Often this type of money is non-commercial in the sense that it is not used for everyday purchases of goods and services, or only rarely for such ordinary goods. It is thus non-commercial in that it is not a universal medium of exchange. The purpose of such non-commercial money is social. It is used for the following:
(1) the creation of new social ties, such as marriage through bridewealth, or membership of societies;Such non-commercial money might or might not have a peripheral role in market exchanges of everyday goods, but the primary purpose nevertheless appears to be social. It is even quite likely that (1) in our Stone Age past this type of “social currency” was the earliest thing recognisable as what we would call money, (2) that its non commercial function was for a long time far more important than the later “commercial” function, and (3) that non-commercial money long precedes commercial money (Einzig 1948: 983–984).
(2) to prevent blood feuds or breaches in social relations, such wergeld, bloodwealth, or mortuary payments, and
(3) to maintain or elevate social position, e.g., potlatch (Dalton 1965: 59).
In 1949, A. H. Quiggin made important points about “non-commercial money”:
“The evidence suggests that barter in its usual sense of exchange of commodities was not the main factor in the evolution of money. The objects commonly exchanged in barter do not develop naturally into money and the more important objects used as money seldom appear in ordinary everyday barter. Moreover, the inconveniences of barter do not disturb simple societies. The variety of material and the complexities of uncivilized attitudes towards money preclude generalizations, but the evidence appears to support the following line of argument.Paul Einzig argued a long time ago that it was possible that “money first developed to serve matrimonial, political or religious payments was only later adopted gradually for commercial purposes” (Einzig 1948: 984).
In the beginning Man lived in self-supporting and self-contained groups. Except in an area where provisions are unlimited, a society depending on hunting and food-gathering for its subsistence is necessarily unsociable and ‘has no truck’ with its neighbours. Early exchanges were in the way of present-giving, and were expressions of friendship with no ulterior economic purpose, although the latter – an expectation of an adequate or even improved return – cannot be excluded from human dealings. Present-giving or gift-exchange, seen in simple forms in the Andamans, Torres Straits or New Zealand, may develop into elaborate ceremonial as in Fiji or the North-West of America, but remain distinct from trading with money.
Barter develops between areas of contrasted produce, such as coastal and inland, forested and open country. We see the barter of fish or shells for vegetables, game for bananas, &c., in Melanesia or the Congo, and the establishment of regular markets. Trading voyages such as those of Torres Straits and New Guinea take us a stage further by the introduction of conventional presents. But so far there is no need for any medium of exchange such as is commonly described as money.
This is the state of affairs over about half the world at the present day. Barter suffices for most of the natives of Australia, New Zealand and the islands of the Pacific, and for the less-advanced peoples of Africa, Asia and the Americas, where native economy is not upset by the trader and the missionary.
The use of a conventional medium of exchange, originally ‘fullbodied’ but developing into ‘token’ money, is first noted in the almost universal customs of ‘bride-price’ and wergeld. When sister-exchange is not practicable, some other value must be substituted; where life for life is not demanded, some equivalent must be found. The history of ‘bride-price’ and wergeld (which has yet to be written) shows how formal the customary gifts become, fitted to definite scales of value. It is not without significance that in any collection of primitive currency the majority of the items are described as ‘used in bride-price’.
When once a system of conventional gifts or payments with a definite scale of values has been established (and this is necessary for ‘bride-price’ and for wergeld) the first steps are taken in the evolution of money. …. The objects that come to be used as money are mainly non-local, or if local are the product of a special area or a special class; and they have prestige or essential virtue, religious or magical. Cowries and beads, most universal of all forms of primitive money, have magical as well as monetary value and still hold their own over a large part of the world, though everywhere disappearing now with the advent of the trader and trade tobacco. (Quiggin 1949: 321–322).
Even when commercial money does develop, gift exchange and credit/debt transactions in kind might remain the main method of exchange in tribal societies. Einzig, for example, notes how the indigenous people of the New Hebrides had a developed credit system denominated in terms of pigs, which arose from the sacrificial use of pigs (Einzig 1948: 984; Einzig 1949: 383). One can note how even ancient Greece – the basis of Western civilization – had a cattle standard of value in its Dark age and early Archaic age, which probably arose from the use of cattle in sacrifice (Seaford 2004: 61). The same general type of cattle unit of account seems to have developed in ancient India as well (Einzig 1949: 382).
Now how do the observations above fit in with other theories of money’s origins such as
(1) the barter spot trade origin theory (e.g., held by Adam Smith, Mill, Menger and Mises),And how does it fit in with the empirical evidence that a unit of account was developed by planners in temple institutions in ancient Egypt and Mesopotamia?
(2) the credit origin theory (Mitchell Innes),
(3) chartalism (Knapp), and
(4) Grierson’s (1977 and 1978) thesis on wergeld and money?
It fact, I would contend that it is perfectly complementary, because no single theory is the entire story. The subject of the origins of money is a deeply complex and difficult problem, and these are all pieces of the puzzle. It is obvious that the historical origin of money cannot be traced to one moment of invention in the past: for there have undoubtedly been multiple independent instances in history where things have emerged as a unit of account and medium of exchange in different societies in different times.
The existence and origin of “social currency” or “non-commercial money” is yet another important empirical fact ignored and neglected by economists.
To sum up: a useful conceptual division in any study of money is one between
(1) commercial money, andNon-commercial money is mainly used in social interactions, often formal social events such as marriage, wergild and bloodwealth payments, political relations (potlatch, moka), and fines and compensations (compensation for adultery, or for things lost), and may only be rarely used for everyday purchases or commercial transactions.
(2) ceremonial (or non-commercial) money, “social currency,” “social money” or “special-purpose money” (see Dalton 1965: 184; see also Bell and Henry 2001: 205–206).
Appendix: Georg Thilenius on Primitive Money
G. Thilenius (1921) introduced another relevant distinction with regard to money: he distinguished between “Nutzgeld” and “Zeichengeld.” Nutzgeld (“useful money”) refers to useful objects in exchange, while Zeichengeld (“token money”) refers to objects of ceremonial or token value (Quiggin 1949: 3). Thilenius also distinguished between natural money (“Naturgeld” or objects of nature) and cultural money (“Kulturgeld” or objects manufactured or produced by human beings). These are perhaps further useful conceptual distinctions to be borne in mind.
Bell, S. and J. F. Henry, 2001. “Hospitality versus Exchange: the Limits of Monetary Economies,” Review of Social Economy 59.2: 203–226.
Dalton, G. 1965. “Primitive Money,” American Anthropologist 67: 44–65.
Einzig, Paul. 1948. “New Light on the Origin of Money,” Nature 162.4130 (25 December): 983–985.
Einzig, Paul. 1949. Primitive Money: In Its Ethnological, Historical, and Economic Aspects, Eyre & Spottiswoode, London.
Graeber, David. 2011. Debt: The First 5,000 Years, Melville House, Brooklyn, N.Y.
Grierson, P. 1977. The Origins of Money, Athlone Press and University of London, London.
Grierson, P. 1978. “The Origins of Money,” Research in Economic Anthropology 1: 1–35.
Seaford, R. 2004. Money and the Early Greek Mind: Homer, Philosophy, Tragedy, Cambridge University Press, Cambridge.
Thilenius, Georg. 1921. “Primitives Geld,” Archiv für Anthropologie 18.1: 1–34.
Quiggin, A. H. 1949. A Survey of Primitive Money: The Beginnings of Currency, Methuen, London.