
>
> DEBT
>
>
>
> "The economy" is where we indulge in our natural propensity to truck
> and barter. We are still trucking and bartering. We always will be.
> Money is simply the most efficient means.
>
> Economists like Karl Menger and Stanley Jevons later improved
> on the details of the story, most of all by adding various mathemati-
> cal equations to demonstrate that a random assortment of people with
> random desires could, in theory, produce not only a single commodity
> to use as money but a uniform price system. In the process, they also
> substituted all sorts of impressive technical vocabulary (i.e.,
> "inconve-
> niences" became "transaction costs"). The crucial thing, though,
> is that
> by now, this story has become simple common sense for most people.
> We teach it to children in schoolbooks and museums. Everybody knows
> it. "Once upon a time, there was barter. It was difficult. So
> people in-
> vented money. Then came the development of banking and credit." It
> all forms a perfectly simple, straightforward progression, a
> process of
> increasing sophistication and abstraction that has carried humanity,
> logically and inexorably, from the Stone Age exchange of mastodon
> tusks to stock markets, hedge funds, and securitized derivatives.' 4
>
> It really has become ubiquitous. Wherever we find money, we also
> find the story. At one point, in the town of Arivonimamo, in Madagas-
> car, I had the privilege of interviewing a Kalanoro, a tiny
> ghostly crea-
> ture that a local spirit medium claimed to keep hidden away in a
> chest
> in his home. The spirit belonged to the brother of a notorious local
> loan shark, a horrible woman named Nordine, and to be honest I was
> a bit reluctant to have anything to do with the family, but some
> of my
> friends insisted — since after all, this was a creature from
> ancient times.
> The creature spoke from behind a screen in an eerie, otherworldly
> qua-
> ver. But all it was really interested in talking about was money.
> Finally,
> slightly exasperated by the whole charade, I asked, "So, what did you
> use for money back in ancient times, when you were still alive?"
>
> The mysterious voice immediately replied, "No. We didn't use
> money. In ancient times we used to barter commodities directly, one
> for the other ..."
>
>
>
> The story, then, is everywhere. It is the founding myth of our
> system of
> economic relations. It is so deeply established in common sense, even
> in places like Madagascar, that most people on earth couldn't imagine
> any other way that money possibly could have come about.
>
> The problem is there's no evidence that it ever happened, and an
> enormous amount of evidence suggesting that it did not.
>
>
>
> THE MYTH OF BARTER
>
>
>
> 29
>
>
>
> For centuries now, explorers have been trying to find this fabled
> land of barter — none with success. Adam Smith set his story in
> aborigi-
> nal North America (others preferred Africa or the Pacific). In
> Smith's
> time, at least it could be said that reliable information on
> Native Amer-
> ican economic systems was unavailable in Scottish libraries. But by
> mid-century, Lewis Henry Morgan's descriptions of the Six Nations
> of the Iroquois, among others, were widely published — and they made
> clear that the main economic institution among the Iroquois nations
> were longhouses where most goods were stockpiled and then allocated
> by women's councils, and no one ever traded arrowheads for slabs of
> meat. Economists simply ignored this information. 15 Stanley Jevons,
> for example, who in 1871 wrote what has come to be considered the
> classic book on the origins of money, took his examples straight from
> Smith, with Indians swapping venison for elk and beaver hides, and
> made no use of actual descriptions of Indian life that made it
> clear that
> Smith had simply made this up. Around that same time, missionaries,
> adventurers, and colonial administrators were fanning out across the
> world, many bringing copies of Smith's book with them, expecting to
> find the land of barter. None ever did. They discovered an almost
> end-
> less variety of economic systems. But to this day, no one has been
> able
> to locate a part of the world where the ordinary mode of economic
> transaction between neighbors takes the form of "I'll give you twenty
> chickens for that cow."
>
> The definitive anthropological work on barter, by Caroline Hum-
> phrey, of Cambridge, could not be more definitive in its conclusions:
> "No example of a barter economy, pure and simple, has ever been
> described, let alone the emergence from it of money; all available
> eth-
> nography suggests that there never has been such a thing." 1 *
>
> Now, all this hardly means that barter does not exist — or even
> that it's never practiced by the sort of people that Smith would
> refer to
> as "savages." It just means that it's almost never employed, as Smith
> imagined, between fellow villagers. Ordinarily, it takes place
> between
> strangers, even enemies. Let us begin with the Nambikwara of Brazil.
> They would seem to fit all the criteria: they are a simple society
> with-
> out much in the way of division of labor, organized into small bands
> that traditionally numbered at best a hundred people each. Occasion-
> ally if one band spots the cooking fires of another in their
> vicinity, they
> will send emissaries to negotiate a meeting for purposes of trade.
> If the
> offer is accepted, they will first hide their women and children
> in the
> forest, then invite the men of other band to visit camp. Each band
> has
> a chief; once everyone has been assembled, each chief gives a formal
> speech praising the other party and belittling his own; everyone puts
>
>
>
> 30
>
>
>
> DEBT
>
>
>
> aside their weapons to sing and dance together — though the dance is
> one that mimics military confrontation. Then, individuals from each
> side approach each other to trade:
>
> If an individual wants an object he extols it by saying how fine
> it is. If a man values an object and wants much in exchange for
> it, instead of saying that it is very valuable he says that it is no
> good, thus showing his desire to keep it. "This axe is no good,
> it is very old, it is very dull," he will say, referring to his axe
> which the other wants.
>
> This argument is carried on in an angry tone of voice un-
> til a settlement is reached. When agreement has been reached
> each snatches the object out of the other's hand. If a man has
> bartered a necklace, instead of taking it off and handing it
> over, the other person must take it off with a show of force.
> Disputes, often leading to fights, occur when one party is a
> little premature and snatches the object before the other has
> finished arguing. 17
>
> The whole business concludes with a great feast at which the wom-
> en reappear, but this too can lead to problems, since amidst the
> music
> and good cheer, there is ample opportunity for seductions. 18 This
> some-
> times led to jealous quarrels. Occasionally, people would get killed.
>
> Barter, then, for all the festive elements, was carried out be-
> tween people who might otherwise be enemies and hovered about an
> inch away from outright warfare — and, if the ethnographer is to be
> believed — if one side later decided they had been taken advantage
> of, it
> could very easily lead to actual wars.
>
> To shift our spotlight halfway around the world to Western Arn-
> hem Land in Australia, where the Gunwinggu people are famous for
> entertaining neighbors in rituals of ceremonial barter called the
> dza-
> malag. Here the threat of actual violence seems much more distant.
> Partly, this is because things are made easier by the existence of
> a moi-
> ety system that embraces the whole region: no one is allowed to
> marry,
> or even have sex with, people of their own moiety, no matter where
> they come from, but anyone from the other is technically a potential
> match. Therefore, for a man, even in distant communities, half the
> women are strictly forbidden, half of them fair game. The region
> is also
> united by local specialization: each people has its own trade
> product to
> be bartered with the others.
>
> What follows is from a description of a dzamalag held in the 1940s,
> as observed by an anthropologist named Ronald Berndt.
>
>
>
> THE MYTH OF BARTER
>
>
>
> 31
>
>
>
> Once again, it begins as strangers, after some initial negotiations,
> are invited into the hosts' main camp. The visitors in this
> particular
> example were famous for their "much-prized serrated spears" — their
> hosts had access to good European cloth. The trading begins when
> the visiting party, which consisted of both men and women, enters
> the camp's dancing ground of "ring place," and three of them began
> to entertain their hosts with music. Two men start singing, a
> third ac-
> companies them on the didjeridu. Before long, women from the hosts'
> side come and attack the musicians:
>
> Men and women rise and begin to dance. The dzamalag opens
> when two Gunwinggu women of the opposite moiety to the
> singing men "give dzamalag" to the latter. They present each
> man with a piece of cloth, and hit or touch him, pulling him
> down on the ground, calling him a dzamalag husband, and
> joking with him in an erotic vein. Then another woman of the
> opposite moiety to the pipe player gives him cloth, hits and
> jokes with him.
>
> This sets in motion the dzamalag exchange. Men from the
> visiting group sit quietly while women of the opposite moiety
> come over and give them cloth, hit them, and invite them to
> copulate; they take any liberty they choose with the men, amid
> amusement and applause, while the singing and dancing con-
> tinue. Women try to undo the men's loin coverings or touch
> their penises, and to drag them from the "ring place" for co-
> itus. The men go with their dzamalag partners, with a show of
> reluctance, to copulate in the bushes away from the fires which
> light up the dancers. They may give the women tobacco or
> beads. When the women return, they give part of this tobacco
> to their own husbands, who have encouraged them to go dza-
> malag. The husbands, in turn, use the tobacco to pay their own
> female dzamalag partners . .
>
> New singers and musicians appear, are again assaulted and dragged
> off to the bushes; men encourage their wives "not to be shy," so
> as to
> maintain the Gunwinggu reputation for hospitality; eventually those
> men also take the initiative with the visitors' wives, offering
> cloth, hit-
> ting them, and leading them off into the bushes. Beads and tobacco
> circulate. Finally, once participants have all paired off at least
> once,
> and the guests are satisfied with the cloth they have acquired, the
> women stop dancing and stand in two rows and the visitors line up to
> repay them.
>
>
>
> 32
>
>
>
> DEBT
>
>
>
> Then visiting men of one moiety dance towards the women
> of the opposite moiety, in order to "give them dzamalag."
> They hold shovel-nosed spears poised, pretending to spear the
> women, but instead hit them with the flat of the blade. "We
> will not spear you, for we have already speared you with our
> penises." They present the spears to the women. Then visiting
> men of the other moiety go through the same actions with the
> women of their opposite moiety, giving them spears with ser-
> rated points. This terminates the ceremony, which is followed
> by a large distribution of food. 20
>
> This is a particularly dramatic case, but dramatic cases are reveal-
> ing. What the Gunwinggu hosts appear to have been able to do here,
> owing to the relatively amicable relations between neighboring
> peoples
> in Western Arnhem Land, is to take all the elements in Nambikwara
> barter (the music and dancing, the potential hostility, the sexual
> in-
> trigue), and turn it all into a kind of festive game — one not,
> perhaps,
> without its dangers, but (as the ethnographer emphasizes) considered
> enormous fun by everyone concerned.
>
> What all such cases of trade through barter have in common is that
> they are meetings with strangers who will, likely as not, never meet
> again, and with whom one certainly will not enter into any ongoing
> re-
> lations. This is why a direct one-on-one exchange is appropriate:
> each
> side makes their trade and walks away. It's all made possible by
> laying
> down an initial mantle of sociability, in the form of shared
> pleasures,
> music and dance — the usual base of conviviality on which trade must
> always be built. Then comes the actual trading, where both sides make
> a great display of the latent hostility that necessarily exists in
> any ex-
> change of material goods between strangers — where neither party has
> no particular reason not to take advantage of the other — by playful
> mock aggression, though in the Nambikwara case, where the mantle
> of sociability is extremely thin, mock aggression is in constant
> danger
> of slipping over into the real thing. The Gunwinggu, with their more
> relaxed attitude toward sexuality, have quite ingeniously managed to
> make the shared pleasures and aggression into exactly the same thing.
>
> Recall here the language of the economics textbooks: "Imagine a
> society without money." "Imagine a barter economy." One thing these
> examples make abundantly clear is just how limited the imaginative
> powers of most economists turn out to be. 21
>
> Why? The simplest answer would be: for there to even be a disci-
> pline called "economics," a discipline that concerns itself first
> and fore-
> most with how individuals seek the most advantageous arrangement
>
>
>
> THE MYTH OF BARTER
>
>
>
> 33
>
>
>
> for the exchange of shoes for potatoes, or cloth for spears, it must
> assume that the exchange of such goods need have nothing to do with
> war, passion, adventure, mystery, sex, or death. Economics assumes a
> division between different spheres of human behavior that, among peo-
> ple like the Gunwinngu and the Nambikwara, simply does not exist.
> These divisions in turn are made possible by very specific
> institutional
> arrangements: the existence of lawyers, prisons, and police, to
> ensure
> that even people who don't like each other very much, who have no
> interest in developing any kind of ongoing relationship, but are
> simply
> interested in getting their hands on as much of the others'
> possessions
> as possible, will nonetheless refrain from the most obvious expedient
> (theft). This in turn allows us to assume that life is neatly
> divided be-
> tween the marketplace, where we do our shopping, and the "sphere
> of consumption," where we concern ourselves with music, feasts, and
> seduction. In other words, the vision of the world that forms the
> basis
> of the economics textbooks, which Adam Smith played so large a part
> in promulgating, has by now become so much a part of our common
> sense that we find it hard to imagine any other possible arrangement.
>
> From these examples, it begins to be clear why there are no societ-
> ies based on barter. Such a society could only be one in which every-
> body was an inch away from everybody else's throat; but nonetheless
> hovering there, poised to strike but never actually striking,
> forever.
> True, barter does sometimes occur between people who do not consid-
> er each other strangers, but they're usually people who might as
> well be
> strangers — that is, who feel no sense of mutual responsibility or
> trust,
> or the desire to develop ongoing relations. The Pukhtun of Northern
> Pakistan, for instance, are famous for their open-handed hospitality.
> Barter is what you do with those to whom you are not bound by ties
> of hospitality (or kinship, or much of anything else):
>
> A favorite mode of exchange among men is barter, or adal-
> badal (give and take). Men are always on the alert for the
> possibility of bartering one of their possessions for something
> better. Often the exchange is like for like: a radio for a radio,
> sunglasses for sunglasses, a watch for a watch. However, un-
> like objects can also be exchanged, such as, in one instance, a
> bicycle for two donkeys. Adal-badal is always practiced with
> non-relatives and affords men a great deal of pleasure as they
> attempt to get the advantage over their exchange partner. A
> good exchange, in which a man feels he has gotten the better
> of the deal, is cause for bragging and pride. If the exchange is
> bad, the recipient tries to renege on the deal or, failing that, to
>
>
>
> 34
>
>
>
> DEBT
>
>
>
> palm off the faulty object on someone unsuspecting. The best
> partner in adal-badal is someone who is distant spatially and
> will therefore have little opportunity to complain. 22
>
> Neither are such unscrupulous motives limited to Central Asia.
> They seem inherent to the very nature of barter — which would explain
> the fact that in the century or two before Smith's time, the English
> words "truck and barter," like their equivalents in French, Spanish,
> German, Dutch, and Portuguese, literally meant "to trick, bamboozle,
> or rip off." 23 Swapping one thing directly for another while
> trying to
> get the best deal one can out of the transaction is, ordinarily, how
> one deals with people one doesn't care about and doesn't expect to
> see again. What reason is there not to try to take advantage of such
> a person? If, on the other hand, one cares enough about someone — a
> neighbor, a friend — to wish to deal with her fairly and honestly,
> one
> will inevitably also care about her enough to take her individual
> needs,
> desires, and situation into account. Even if you do swap one thing
> for
> another, you are likely to frame the matter as a gift.
>
>
>
> To illustrate what I mean by this, let's return to the economics
> text-
> books and the problem of the "double coincidence of wants." When
> we left Henry, he needed a pair of shoes, but all he had lying around
> were some potatoes. Joshua had an extra pair of shoes, but he didn't
> really need potatoes. Since money has not yet been invented, they
> have
> a problem. What are they to do?
>
> The first thing that should be clear by now is that we'd really have
> to know a bit more about Joshua and Henry. Who are they? Are they
> related? If so, how? They appear to live in a small community. Any
> two
> people who have been living their lives in the same small community
> will have some sort of complicated history with each other. Are they
> friends, rivals, allies, lovers, enemies, or several of these
> things at once?
>
> The authors of the original example seem to assume two neighbors
> of roughly equal status, not closely related, but on friendly
> terms — that
> is, as close to neutral equality as one can get. Even so, this
> doesn't say
> much. For example, if Henry was living in a Seneca longhouse, and
> needed shoes, Joshua would not even enter into it; he'd simply men-
> tion it to his wife, who'd bring up the matter with the other
> matrons,
> fetch materials from the longhouse's collective storehouse, and
> sew him
> some. Alternately, to find a scenario fit for an imaginary economics
>
>
>
> THE MYTH OF BARTER
>
>
>
> 35
>
>
>
> textbook, we might place Joshua and Henry together in a small, inti-
> mate community like a Nambikwara or Gunwinggu band.
>
> SCENARIO 1
>
> Henry walks up to Joshua and says "Nice shoes!"
>
> Joshua says, "Oh, they're not much, but since you seem to like
> them, by all means take them."
>
> Henry takes the shoes.
>
> Henry's potatoes are not at issue since both parties are perfectly
> well aware that if Joshua were ever short of potatoes, Henry would
> give him some.
>
> And that's about it. Of course it's not clear, in this case, how long
> Henry will actually get to keep the shoes. It probably depends on how
> nice they are. If they were just ordinary shoes, this might be the
> end of
> the matter. If they are in any way unique or beautiful, they might
> end
> up being passed around. There's a famous story that John and Lorna
> Marshall, who carried out a study of Kalahari Bushmen in the '60s,
> once gave a knife to one of their favorite informants. They left and
> came back a year later, only to discover that pretty much everyone in
> the band had been in possession of the knife at some point in
> between.
> On the other hand, several Arab friends confirm to me that in less
> strictly egalitarian contexts, there is an expedient. If a friend
> praises a
> bracelet or bag, you are normally expected to immediately say "take
> it" — but if you are really determined to hold on to it, you can
> always
> say, "yes, isn't it beautiful? It was a gift."
>
> But clearly, the authors of the textbook have a slightly more im-
> personal transaction in mind. The authors seem to imagine the two
> men as the heads of patriarchal households, on good terms with each
> other, but who keep their own supplies. Perhaps they live in one of
> those Scottish villages with the butcher and the baker in Adam
> Smith's
> examples, or a colonial settlement in New England. Except for some
> reason they've never heard of money. It's a peculiar fantasy, but
> let's
> see what we can do:
>
> SCENARIO 2
>
> Henry walks up to Joshua and says, "Nice shoes!"
>
> Or, perhaps — let's make this a bit more realistic — Henry's wife
> is chatting with Joshua's and strategically lets slip that the
> state of
> Henry's shoes is getting so bad he's complaining about corns.
>
>
>
> 36
>
>
>
> DEBT
>
>
>
> The message is conveyed, and Joshua comes by the next day to
> offer his extra pair to Henry as a present, insisting that this is
> just
> a neighborly gesture. He would certainly never want anything in
> return.
>
> It doesn't matter whether Joshua is sincere in saying this. By do-
> ing so, Joshua thereby registers a credit. Henry owes him one.
>
> How might Henry pay Joshua back? There are endless possi-
> bilities. Perhaps Joshua really does want potatoes. Henry waits a
> discrete interval and drops them off, insisting that this too is
> just a
> gift. Or Joshua doesn't need potatoes now but Henry waits until he
> does. Or maybe a year later, Joshua is planning a banquet, so he
> comes strolling by Henry's barnyard and says "Nice pig . . ."
>
> In any of these scenarios, the problem of "double coincidence of
> wants," so endlessly invoked in the economics textbooks, simply
> disap-
> pears. Henry might not have something Joshua wants right now. But
> if the two are neighbors, it's obviously only a matter of time before
> he will. 24
>
> This in turn means that the need to stockpile commonly acceptable
> items in the way that Smith suggested disappears as well. With it
> goes
> the need to develop currency. As with so many actual small communi-
> ties, everyone simply keeps track of who owes what to whom.
>
> There is just one major conceptual problem here — one the atten-
> tive reader might have noticed. Henry "owes Joshua one." One what?
> How do you quantify a favor? On what basis do you say that this
> many potatoes, or this big a pig, seems more or less equivalent to a
> pair of shoes? Because even if these things remain rough-and-ready
> ap-
> proximations, there must be some way to establish that X is roughly
> equivalent to Y, or slightly worse or slightly better. Doesn't
> this imply
> that something like money, at least in the sense of a unit of
> accounts
> by which one can compare the value of different objects, already has
> to exist?
>
> In most gift economies, there actually is a rough-and-ready way
> to solve the problem. One establishes a series of ranked
> categories of
> types of thing. Pigs and shoes may be considered objects of roughly
> equivalent status, one can give one in return for the other; coral
> neck-
> laces are quite another matter, one would have to give back another
> necklace, or at least another piece of jewelry — anthropologists
> are used
> to referring to these as creating different "spheres of exchange."
> 25 This
> does simplify things somewhat. When cross-cultural barter becomes a
> regular and unexceptional thing, it tends to operate according to
> simi-
> lar principles: there are only certain things traded for certain
> others
>
>
>
> THE MYTH OF BARTER
>
>
>
> 37
>
>
>
> (cloth for spears, for example), which makes it easy to work out tra-
> ditional equivalences. However, this doesn't help us at all with the
> problem of the origin of money. Actually, it makes it infinitely
> worse.
> Why stockpile salt or gold or fish if they can only be exchanged for
> some things and not others?
>
> In fact, there is good reason to believe that barter is not a par-
> ticularly ancient phenomenon at all, but has only really become wide-
> spread in modern times. Certainly in most of the cases we know about,
> it takes place between people who are familiar with the use of money,
> but for one reason or another, don't have a lot of it around.
> Elaborate
> barter systems often crop up in the wake of the collapse of national
> economies: most recently in Russia in the '90s, and in Argentina
> around
> 2002, when rubles in the first case, and dollars in the second,
> effectively
> disappeared. 26 Occasionally one can even find some kind of currency
> beginning to develop: for instance, in POW camps and many prisons,
> inmates have indeed been known to use cigarettes as a kind of cur-
> rency, much to the delight and excitement of professional
> economists. 27
> But here too we are talking about people who grew up using money
> and now have to make do without it — exactly the situation "imagined"
> by the economics textbooks with which I began.
>
> The more frequent solution is to adopt some sort of credit system.
> When much of Europe "reverted to barter" after the collapse of the
> Roman Empire, and then again after the Carolingian Empire likewise
> fell apart, this seems to be what happened. People continued keeping
> accounts in the old imperial currency, even if they were no longer
> us-
> ing coins. 28 Similarly, the Pukhtun men who like to swap bicycles
> for
> donkeys are hardly unfamiliar with the use of money. Money has ex-
> isted in that part of the world for thousands of years. They just
> prefer
> direct exchange between equals — in this case, because they
> consider it
> more manly. 29
>
> The most remarkable thing is that even in Adam Smith's examples
> of fish and nails and tobacco being used as money, the same sort of
> thing was happening. In the years following the appearance of The
> Wealth of Nations, scholars checked into most of those examples and
> discovered that in just about every case, the people involved were
> quite
> familiar with the use of money, and in fact, were using money — as a
> unit of account. 30 Take the example of dried cod, supposedly used as
> money in Newfoundland. As the British diplomat A. Mitchell-Innes
> pointed out almost a century ago, what Smith describes was really an
> illusion, created by a simple credit arrangement:
>
>
>
> 38
>
>
>
> DEBT
>
>
>
> In the early days of the Newfoundland fishing industry, there
> was no permanent European population; the fishers went there
> for the fishing season only, and those who were not fishers
> were traders who bought the dried fish and sold to the fishers
> their daily supplies. The latter sold their catch to the traders at
> the market price in pounds, shillings and pence, and obtained
> in return a credit on their books, with which they paid for their
> supplies. Balances due by the traders were paid for by drafts on
> England or France. 31
>
> It was quite the same in the Scottish village. It's not as if anyone
> actually walked into the local pub, plunked down a roofing nail, and
> asked for a pint of beer. Employers in Smith's day often lacked coin
> to pay their workers; wages could be delayed by a year or more; in
> the meantime, it was considered acceptable for employees to carry off
> either some of their own products or leftover work materials, lumber,
> fabric, cord, and so on. The nails were de facto interest on what
> their
> employers owed them. So they went to the pub, ran up a tab, and when
> occasion permitted, brought in a bag of nails to charge off
> against the
> debt. The law making tobacco legal tender in Virginia seems to have
> been an attempt by planters to oblige local merchants to accept their
> products as a credit around harvest time. In effect, the law
> forced all
> merchants in Virginia to become middlemen in the tobacco business,
> whether they liked it or not; just as all West Indian merchants were
> obliged to become sugar dealers, since that's what all their
> wealthier
> customers brought in to write off against their debt.
>
> The primary examples, then, were ones in which people were
> improvising credit systems, because actual money — gold and silver
> coinage — was in short supply. But the most shocking blow to the con-
> ventional version of economic history came with the translation,
> first of
> Egyptian hieroglyphics, and then of Mesopotamian cuneiform, which
> pushed back scholars' knowledge of written history almost three mil-
> lennia, from the time of Homer (circa 800 bc), where it had
> hovered in
> Smith's time, to roughly 3500 bc. What these texts revealed was that
> credit systems of exactly this sort actually preceded the
> invention of
> coinage by thousands of years.
>
> The Mesopotamian system is the best-documented, more so than
> that of Pharaonic Egypt (which appears similar), Shang China (about
> which we know little), or the Indus Valley civilization (about which
> we know nothing at all). As it happens, we know a great deal about
> Mesopotamia, since the vast majority of cuneiform documents were
> financial in nature.
>
>
>
> THE MYTH OF BARTER
>
>
>
> 39
>
>
>
> The Sumerian economy was dominated by vast temple and palace
> complexes. These were often staffed by thousands: priests and
> officials,
> craftspeople who worked in their industrial workshops, farmers and
> shepherds who worked their considerable estates. Even though ancient
> Sumer was usually divided into a large number of independent city-
> states, by the time the curtain goes up on Mesopotamian civilization
> around 3500, temple administrators already appear to have developed
> a single, uniform system of accountancy — one that is in some ways
> still with us, actually, because it's to the Sumerians that we owe
> such
> things as the dozen or the 24-hour day. 32 The basic monetary unit
> was
> the silver shekel. One shekel's weight in silver was established
> as the
> equivalent of one gur, or bushel of barley. A shekel was subdivided
> into 60 minas, corresponding to one portion of barley — on the prin-
> ciple that there were 30 days in a month, and Temple workers received
> two rations of barley every day. It's easy to see that "money" in
> this
> sense is in no way the product of commercial transactions. It was ac-
> tually created by bureaucrats in order to keep track of resources and
> move things back and forth between departments.
>
> Temple bureaucrats used the system to calculate debts (rents, fees,
> loans . . .) in silver. Silver was, effectively, money. And it did
> indeed
> circulate in the form of unworked chunks, "rude bars" as Smith had
> put it. 33 In this he was right. But it was almost the only part
> of his ac-
> count that was right. One reason was that silver did not circulate
> very
> much. Most of it just sat around in Temple and Palace treasuries,
> some
> of which remained, carefully guarded, in the same place for literally
> thousands of years. It would have been easy enough to standardize the
> ingots, stamp them, create some authoritative system to guarantee
> their
> purity. The technology existed. Yet no one saw any particular need to
> do so. One reason was that while debts were calculated in silver,
> they
> did not have to be paid in silver — in fact, they could be paid in
> more
> or less anything one had around. Peasants who owed money to the
> Temple or Palace, or to some Temple or Palace official, seem to have
> settled their debts mostly in barley, which is why fixing the
> ratio of sil-
> ver to barley was so important. But it was perfectly acceptable to
> show
> up with goats, or furniture, or lapis lazuli. Temples and Palaces
> were
> huge industrial operations — they could find a use for almost
> anything. 34
>
> In the marketplaces that cropped up in Mesopotamian cities, pric-
> es were also calculated in silver, and the prices of commodities that
> weren't entirely controlled by the Temples and Palaces would tend to
> fluctuate according to supply and demand. But even here, such
> evidence
> as we have suggests that most transactions were based on credit. Mer-
> chants (who sometimes worked for the Temples, sometimes operated
>
>
>
> 40
>
>
>
> DEBT
>
>
>
> independently) were among the few people who did, often, actually use
> silver in transactions; but even they mostly did much of their
> dealings
> on credit, and ordinary people buying beer from "ale women," or lo-
> cal innkeepers, once again, did so by running up a tab, to be
> settled at
> harvest time in barley or anything they might have had at hand. 35
>
> At this point, just about every aspect of the conventional story of
> the origins of money lay in rubble. Rarely has an historical
> theory been
> so absolutely and systematically refuted. By the early decades of the
> twentieth century, all the pieces were in place to completely rewrite
> the history of money. The groundwork was laid by Mitchell-Innes —
> the same one I've already cited on the matter of the cod — in two
> essays
> that appeared in New York's Banking Law Journal in 1913 and 1914.
> In these, Mitchell-Innes matter-of-factly laid out the false
> assumptions
> on which existing economic history was based and suggested that what
> was really needed was a history of debt:
>
> One of the popular fallacies in connection with commerce is
> that in modern days a money-saving device has been intro-
> duced called credit and that, before this device was known,
> all, purchases were paid for in cash, in other words in coins. A
> careful investigation shows that the precise reverse is true. In
> olden days coins played a far smaller part in commerce than
> they do to-day. Indeed so small was the quantity of coins, that
> they did not even suffice for the needs of the [Medieval Eng-
> lish] Royal household and estates which regularly used tokens
> of various kinds for the purpose of making small payments. So
> unimportant indeed was the coinage that sometimes Kings did
> not hesitate to call it all in for re-minting and re-issue and still
> commerce went on just the same. 36
>
> In fact, our standard account of monetary history is precisely
> backwards. We did not begin with barter, discover money, and then
> eventually develop credit systems. It happened precisely the other
> way
> around. What we now call virtual money came first. Coins came much
> later, and their use spread only unevenly, never completely replacing
> credit systems. Barter, in turn, appears to be largely a kind of
> acciden-
> tal byproduct of the use of coinage or paper money: historically,
> it has
> mainly been what people who are used to cash transactions do when
> for one reason or another they have no access to currency.
>
> The curious thing is that it never happened. This new history was
> never written. It's not that any economist has ever refuted
> Mitchell-Innes.
> They just ignored him. Textbooks did not change their story — even if
>
>
>
> THE MYTH OF BARTER
>
>
>
> 41
>
>
>
> all the evidence made clear that the story was simply wrong. People
> still write histories of money that are actually histories of
> coinage, on
> the assumption that in the past, these were necessarily the same
> thing;
> periods when coinage largely vanished are still described as times
> when
> the economy "reverted to barter," as if the meaning of this phrase is
> self-evident, even though no one actually knows what it means. As a
> result we have next-to-no idea how, say, the inhabitant of a Dutch
> town in 950 ad actually went about acquiring cheese or spoons or hir-
> ing musicians to play at his daughter's wedding — let alone how
> any of
> this was likely to be arranged in Pemba or Samarkand.'
>
>
>
>
> On Sat, Aug 5, 2017 at 10:53 PM, Razer <g2s at riseup.net
> <mailto:g2s at riseup.net>> wrote:
>
> Hackermoon...
>
>> 13.7 billion years ago, the Big Bang brought the universe into
>> existence. 3.8 billion years ago, life first appeared on our
>> planet. 1.9 million years ago, Earth witnessed a hominid species,
>> Home erectus, walking upright for the first time.
>>
>> And, 7,000 years ago, money was invented.
>>
>> But first, people bartered.
>>
>> Not everyone had everything. We always had something in surplus,
>> and we always needed something that the other person had. As the
>> common sense would have said, we started exchanging our surplus
>> assets for what we needed.
>>
>> Imagine I had extra apples and you had extra oranges, we could
>> simply exchange fruits with one another.
>>
>> What if I had a surplus of apples, and didn’t want your oranges,
>> but I’d love to have some strawberries.
>>
>> You would go and find someone who can give you strawberries in
>> exchange for your oranges. Luckily you find your friend, Joe, to
>> barter with you.
>>
>> Then, you’d bring me those strawberries, and I’d give you some
>> apples.
>>
>> Joe, you and I are all happy.
>>
>
> (Did I mention the lovely illustrations?)
>
>> But what if Joe had a surplus of bananas, but he didn’t want your
>> oranges either? That would be a problem.
>>
>> The smart among us started asking a profound question, “Can there
>> be something that everyone wants?”
>>
>> Then, there was commodity money.
>>
>> There were a few things that almost everyone used, like salt,
>> seeds, sheep, and cows. They became the commodity money. If we
>> had any of these, we could use them to get whatever we wanted....
>
>
> In full at hACKERMOON:
> https://hackernoon.com/wtf-is-money-2a5d78072128
> <https://hackernoon.com/wtf-is-money-2a5d78072128>
>
>
>
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