Where money came from

“The economists tell us a neat story about the development of money. The primitive world, they tell us, begins in barter, develops in money, and matures in credit systems. The problem however, is that the historians and the anthropologists have been telling the economists, and telling them for over 100 years, that they can find no record of this development; in fact, the actual history seems to be just the opposite: first comes credit, then money, and finally barter systems. Widespread barter systems only come about after the collapse of monetary systems, and even then money is still used as a unit of account, as a way of equating dissimilar items.” — Friends and Strangers: A Meditation on Money, by John Médaille

Hmm… Well, the author has examples from Mesopotamia through the Rome and medieval Europe, and on to contemporary Greece. And gosh, I wish I’d written that.

But of course what people want to know is not so much where money came from as where all the money went. I think it has something to do with the obelisk shortage.

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4 thoughts on “Where money came from

  1. How on earth would one find evidence of a pre-finances barter system? Well, besides in the form of finding stuff that could’ve only been made in place A in a bunch of other places, but that could be raiding.

    I agree that “credit” would be rather old, but his description of a “village” sounds like hooey. A tribe, might work, any group where there’s some sort of central power to bring the smack down on those who take too much more than they give– that would indeed be a sort of “credit” system.

    I don’t know if most of his examples are well researched or not, since they’re issued in thumbnail-story-claim format, but I know his notion of farmers is kinda crazy– he seems to have transplanted the more modern sort of farmer where you only do one crop that harvests once a year back to the beginning of agriculture, and you don’t do anything with the crops once you harvest them! Even these days it’s not like that… a realistic ancient farm might be a bit more like his “gift economy” model, but only if you insist on forcing “economy” on to the system. It’s just a family farm, which if I remember correctly would be multiple generations in one area towards the goal of survival. You don’t get the sort of barter system that he’s “debunking”– the fisherman looks for a tailor that wants fish”– until you get specialization. The fisherman’s wife, or uncle, or grandfather, or great grand mother makes his shoes, and if they want something really impressive that can only be gotten outside of the family, then you start looking for someone that wants what you’ve got.

    More likely, you’ve got your extended family– AKA, tribe or clan– doing everything that you need, with more bodies thrown at this or that problem as they come up.
    That, I’ve seen– this: In village life, “honor” is the coin of the realm, and the economic system aims at circulating goods in such a way as to bind the members of the village together in a long chain of mutual obligations.— I have not seen, although if you squint it might be the way someone who is only able to think in terms of economic theory would describe a large family enterprise. Village, not so much, although small town life does still involve a lot of horse trading on favors.

    • If I remember, economics comes from the Greek word for household management. I think 5,000 years ago there were a pretty limited number of ways an extended family/clan/tribe could work, depending on the environment. Deviate, and everyone starves. When a surplus became available, they did some things that look pretty odd – giant stone disks, pyramids, human sacrifice, etc. Of course they also made jewelery and art.

      I think he gives too little attention to the family/clan/tribe. But, I have no idea what was the economic foundation of the earliest Mesopotamian cities. I’d be skeptical about any theory, but willing to entertain an idea and see what comes of it, which is were I am on the theory of distributism. On the other hand, as technology advances there might be things we could do with custom/micro manufacturing and barter.

      • It’s cool to look at, and I want to be sympathetic because GKC was big on Distributionism, but this sounds like my (30-something, just out of college, all city raised) cousin when he’s telling my (50+ years ranching, multiple degrees, manager for 20-ish years, go-to people for new farmers and ranchers in our area) parents what animal husbandry is really like.

        I somehow can’t see GKC forgetting love, even when he was working on economics.

        • Random thought: it reminds me of a post that Darwin Catholic did a while back, on theories of how dogs were tamed.

          They were arguing against the theory of adult dogs being tamed and for the theory that adult dogs just hung out around humans and eventually joined the family. (gross simplification)
          Nobody had considered that dumb kinds since way-back have picked up baby animals, or that dumb guys will go to great lengths to find something cute to impress girls, or that a woman out gathering that found an orphaned wolf pup might take it home. If something is greatly feared? Darth Vader syndrome seems to be a basic human reaction– no ally is so valued as that which scared the pants off of you.

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