I have just completed reading Debt: The First 5000 Years by anthropologist David Graeber. The book examines the historical development of money and debt, alongside their connections to societal frameworks, through a perspective that significantly diverges from the standard doctrines of economic thought.
Standard belief illustrates a scenario where individuals awkwardly exchange goods and services directly with each other, with money emerging naturally due to the complications that arise from this. Graeber dismantles this narrative by exploring anthropological history. Early societies regularly exchanged their resources openly among themselves, living communally, with barter seldom occurring and only in the context of separate communities engaging with one another. It held no significance in the daily interactions within early communities.
Commodity money only began to be utilized in infrequent inter-community exchanges across vast distances. The economies within local areas did not implement these forms of exchange mechanisms. They relied on credit. Credit was managed and supervised by governmental entities, such as in Ancient Sumer. This system evolved from the informal “credits” that individuals acknowledged when sharing resources in more primitive societies. However, it was systematized and upheld by the authoritative structure of the government and temples of Sumer. No money changed hands during transactions; individuals simply recorded debts housed at the temple and periodically reconciled their responsibilities with actual consumable goods.
Debt existed prior to coinage, and it was generated and maintained extensively by the state. Commodity money emerged subsequently, again minted and circulated by the government, as large-scale trust-based civilizations crumbled, giving rise to warring imperial states. Debt and credit don’t hold much significance during an era characterized by continuous warfare and wandering armies, where there’s no assurance of ever returning to settle debts after moving on.
Since then, with the exception of the modern era and central banking, human civilizations have alternated between virtual credit money and coinage based on whether the period was predominantly marked by extensive warfare and conquest. This same trend has recurred over the years, with individuals establishing informal and local credit networks following the fall of large Empires that used coinage, the government gradually inserting itself into these networks to mediate, and inevitably the resurgence of coinage as violent Empires arose.
Barter, as traditionally taught, was never truly a component of this evolution of money, and the state invariably had direct involvement in the establishment of monetary systems and markets.
I’m certain many readers may feel quite provoked by this assertion, yet Graeber’s argument is robust and founded upon genuine historical and anthropological evidence, rather than conjecture. Particularly, the notion that Chartalism has a more solid foundation than many in this field would prefer to recognize.
This reality renders Bitcoin even more significant for me. Bitcoin isn’t merely reverting to a stateless form of money; I don’t believe one ever genuinely existed after delving into Debt. Bitcoin is the first instance of stateless money to ever surface. To me, that enhances its status as an extraordinary achievement and historical transformation.
No matter your economic perspectives, I suggest you give this book a try. It will provide you with considerable food for thought in relation to Bitcoin.
This article is a Take. The views expressed are solely those of the author and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
