General

Re: An odd claim

EmperorNero — Thu, 27 Jan 2011 14:36:52 GMT

I think he is saying that before coinage people would "pay" with a promise of reciprocation. That essentially is credit. From the article: "[L]ocal innkeepers, served beer, for example, and often rented rooms; customers ran up a tab; normally, the full sum was dispatched at harvest time." The problem with that is it would only work with those you knew and trusted. Thus virtual credit was not a generally accepted form of payment. It wouldn't really be money.

It makes sense. Even hunter-gatherers would probably use promises of reciprocation as payment, long before coinage came along. But that does not contradict the Austrian explanation of how money originated. It just adds something. There is direct barter and then there is credit barter, just as there is commodity money and credit commodity money.

He is wrong in his point that commodity money is linked to violence. Or rather he mistakes a symptom for the cause. In times of peace systems of credit would emerge, because that required stability. And in times of war such systems would break down and people would revert to commodity money.

Re: An odd claim

Caley McKibbin — Thu, 27 Jan 2011 12:38:09 GMT

A credit exchange is either monetary or barter. So... another one for the birds.

Re: An odd claim

Laotzu del Zinn — Thu, 27 Jan 2011 08:19:02 GMT

I think it's saying credit is older than barter.... tho where he could get proof for that is beyond me. Sounds like he thought it out, didn't really bother with empirical evidence, and because it made sense, it must be true. It really bothers me when "theorists" do that....

Re: An odd claim

filc — Mon, 24 Jan 2011 04:16:59 GMT

money predated barter

I am missing the logic here.

Re: An odd claim

Smiling Dave — Mon, 24 Jan 2011 04:06:25 GMT

On the contrary, debasement of the currency is the accesory of war, not of peaceful trade. Revolutionary War, paper money introduced. Civil War, the same. WW1, the same. Those are the examples I know about.

Also, was that "virtual money" not redeemable in gold on demand? Hard to believe.

An odd claim

Jeremiah Dyke — Mon, 24 Jan 2011 02:53:13 GMT

The author makes a weird claim in a lecture via i-tunes that money predated barter. This runs contradictor to Mises Theory of Money in which solves the paradox of how money orignated. I have not shifted through this article but the lecture quotes this article as proof

Towards a history of virtual money

http://blog.longnow.org/2010/04/22/debt-the-first-five-thousand-years/#

Here I can return to my original point: that money did not originally appear in this cold, metal, impersonal form. It originally appears in the form of a measure, an abstraction, but also as a relation (of debt and obligation) between human beings. It is important to note that historically it is commodity money that has always been most directly linked to violence. As one historian put it, “bullion is the accessory of war, and not of peaceful trade.”^[1]

The reason is simple. Commodity money, particularly in the form of gold and silver, is distinguished from credit money most of all by one spectacular feature: it can be stolen. Since an ingot of gold or silver is an object without a pedigree, throughout much of history bullion has served the same role as the contemporary drug dealer’s suitcase full of dollar bills, as an object without a history that will be accepted in exchange for other valuables just about anywhere, with no questions asked. As a result, one can see the last 5 000 years of human history as the history of a kind of alternation. Credit systems seem to arise, and to become dominant, in periods of relative social peace, across networks of trust, whether created by states or, in most periods, transnational institutions, whilst precious metals replace them in periods characterised by widespread plunder. Predatory lending systems certainly exist at every period, but they seem to have had the most damaging effects in periods when money was most easily convertible into cash.

So as a starting point to any attempt to discern the great rhythms that define the current historical moment, let me propose the following breakdown of Eurasian history according to the alternation between periods of virtual and metal money: