From Barter to Blockchains - WTF is… Money?

[juan]

On Sun, 6 Aug 2017 15:15:39 +0700
Jason McVetta <jason.mcvetta at gmail.com> quoted graeber:


> 
> 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.

	I lend you a hammer. You owe me a hammer. No 'money' required
	to 'quantify' anything. 

	As  expected, graeber is a babbling retard. 


> 
> Not only is it money that makes debt possible: 

	...in the view of a  charlatan like graeber who doesn't
	seem to know the basic meanings of basic words in his own
	fucking language. 

	http://www.dictionary.com/browse/debt?s=t

	"a liability or obligation to pay or render something: " 

	SOMETHING - meaning, ANY SORT OF GOOD or THING, not just
	'money'.



> 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. 

	grain and silver were indeed money. 'Debt' isn't money, no
	matter how many times a charlatan like graeber repeats it.


> 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 

	no it isn't.


>— 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;

	right.

> credit only develops later. 

	wrong. 'credit' only requires that A lends something to B. It
	has nothing to do with money per se. But oh, wait...


> 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
> 
> 
> 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, 

	lolwut?


> since it's almost
> impossible to pretend that those lending and borrowing money are
> acting on purely "economic" motivations 

	lolwut???
	

> (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 


	How does he know? The guy never read an article about
	economics, let alone a whole book.


> 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. 


	right - so this is the first fact that graeber managed to QUOTE
	- the rest of the stuff he writes is just made up nonsense. 



> 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

> 
> 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.
	

	it's hard to disprove cause it is a basic fact. 



> 
> 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


	right, that's the ABC of exchange. And it doesn't prove at all
	that 'barter is a myth'. Only that DIRECT BARTER is impractical
	in some circunstances, so you use INDIRECT BARTER. 

	And here's the shocking news. Indirect BARTER using 'money' is
	still BARTER.


> 
> 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."


	Oh, if I tell you "imagine you have two apples" that means
	apples don't exist. They are 'imaginary'. 


	OK, this is enough. I can't keep reading this piece of highly
	stupid propaganda. I've read enough anti economics bullshit
	from both left and right in the past. This isn't funny anymore. 





> "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> 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
> >
> >
> >