I just finished reading Debt: The First 5000 Years by anthropologist David Graeber. The book examines the history of money, debt, and how they relate to social structures from a perspective that strays far from the conventional wisdom of economic thought.
Conventional wisdom paints a picture of people inefficiently exchanging goods and services directly with each other, and money naturally arises as a result of the problems inherent in this. Graeber eviscerates this narrative by looking at anthropological history. Primitive communities simply shared their resources freely with each other, living in a communal lifestyle, bartering was rarely done and only in the context of separate communities interacting with each other. It played no role in the intra-communal affairs of primitive societies.
Money, like commodity money, only began to be used in rare interactions between communities across great distances. The economy of local regions did not begin to use such exchange mechanisms. They used credit. Credit operated and supervised by the government, as in ancient Sumer. This system arose from the informal “credits” that people considered when sharing resources in more primitive societies. But it was formalized and maintained by the power structure of the government and temples of Sumeria. No money would change hands during exchanges, people would simply record debts stored in the temple and periodically pay off their obligations with actual consumer goods.
The debt predated the coinage and was created and maintained on a scale by the State. Commodity money only arrived later, again minted and circulated by the state, when large-scale trust-based civilizations collapsed and gave way to warring imperial states. Debt and credit don't make much sense in a period of constant war and roving armies, with no certainty that they will ever pay off the debts again after moving on.
Since then, with the anomaly of the modern era and central banks, human societies have oscillated between virtual credit money and coinage depending on whether the era of the time was predominantly based on large-scale war and conquest. The same patterns also repeated themselves over the centuries: people created their own informal, localized credit networks after the great coin-using empires fell, the government slowly inserted itself into them to mediate, and, inevitably, the return of currencies as violent empires emerged.
Bartar, as conventionally taught, was never really part of this process of money development, and the State invariably had a direct role in the formation of money systems and markets.
I'm sure many people are incredibly excited reading this, but Graeber's case is very strong and based on real historical and anthropological evidence, rather than speculation. Especially the idea that Chartalism has a much stronger foundation than many in this space would like to admit.
This actually makes bitcoin even deeper for me. bitcoin is not simply returning to a stateless money, I don't think one really existed after reading Debt. bitcoin is the first that stateless money ever exists. To me, that makes it an even more immense achievement and historical change.
Regardless of your financial inclinations, I recommend reading this book. It will give you a lot to think about in the context of bitcoin.
This article is a Carry. The opinions expressed are entirely those of the author and do not necessarily reflect those of btc Inc or bitcoin Magazine.
