It's like they're laying down premises for an argument rather than making claims about actual humans.
That entire section seemed to be Graeber saying "Economists have been promoting a myth for the last two centuries, but here I graciously point out their error so that they may be corrected and learn the truth." It never seems to occur to him that he might be tilting at a straw man.
I'm quite happy to agree that Smith got it wrong, but the modern examples Graeber cites don't support his claims. If you read them more carefully, what they are saying is "IF we were to live in a barter world then it would be very inefficient, hence money". They don't say that Barter World ever existed; its just a thought experiment.
The Transition From Barter to Fiat Money, Saint Louis Fed WORKING PAPER SERIES, 1994: https://files.stlouisfed.org/files/htdocs/wp/1994/94-004.pdf
This idea is widely accepted to be wrong today, but as you can see it wasn't the case not so long ago.
But this does not imply that there was a widespread "barter system" as the primary means of trade and cooperation, which was then replaced by a superior "money system". Instead, there would have been systems of credit, where you give me chickens now and I give you apples in six months. No money changes hands, but it's possible to keep track of who deserves to have some apples, and complex social institutions can be constructed on this basis, that would never be possible if society relied entirely on a "barter system". The "money system" is not an alternative to a "barter system" but is an alternative to a "credit system". Societies have gone back and forth between them many times throughout history - arguably we switched from a money system to a credit system when we abandoned the gold standard, and Bitcoin advocates want us to switch back again.
It also denies the existence of any systems where “money” is simply just the “most convenient commodity to barter with”. If everyone has these handy similarly sized hunks of gold and trade them cause it’s more convenient than carrying a chicken, that doesn’t mean “your using money”. If I’m happy not having gold and can simultaneously function in the “local economy” entirely with my chickens, I may use “gold”/“money” purely as a temporary item of escrow. I give gold to a shepherd to deliver sheep to my barn but he gives back the gold and takes some of my chickens when he leaves after the delivery… basically the “obviously money replaced barter cause it’s better” is a bullshit story that no one seems to give a shit trying to find evidence and I’m kind of sick of it.
/rant over
So where are the serious historical, evidence based research economists to be found? Id love a well researched history that had some evidence of past social behaviour with respect to barter/money.
The Aztecs had a complex system involving cacao seeds, strips of cloth, and "hoe money" for larger values. But while all three of these were used as a unit of account, they were also consumed directly as commodities.
Prior to the technological migration of metal coinage, ancient East Asia used shell money. These were almost exclusively used as a medium of exchange, and were not directly consumed as a commodity.
Standardized metal coinage was almost certainly invented only once by the ancient Mediterranean culture. Part of why the story "money replaces barter" is told is because this invention disrupts and rapidly replaces every other system that it touches for the next several hundred years, until the entire Old World is using metal coinage of some sort.
See also cigarettes in prisons (more recently ramen).
That is called "barter".
Unless all the transfers/debts/values are being tracked in terms of apple's, then apples are fulfilling at least one aspect of money: unit of account.
From the Wikiepdia page on "Barter"[1]:
> In trade, barter (derived from baretor) is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Economists distinguish barter from gift economies in many ways; barter, for example, features immediate reciprocal exchange, not one delayed in time.
The "immediate reciprocal exchange" criterion means that exchanging chickens now for apples later is not barter. When we talk about money replacing barter, we are talking specifically about the ability to immediately exchange physical tokens for goods or services. This refers very specifically to money as the medium of exchange, not as the medium of account.
In the traditional story, money was needed because Farmer A wants to exchange chickens for apples with Farmer B, but Farmer B doesn't have any apples right now. Money is useful because they can exchange that instead. But this story loses a lot of its force when you understand that they could have simply exchanged credit, without any need for money at all. The systemic change is not barter -> money, but credit -> money, which has very different implications for how society is organised. And, as I mentioned, we can see transitions from credit -> money and back again occur many times in history, whereas we see barter occur only in extremely rare circumstances.
I was not aware of the "immediate" condition for barter.
Reading from your link, there seems to be a gap in terminology for a situation separate from bartering, gift giving, and money based exchanges. Specifically, delayed exchanges where an account is informally kept but based on what was taken, not any unit/money.
The wikipedia entry for "Gift economy" rules out "explicit agreement for immediate or future rewards". [1]
So what to call the situation implied by "delayed barter", or "gifting with explicitly expected reciprocity"?
That situation can still happen without money. (Not claiming it was the basis for any particular economy, as it wouldn't scale well past trusted or enforcable relationships.)
- "I generally do the dishes and trust that you are keeping on top of sorting our mail"
- "I've got this round of beers. You'll probably get the next one but nobody's counting"
- "Sure, I'll help you move flats"
I assume no, but I'm not understanding what are you actually arguing for then?
What the book ‘Debt’ discusses is that credit based systems were the norm, not bartering.
In fact, iirc even bats have been shown to keep track of who shares food with them, and to share excess food with a less lucky partner, provided that partner continues to reciprocate.
It's unlikely that people were battering one day and then suddenly had this great idea of transitioning to a system of using money. Battering > battering with some credit > formalised money system seems like a logical series of steps to me. And of course there would be many more small steps between those. I would expect the number of transactions using credit to track the growth of society and the corresponding range of goods and service available.
He put is face on gold coin, gave it to soldiers, and demanded that his taxes be paid not in any-old-gold, but in Caesar-face gold. Thereby ensuring that recently conquered villages have an incentive to feed and house the solders that conquered them. This way, those soldiers didn't need to resupply before moving on to the next village.
It would seem that we've been using money to override ethics on behalf of the powerful ever since.
This has a lot to do with how think tanks are, on average, politically biased due to their funding sources, and so one could argue that it's not academics' fault.
Still, I often feel that academics in economics too easily abdicate their responsibility for how the subject impact society.
At university, I met (and roomed with) lots of economists, all of whom were solidly in the neoliberal camp. As perceptive readers might have realized, since then I've read and listened to a broader range of economic expertise. My favorite now is Richard Wolff.