Friday, February 10, 2012

Quiggin on the Origin of Money

In 1949, A. H. Quiggin published A Survey of Primitive Money: The Beginnings of Currency (London). The summary of the author’s views on the origin of money is worth quoting:
“Writers on the origin of the use of money often start with a consideration of barter and its inconveniences. From ‘silent trade’ (a primitive though abnormal form of barter) they trace the evolution of trading and money side by side, relying mainly on literary evidence for probing into the past.
This study relies mainly on the tangible evidence of the actual types of primitive money or money-substitutes used by ‘unrisen’ people and others all over the world, and is concerned with the purposes, when discoverable, for which they were used. 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.
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. It develops thereafter in response to human needs into the accepted medium of exchange. Nutzgeld still remains Nutzgeld. Cattle may constitute wealth and form a standard of value. They cannot, strictly speaking, be called money. Money, to be generally acceptable, needs more convenient material and finds the four essential qualities (portable, divisible, durable, recognizable) in shells, beads or metals. Two further qualities have been shown to be necessary, one geographical and one more difficult to define.
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. Metals best illustrate the transition from ‘full-bodied’ to ‘token-’ money. The spears and hoes of Africa, the knives and spades of China, and the spits of Argos are familiar examples. The tools may become amorphous and valued according to their weight in metal, or survive as attenuated imitations of their former selves. Metal, whether gold, silver, copper, iron or tin, is everywhere useful and everywhere valued, and estimated by size, shape or weight. Ingots are preliminary stepping-stones to coins. Ingots, as lumps or bars, develop in response to local needs or whims in special forms, such as manillas, Katanga crosses and Kissi pennies, Malay hats and Siamese bullets, or our own currency bars and ‘ring-money’.

To us, looking backward, the next step appears obvious and inevitable, but it was only in rare spots (possibly only in one rare spot) in the Old World that the final stage was reached, and definite weights of metal, rounded, flattened and stamped, can be called coins. Here the study of primitive money comes to an end.” (Quiggin 1949: 321–322).
It is remarkable how the details of the modern anthropological critique of the economists’ view of the origin of money were already available in 1949: gift exchange is the usual form of internal commodity exchange; barter spot trade has been most significant between societies; barter is not the only story in the origin of money (although there are instances of money emerging this way); and social practices such as wergild and bride-price also have a role to play in the origin of money.

Most astonishing is the observation that “primitive” money has historically been thought to have magical properties by human beings, a state of affairs far from the limited and wretchedly ignorant ideas of economists, who rely too much on a priori theorising.

In many ways, what Graeber (2011) writes on the origins of money is a useful, modern re-statement of what has been known for some time.


Graeber, David. 2011. Debt: The First 5,000 Years, Melville House, Brooklyn, N.Y.

Quiggin, A. H. 1949. A Survey of Primitive Money: The Beginnings of Currency, Methuen, London.

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