Hi,
The only author I have read who counters the argument that people were bartering before the advent of money (as economics textbooks have it) is David Graeber in Debt: The First 5000 Years. Do mainstream economists support this argument? If not why not? I look forward to your feedback.
It depends greatly upon what you think money is.
But it seems very strange thing to imagine that the advent a fungible exchange instrument came about before the idea of direct exchange of goods.
Og has come fruit. Sog has some meat. Og wants some meat, Sog wants some fruit. Sadly neither had thought of using clam shells as a unit of exchange, and so they are unable transact business.
Well, the claim is that Og would then tell Sog that he can hand over some fruit now, but Sog owes Og some fruit… Sog may loan Og some meat, but even if he doesn’t Sog can still get fruit on tab.
So you see, when Sog owes Og some fruit, perhaps they had some way to record it, basically then that is an IOU… and what is money ? The I is the government, and the U is the bearer.
It also depends on what you think barter is. I think that Og and Sog would probably pool their resources and make a stew. They would probably share it with anyone around too. The tradition of hospitality is very old indeed. Even if Og was really good at making bows, he would probably just give them to his family/tribe for the common good. If he was well respected he might get first dibs with the women.
Barter may well have happened to some extent between different families/tribes where there is no common good. If Og’s tribe had something that Sog’s family wanted, they could go to war over it, and probably did. War meant the loss of good hunters so might be best avoided, especially if they were evenly matched; so they could well have come to some system of exchange.
But there is the claim that there was no barter before money. Barter is a construct for avoiding tax … or for creating a new currency…
The claim is that before money, Og would then tell Sog that he can hand over some fruit now, but Sog owes Og some fruit… Sog may loan Og some meat, but even if he doesn’t Sog can still get fruit on tab.
The thing is that until civilisation, there is no reason to be precise about anything, if Sog owes you lots of fruit, then you must have been feeling sorry for Sog, so really you should be charitable…
And then with civilisation, you had people who didn’t work on a farm , and people who couldn’t afford to be charitable… they needed their IOU’s in order to be able to eat in six months time… They got their IOU’s, perhaps by asking govenrment to store food, rather than giving them a years supply of food now, and them wondering what they can do with it…
Basically, no one really said "Well, your 3 oranges will cost me four and a half apples, look I have five apples,can I get 4 oranges for five apples ? "… No one needed to do that in a formal process, not until civilisation.
Maybe it also depends on what you think bartering is. very young children understand ‘swapsies’ and basic negotiation.
If you have a complex barter economy, with deferred exchanges, records of debt and ways of assessing the trustworthiness of participants, your basically using a kind of ‘imaginary’ money, even if there’s no physical currency exchanged. Most money today isn’t physical, it’s just numbers on a computer.
I don’t think there’s a sharp line between record keeping and money, but by any usual definitions, I find it hard to imagine that the latter preceded the former.
(dammit, double ninja’d)
It would seem like perhaps indebtedness (or buying on credit), and working for goods was also a early function of exchange. So a function of owning a debt would seem to proceed a standard of exchange, so it falls back to the agreed upon standard of the 2 parties. After a while a tribal or inter-tribal standard may develop.
[ul]
[li]Before we can apply the tools of anthropology to reconstruct the real history of money, we need to understand what’s wrong with the conventional account.[/li][LIST]
[li]Chapter Two, “The Myth of Barter”, p. 22[/li][/ul]
[/LIST]
[ul]
[li]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.[/li][LIST]
[li]Chapter Two, “The Myth of Barter”, p. 40[/li][/ul]
[/LIST]
[ul]
[li] The reason that economic textbooks now begin with imaginary villages is because it has been impossible to talk about real ones. Even some economists have been forced to admit that Smith’s Land of Barter doesn’t really exist.[/li] The question is why the myth is perpetuated anyway.
[LIST]
[li]Chapter Three, “Primordial Debts”, p. 43[/li][/ul]
[/LIST]
Thanks Okay, so I read a couple of summaries of the chapter in question and I think I get the point.
Barter is used to mean direct exchange of goods only.
Within the tribe, there was basically no need for barter. When everyone is dealing with the same few individuals all their lives, it’s less antagonistic to simply give everyone what they need. No luck on the hunt today? Don’t worry, I’ve gathered lots of berries to share. Berry crop eaten by birds? Relax, I caught a gazelle.
When dealing with other tribes, a fairly complex system of trading debts was used. Graeber suggests that the ‘anthropological evidence’ is that bartering was never an intermediate stage and only ever exists on the fringes.
I can accept the basic idea, that barter economies did not arise and then later develop into credit economies. I still think that barter probably came first though.
On meeting a new tribe, who speak a different dialect, if not language and who have different customs and practices, I find it hard to accept that the easiest and most intuitive way of starting trade would be a straight swap.
“Hey, that’s a lot of berries you guys have gathered. We’re all out of berries, but we’ve got a butt-load of gazelle steaks. Just putting it out there.”
You can get the whole jobbie here
How’s that for a sharing economy ?!
We can chart the evolution of money (and writing) from the archaeological record. At first, people created little clay tokens to keep track of debts. You have three little clay sheep to prove that I owe you three real sheep.
Then they started putting the tokens in hollow clay balls. This is like a contract. If I put my mark on the ball, I can’t lie and say that you just made the tokens yourself.
But if the tokens are inside the ball you can’t see them without breaking it. So you make marks on the outside of the ball to show what’s inside. At first you make a “sheep mark” for each sheep token. But eventually you realize that it’s simpler to make one “sheep mark” and then make hash marks next to it for the count.
These commodity signs and counts are the beginning of writing and numbers. The final step is to realize that you don’t actually need the tokens at all. You can just write your accounts on clay tablets.
http://en.finaly.org/index.php/Two_precursors_of_writing:_plain_and_complex_tokens
It’s hard to see how Graeber could argue that an abstract notion of “I owe you three units of something” preceded bartering of goods when the earliest record we have of transactions involves barter, and those transactions occurred before writing or numbers had been invented.
What about money that didn’t survive in the archaeological record, maybe due to the construction material ?
Not to forget that there are still many stone age societies around the world to observe.
Well, is it a matter of guesswork or field research and a trip to google scholar ?
Exactly. Money’s just standardized, formalized barter. Rather than having our employers pay us in stuff like land, slaves, silver, gold, grain, salt, and livestock, we get money. And rather than having to pay for other stuff in the same goods, we pay money.
I imagine that it went from some kind of tokens to some kind of precious metal coinage pretty fast- standardized weights of metals that are widely accepted to be valuable means that you could then evaluate relative worth much easier- a goat might be worth 2 silver stags, but a tankard of ale might only be worth 2 copper pennies.
DG says
Well there you go OP, tried to get you something grounded in research.
What form did this money take? As I said, we have records of barter transactions that not only precede written language and written numbers, they are precursors to both.
Well, since we’re talking about interpersonal dealings which took place tens of thousands of years ago, guesswork is probably about the best we can do. It may be true that modern inter-tribal trade is never based around barter, but I don’t accept that as evidence that people thought up the concept of debt before they thought up the concept of swapping.
I’m reading the book at the moment. I suspect that the contention is that a barter economy did not develop first. That’s not the same as saying ‘there was no bartering until after there was money’.
Maybe I’m completely wrong though. Only read a few pages and it’s already fascinating.
Well, for what I think of as ancient barter systems, I find it hard to believe that there’d be any archaeological evidence for it at all, which makes it non-falsifiable and non-verifiable. 
Unless we have any ancient diaries lying around.
The advantage of a “straight swap/trade” barter is that there’s no need for record keeping. I give you something, I get something back, that’s the whole deal.
I guess my Intuitions on this are not to be trusted. A straight swap seems like a simpler transaction to communicate, but maybe that’s a product of my cultural background.
If you are used to simply sharing your resources with other members of the tribe, then suddenly you meet people who you don’t trust to reciprocate, it might well be more of a natural extension of your current practice to simply give them what they need and make a mental note to see if they do the same for you in future. These mental notes, which inform your perception of that tribe’s trustworthiness, could fairly seamlessly transition into a physical record of debt. Particularly if you have multiple such arrangements to keep track of with different tribes/individuals.