“The flaw in the barter theory of the origin of money is that barter presumes SPOT TRANSACTIONS. There is no reason whatsoever to presume that neighbors would limit themselves to spot transactions in dealing with one another. However, if one does not presume spot transactions, then the notorious problem of the “double coincidence of wants” does not occur. You end up with a system of broad, non-enumerated credits, and this is precisely what those who actually did research on communities that do not use money did find.Graeber refers here to the work of Caroline Humphrey, and her paper “Barter and Economic Disintegration” (Man 20.1  48–72), which I have not as yet seen.
Here the evidence is simply in and you’d think an honest economist would acknowledge it. As Caroline Humphrey of Cambridge in the definitive anthropological work on barter put it, “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing.” (By “barter economy” of course she means a community in which this is how everyday goods are normally distributed amongst neighbors.) Arguing that it might have been a brief period of history which we never happen to have noticed anywhere is a perfect example of special pleading.”
And Graeber does a wonderful job of exposing the sheer folly and absurdity of the pure aprioristic method in Austrian economics where empirical evidence is ignored:
”As for the supposed refutation of my example of the village where people loan things to one another, no, the commentator does not get my argument right at all. First of all, we are not dealing with a situation where people borrow things from one another and expect an equivalent of exactly the same value. I suppose the certain Austrian school theories of human nature assume that’s what neighbors in a moneyless economy would do with one another, but again, this just shows a flaw in those theories of human nature, because when tested against the empirical evidence, this is not what one finds. What one finds are a variety of mechanisms of distribution, some open-ended sharing, some relatively centralized allocation (the actual Iroquoian societies that people like Jevons used as examples mainly had women’s councils allocate things and didn’t swap directly between households at all), and some direct exchange, particular[ly] with people in that vague middle ground between neighbors and strangers – but that exchange was based not on exact value equivalence – a concept that presumes the prior existence of money in the first place, and is therefore completely illogical to attribute to people unfamiliar with the use of money to buy and sell things – but a broad sense of owing someone a favor of a roughly equivalent sort. This need not be a material object at all, it could be help, or ritual sponsorship, or maybe your son is in love with your neighbor’s daughter, but let’s leave that aside for a moment. Insofar as it is goods, it would generate a system of vague ballpark equivalents. And this is indeed what one finds where there is extensive “gift exchange”: a rank system, whereby certain types of goods are seen as roughly equivalent to others, but not a proportional (i.e., monetary) system where you can say how many of this type of rank B objects is equivalent to one of these rank A objects. The question is what would be the circumstances that would generate a system where one can measure such precise equivalents. Here, again, ethnography provides endless examples of what actually does happen and it’s nothing like the economists predict.”The arm-chair Misesian praxeologists have nothing much of any importance to say about the real world, unless they engage with empirical evidence in a serious way.
“What is Debt? – An Interview with Economic Anthropologist David Graeber,” August 26, 2011.
The original interview with Graeber that sparked the debate.
Robert Murphy, “Murphy Replies to David Graeber on Menger and Money,” Mises.org, September 8, 2011.
Graeber, David, 2009. “Debt: The First Five Thousand Years,” Eurozine.com, 2009-08-20.
Graeber, David. 2011 Debt: The First 5,000 Years, Melville House, Brooklyn, N.Y.
Humphrey, C. 1984. “Barter and Economic Disintegration,” MAN 20.1: 48–72.
(reprinted in S. Gudeman (ed.). 1998. Economic Anthropology. The International Library of Critical Writings in Economics, Edward Elgar, Cheltenham UK).