They used money. The Incas had a system for accounting using knots https://en.m.wikipedia.org/wiki/Quipu
You don’t need physical coins to have money
You don’t need physical coins to have money
I know it's all tightly related, but I believe there is a difference.
Comparing this to coinage, the innovation of coins introduced a standardized physical object that could represent value, which allowed for a different kind of economic activity not solely based on personal trust and relationships. Coinage enabled transactions with strangers and facilitated trade over larger distances and among larger groups of people, where personal credit relationships were not feasible.
Money, has a specificity to it. In essence, while early credit systems were based on social relationships and trust within communities, coinage represented a more impersonal and widely accepted medium of exchange that did not necessarily rely on social bonds. This distinction is crucial because it allowed for the expansion of trade and the concept of money as an abstract unit of account, rather than a direct reflection of social debts and credits.
Social relationships are still important the higher you go in finance - it’s much easier to get a $100 million loan for a new building with a strong relationship with a banker than as a stranger, regardless of collateral.
I think a pre-commercial time where people didn’t care about money is a fiction.
While it is true that trade is evident from ancient times, with goods found at burial sites that originated thousands of miles away, this does not automatically imply that all trade was facilitated by a commoditized asset serving as a universal medium of exchange. In many cases, goods like salt, furs, and metal objects were indeed used in trade, but they were part of a broader system of barter and reciprocal exchange, which could function effectively without a standardized form of money.
Regarding the role of social relationships in finance, while it's accurate that relationships remain crucial, especially for large transactions in modern times, this does not discount the fact that in the past, community trust and social bonds were often the primary means of securing credit, not collateral or commoditized money. This is evident in how competitive markets and the scarcity of trust can affect transactions, as Graeber notes through an anecdote where mutual aid within a community was a given, not a transaction requiring formal repayment.
The idea of a pre-commercial time where 'people didn't care about money' may indeed be fictional, but it's more nuanced than simply saying they used money in the way we do now. They cared about value and exchange, but these were frequently managed through social mechanisms rather than through impersonal, commoditized money. It's essential to understand that the concept of money has evolved and that early forms of trade and credit were valid economic systems in their own right, even if they don't match the monetary systems we are familiar with today.
This is speculation.
> earlier societies often operated on principles of reciprocity and communal sharing rather than for-profit trade.
Any society that had specialization of labor did more than that. Heck, the American Indian tribes measured their individual wealth via horse ownership. They certainly engaged in trade with the intent of profit.
If you believe that early man was capable of thinking, "This shit is my shit, that shit is your shit, and if you take my shit I will punish you", then you have the precursors for capitalism. Academics like to throw a bunch of other nonsense around but that's it.
"Capitalism is an economic system based on the private ownership of the means of production and their operation for profit."
You can't have wage labor unless you have money as a construct.
> Also during Pericles' tenure, pay for civic service was instituted. No single other reform furthered democracy as much as pay for service. Now many more people could afford to serve, and for some, serving became attractive financially. First, dicasts, or jurors, began to be paid. A low rate, but half a day's wages or so. That was introduced by Pericles while Cimon was still around, perhaps to counteract his liberality with his own wealth. Jurors were appointed by lot annually and could serve year after year. By 422 (Aristophanes Wasps 662), there were 6,000 jurors per year. Cleon increased the pay rate to 3 obols a day. Pericles also started the payment of soldiers and sailors 3 obols a day.
https://www.uvm.edu/~jbailly/courses/clas21/notes/atheniande....
You have a very formal, academic understanding of capitalism while we are arguing that the fundamental ideas of capitalism naturally exist because that's logical for human psychology - owning things, trading, markets, paying people for labor. This is all stuff that goes back to the earliest recorded records. Cuneiform tablets are just endless accounting ledgers.
It's economy wasn't modern free market system focused on capital accumulation and investment for profit. It was a mixed economy with significant state involvement and a variety of revenue sources that went beyond simple market transactions.
State actors paying their civil servants isn't evidence of capitalism, or wage labor.
( David Graeber does write about ancient Greek city-states and how their coinage came to be, according to the historical and archeological record, in "Debt: The First 5000 Years," by the way. )
Capitalism, is a relatively modern phenomenon, with a pretty common, well understood definition. This isn't a heretical or radical idea. You may find some societies prior to the 16th/17th century that fulfills some characteristics of capitalism, but they don't make the cut.
People naturally want to trade. Markets existed before capitalism and they will exist after capitalism.
This smells like "socialism works fine it just that all the failed attempts were doing it wrong".
That sentence just clarifies what the first sentence implicitly requires, as you cannot trade for profit unless you have property rights, etc.
modern money, whether digital or physical, serves several key functions: it is a medium of exchange, a unit of account, and a store of value. While the quipu certainly functioned as a unit of account, it's not clear that it served as a medium of exchange or a store of value. These are essential characteristics that define 'money' in the economic sense.
the impersonal nature of coinage and modern digital money allows them to facilitate trade and economic activity on a scale and with a degree of anonymity that's not possible with a system like quipu, which is deeply embedded in the social and political fabric of the society that uses it.
The transition to coinage and later to digittal transactions represents a move towards a more standardized, divisible, and portable form of money that can be used in a wide range of transactions, with or without a pre-existing relationship between the parties involved. This is quite different from the quipu, which was embedded in a specific cultural context and may not have been readily exchangeable or understood outside of that context.
So while it's tempting to draw parallels between ancient accounting systems and modern digital currencies, we must be careful not to conflate the two. Each serves its purpose within its particular economic and social milieu, with specific attributes and limitations that define its use as "money."
Source for the confidence here? We know that a corvée economy existed, but I’m skeptical that we can rule out private quipo-based exchange. The evidence base is pretty thin; a lot of stuff didn’t survive Pizarro.
Extensive trade international trade networks existed during the entire bronze age and the preceding periods without any coins, though. Coins are useful as an standardized accounting unit and are easy to transport but fundamentally are not that different from barter.
But the key difference (I have been told) is what you can do with that accounting.
Like, I can walk into a shop and buy anything on the wall with money, whereas that kind of accounting may have very different implications for what you can do with it.
Additionally, I can take money that I gathered from one source and use it somewhere else, and it's fungible in that I can use it anywhere else in the system. If I have a debt to one person in earlier systems that debt may be non-transferable.
If those two elements are true, it becomes very difficult to do a lot of the things that we think of as money, specifically interest and massive accumulation.