Debt - the origin of money
12-20-2024
, 12:57 PM
Quote:
I've been reading a lot of economics and economics history over the last couple of years, and I finally feel like I'm coming round to a place where I can answer what for me is a foundational question:
Where does money come from?
I was quite happy with the 'barter economy' argument. At first, we were faced with the inconvenience of having to work out a suitable exchange rate, my corn for your steak, hope that i need what you have and vice-versa. To make the system more efficient, we would use primitive currency to denote the values and that takes us from a barter economy to a money economy.
However, I am coming round to the view now that money originates from debt. That there is no evidence that barter existed in significant proportions in prehistoric times, let alone was the origin of money. That the imagined direction of travel of 'barter -> money -> debt' needs turning on its head and its in fact 'debt -> money -> barter'. The idea is that sometimes trade between rival societies might not have been able to operate on a level of credits and debts and trust, but friendly societies would have engaged in debts before they used money, and within societies there would have been no need for money at all as everyone trusted everyone else sufficiently, both with their lives and to pull their weight and not take more than their fair share.
Where does money come from?
I was quite happy with the 'barter economy' argument. At first, we were faced with the inconvenience of having to work out a suitable exchange rate, my corn for your steak, hope that i need what you have and vice-versa. To make the system more efficient, we would use primitive currency to denote the values and that takes us from a barter economy to a money economy.
However, I am coming round to the view now that money originates from debt. That there is no evidence that barter existed in significant proportions in prehistoric times, let alone was the origin of money. That the imagined direction of travel of 'barter -> money -> debt' needs turning on its head and its in fact 'debt -> money -> barter'. The idea is that sometimes trade between rival societies might not have been able to operate on a level of credits and debts and trust, but friendly societies would have engaged in debts before they used money, and within societies there would have been no need for money at all as everyone trusted everyone else sufficiently, both with their lives and to pull their weight and not take more than their fair share.
Money DOES NOT originate from debt... that is a fundamental misconception about what 'Money' is.
Currency originates from issuance of debt and the 'promise to pay'... but money by definition is Fungible.
Get it... Live it.
12-20-2024
, 02:43 PM
I'm more interested in exploring the evolution of money through the lens of anthropology, which shows pretty conclusively that whether you want to call it currency or money, its origin is debt.
I can share book covers too:
Most modern economics, whether neoclassical or neoliberal, seems to me somewhere between fictional and an inappropriate oversimplification of what is better understood as a living ecosystem than some physics analogy.
Before debt, I also read:
Which also presents a highly neoliberal take on the origin of money and importance of finance within world history.
It is difficult to trust those in the profession who prefer to eschew real-world data and insist on economics remaining a purely theoretical affair: https://www.theatlantic.com/educatio...nomics/578092/
When these economists fail to predict economic downturns or to integrate real world data on stuff like the minimum wage or rent control, it gets hard to understand why they command the respect that they do within the profession, until you remember where their funding comes from.
I can share book covers too:
Most modern economics, whether neoclassical or neoliberal, seems to me somewhere between fictional and an inappropriate oversimplification of what is better understood as a living ecosystem than some physics analogy.
Before debt, I also read:
Which also presents a highly neoliberal take on the origin of money and importance of finance within world history.
It is difficult to trust those in the profession who prefer to eschew real-world data and insist on economics remaining a purely theoretical affair: https://www.theatlantic.com/educatio...nomics/578092/
When these economists fail to predict economic downturns or to integrate real world data on stuff like the minimum wage or rent control, it gets hard to understand why they command the respect that they do within the profession, until you remember where their funding comes from.