tag:blogger.com,1999:blog-6245381193993153721.post4495769815489913556..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: My Posts on the Origin of MoneyLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger22125tag:blogger.com,1999:blog-6245381193993153721.post-64882788154517757702013-07-18T17:19:03.316-07:002013-07-18T17:19:03.316-07:00ALima
"If money and markets are not natural o...ALima<br />"If money and markets are not natural outcomes of human behavior where then could they have posibly come from?"<br /><br />Evidence indicates both markets & money to be creatures of law & government.<br /><br />For most of human history they did not exist.Anonymoushttps://www.blogger.com/profile/04501940617030009190noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-55709872671782460442013-07-18T17:16:01.082-07:002013-07-18T17:16:01.082-07:00Ivan Denisovich
"Doesn't really matter wh...Ivan Denisovich<br />"Doesn't really matter who invented coins. The point is that they were acceptable as wages because they could be exchanged for goods, not because the soldiers wanted the gold and silver in them."<br /><br />Coins had demand because of their acceptance in payment of taxes.<br /><br />Money existed before markets, contrary to what you wish to be the case.<br /><br />Anonymoushttps://www.blogger.com/profile/04501940617030009190noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-78768900357912371502013-07-18T17:12:10.742-07:002013-07-18T17:12:10.742-07:00In the case of Sumerian silver money, it was the p...In the case of Sumerian silver money, it was the public sector that acquired, refined, issued, set as the unit of account, denominated debts in and valued by fiat, silver into the economy.<br />Anonymoushttps://www.blogger.com/profile/04501940617030009190noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-4404581691083315792012-11-05T17:39:00.819-08:002012-11-05T17:39:00.819-08:00As there seems to be a really sophisticated reader...As there seems to be a really sophisticated readership here i thought i might get a good answer to the question here: How much is the Bundesbank worth? There was some discussion here in Germany because of the questionable claims the Bundesbank has to other central banks which might vanish when the Eurosystem should desintegrate (both unlikely imo but ok). I have some thoughts layed out here,<br />http://makrointelligenzint.blogspot.de/2012/11/how-much-is-central-bank-worth-what.html<br />but I m sure there is someone smarter than me here that could come up with something interesting.Makrointelligenzhttps://www.blogger.com/profile/07305478203133746792noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-51813060196637408822012-11-05T09:01:37.976-08:002012-11-05T09:01:37.976-08:00Pyramids and moonshots are child's play compar...Pyramids and moonshots are child's play compared to the staggering complexity of markets. Much less useful as well. Money is not an invention but a result of billions of acts playing out over time. The physical form it takes can change but its role in human actions does not. Humans will immediately abandon any manifestation of money that does not serve their needs. No government can change this, no institution can control it.Anthony Limahttps://www.blogger.com/profile/15923530382897881718noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-57901468706190069372012-11-05T01:17:28.588-08:002012-11-05T01:17:28.588-08:00LK
I also enjoyed Wray's recent paper "...LK <br /><br />I also enjoyed Wray's recent paper "Introduction to an Alternative History of Money" - May 2012 Working Paper no. 717 Levy Econommics Institute. SpiritSkillhttps://www.blogger.com/profile/12225172385830110611noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-14555930420905905032012-11-04T10:21:15.169-08:002012-11-04T10:21:15.169-08:00Doesn't really matter who invented coins. The ...Doesn't really matter who invented coins. The point is that they were acceptable as wages because they could be exchanged for goods, not because the soldiers wanted the gold and silver in them. Money without markets is not money. I believe the Lydians also established the first shops.<br />Ivan Denisovichnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-12325053011888445682012-11-04T01:52:29.072-07:002012-11-04T01:52:29.072-07:00But who invented coins? They were not invented in ...But who invented coins? They were not invented in Greece, but in Lydia.<br /><br />The standard view is that the Lydian state minted the first coins, and did so to pay soldiers and mercenaries:<br /><br />Cook, R.M. 1958. “Speculation on the Origins of Coinage,” Historia 7: 257–262.<br /><br />Kraay, C. M. 1964. “Hoards, Small Change and the Origin of Coinage,” Journal of Hellenic Studies 84: 76–91.<br /><br />Peacock, M. S. 2006. “The Origins of Money in Ancient Greece: The Political Economy of Coinage and Exchange,” Cambridge Journal of Economics 30: 637–650.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-1023645939768876352012-11-03T17:35:08.348-07:002012-11-03T17:35:08.348-07:00The city states in ancient Greece started minting ...The city states in ancient Greece started minting their own coins in 500 BC, which led to markets for a wide range of goods. Money has developed in too many places at different times to be explained by idiosyncratic factors. The common feature that made the use of money popular in different places is the trade of goods in markets.Ivan Denisovichnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-6190188599939874622012-11-03T08:26:55.743-07:002012-11-03T08:26:55.743-07:00"Fair enough, but Sumerians priests could not..."Fair enough, but Sumerians priests could not force the rest of the world to use gold and silver as the currency for their transactions."<br /><br />Not the rest of the world, but priests at this point would have a fair amount of temporal power (the church/state barrier being considerably more fluid than it is), and if you make requirements that taxes or tithes must be paid in certain amounts or certain forms, such as silver, or silver equivalents, in order to calculate the necessary amounts that people should be contributing, then you are going to have something developing in that vein. I believe Graeber makes the point as well that law codes and compensation are also a good place to look for in terms of the development of money; the Welsh medieval law code has thousands of different items and their relative compensations laid out, often on things that in all probability would not be commodities you would tend to find actively for sale in a medieval town market.<br /><br />There's certainly the point that the invention is useful, and that's why it gets adopted in wider terms but it didn't just emerge spontaneously out of the aether, either; there was human intention and design involved, not merely the vagaries of what would have been, back then, a minimal market economy.<br /><br />We're also shortening the timeframe here; we don't go right from "Sumerian priests" to a moneyed economy; it's a long-term development. Really, really, really long term; to be honest, I don't think we can really start talking about a proper, important monetary economy till the 18th/19th centuries. Before then there's still a lot of things transferred in kind or in goods and benefits; Rent to the landlord of two pigs and a bag of grain every year, that kind of thing.Freshly Squeezed Cynicnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-83358553448249659022012-11-03T05:18:06.744-07:002012-11-03T05:18:06.744-07:00Fair enough, but Sumerians priests could not force...Fair enough, but Sumerians priests could not force the rest of the world to use gold and silver as the currency for their transactions. The invention became very popular because people found it useful. Ivan Denisovichnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-80634959005476567022012-11-03T01:15:55.339-07:002012-11-03T01:15:55.339-07:00So now you reduce the "Mengerian account"...So now you reduce the "Mengerian account" to a much weaker claim: a "commodity becomes money via prior valuation as non-money."<br /><br />Even that does not necessarily follow: the commodity could have been valued as a weight measure, e.g., as silver in an ancient temple.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-68137840144922625552012-11-03T01:11:47.402-07:002012-11-03T01:11:47.402-07:00Humans designed the pyramids and technology to get...Humans designed the pyramids and technology to get them to the moon.<br /><br />Yes, no doubt some clever people in a Sumerian temple could not have devised an abstract unit of account based on a weight measure like silver. <br /><br />Tell me another fable.<br />Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-17158188159215127892012-11-02T18:19:03.683-07:002012-11-02T18:19:03.683-07:00If money and markets are not natural outcomes of h...If money and markets are not natural outcomes of human behavior where then could they have posibly come from? It just isn't reasonable to think humans could have designed such elegent solutions to resource distribution and general welfare. Most attempts to eliminate either has resulted in chaos and death.Anthony Limahttps://www.blogger.com/profile/15923530382897881718noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-59018233776603170822012-11-02T15:06:44.069-07:002012-11-02T15:06:44.069-07:00Yes, I really feel the heavy hand of State oppress...Yes, I really feel the heavy hand of State oppression when I buy CDs at my local flea market. And how much easier things would be if I had to beg or barter for the CDs instead of buying them with State-imposed money. Money and markets are instruments of human liberation, which is why totalitarian regimes like the Khmer Rouge abolished them.Ivan Denisovichnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-64351371474759607302012-11-02T14:27:12.246-07:002012-11-02T14:27:12.246-07:00Julia,
Using the word moneyness pivots the argume...Julia,<br /><br />Using the word moneyness pivots the argument from "is money the natural outcome of x" to "is a given asset's moneyness the natural outcome of x."<br /><br />And when that pivot happens, then it's evident that probably both the state and the individual are responsible for giving an asset its degree of moneyness. <br /><br />Put differently, the point you bring up shouldn't be an either/or question. It's a shade of grey question. Unfortunately, using the word "money" immediately shifts the debate into either/or territory. And that's when the debate turns into into an unhelpful pissing match. JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-61072259956645028712012-11-02T12:00:39.988-07:002012-11-02T12:00:39.988-07:00Actually, this matters quite a bit. What Graeber&#...Actually, this matters quite a bit. What Graeber's historical facts should be used for is challenging the ruling ideology that money and markets are a "natural" outcome of human behavior rather than institutions that were forced on populations by the state.Julia Riber Pitthttps://www.blogger.com/profile/03006439247714055292noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-66588909508329897852012-11-02T08:34:43.440-07:002012-11-02T08:34:43.440-07:00The Graeber - Menger debate is just a pissing cont...The Graeber - Menger debate is just a pissing contest that should probably be ignored. <br /><br />While the concept of "money" in day-to-day language is useful, "money" is (or at least should be) an empty concept in economics. The proper way to thing about the "things that we trade often" is in terms of moneyness. Moneyness is like a Keynesian liquidity premium (and you should be familiar with that, being the ghost of Keynes and all).<br /><br />From an economic standpoint, Who cares if moneyness gets attached to a credit instrument like a bill of exchange, or if it gets attached to a commodity like gold or bitcoins? The important concept isn't the underlying object, but the property of moneyness. The key question isn't the origin of money, but the origin of moneyness.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-86983242249325100452012-11-01T16:45:46.269-07:002012-11-01T16:45:46.269-07:00But in principle, there’s no reason to restrict ou...<b>But in principle, there’s no reason to restrict ourselves in this way.</b><br /><br />In other words, there is nothing in the Mengerian theory that compels us to restrict our attention to spot barter trades, <i>even if</i> Menger himself only ever considered spot barter trades in his explanations.<br /><br />It would be like criticizing an ancient text on economics on the basis that the author only considered salt in his explanations of money, rather than gold, or fiat notes, and other forms of possible money.<br /><br />The core of Menger's theory is a commodity becomes money via prior valuation as non-money, i.e. barter.<br /><br />Murphy is being rather generous to Greaber.Georgenoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-77699492317183698012012-11-01T10:39:52.014-07:002012-11-01T10:39:52.014-07:00"That's still BARTER trading.
Barter enc...<i>"That's still BARTER trading.<br /><br />Barter encompasses both credit and spot."</i><br /><br />Even if you want to declare credit/debt transactions in real goods a form of barter, this is ultimately just a red herring argument, that does not in any way refute the criticisms of the Mengerian account of money's origin, for that theory <i>still assumes barter spot trades</i>, and even Robert Murphy agrees:<br /><br /><i>In a crucial passage, Graeber says:<br /><br />> “[T]he flaw in the barter theory of the<br />> origin of money is that barter presumes<br />> SPOT TRANSACTIONS. There is no reason<br />> whatsoever to presume that neighbors <br />> would limit themselves to spot <br />> transactions in dealing with one <br />> another. However, if one does not <br />> presume spot transactions, then<br />> the notorious problem of the “double<br />> coincidence of wants” does not occur. <br />> You end up with a system of broad,<br />> non-enumerated credits, and this is<br />> precisely what those who actually did<br />> research on communities that do not use<br />> money did find.”<br /><br /><b>This is an excellent point, and Graeber is right: In the standard exposition of a barter economy, economists typically think in terms of spot transactions. But in principle, there’s no reason to restrict ourselves in this way.</b> If we can imagine a farmer trading a pig for an axe, we can also imagine a farmer trading a pig for a promise to deliver an axe in two weeks.<br /><br />Graeber is also right that the possibility of credit transactions expands the scope of a moneyless economy, and mitigates the problem of finding a double coincidence of wants.</i><br /><br />http://blog.mises.org/18371/murphy-replies-to-david-graeber-on-menger-and-money/<br /><br />Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-8209811074814717382012-11-01T09:44:44.383-07:002012-11-01T09:44:44.383-07:00Money-less societies are frequently dominated by d...<i>Money-less societies are frequently dominated by debt/credit transactions, or “gift exchange,” not by barter spot trades.</i><br /><br />That's still BARTER trading.<br /><br />Barter encompasses both credit and spot.<br /><br />Menger theory does not hold that barter cannot be credit based, even though he typically used spot for explanatory purposes.<br /><br />The key component of Menger's theory is that the value of a commodity that is money is borne out of its value prior, before it became a money, when it was a good that traded for other goods in barter transactions, which as said, can be both spot and credit.<br /><br />Graeber is actually imposing his own theory to interpret the empirical data he found. He is not a value free author who is allegedly letting the data speak for itself. Nothing in his book conclusively contradicts Menger's theory.Georgenoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-36912142057481544772012-11-01T05:17:10.322-07:002012-11-01T05:17:10.322-07:00"What Graeber denies is that the Mengerian or..."What Graeber denies is that the Mengerian or the barter spot trade theory is a universal theory of the origin of money."<br /><br />It's not quite clear to me from your emphasis, but I guess that 'universal' is the key word?<br /><br />It is a shame that no-one's found some record of barter exchange in ancient Mesopotamia developing into token exchange. That would have made things very neat and tidy. Unfortunately, as you say, the origin of money is frustratingly more complex.<br /><br />The problem I have with Graeber & the focus on Debt, is that underneath the shifting sands of all these theories (barter included) is the hard rock of property and exchange (or as I prefer to call them, Owning and Owing). Graeber mixes up the dry powder of Rospabe's Primitive Money theory and Primordial Debt theory to try and make some impact, but (for me) fails to do so significantly. (That's not to downplay the importance of Graeber's work in exposing the weakness of barter theory).<br /><br />But an excellent bibliography, Lord Keynes. I know you've done similar before, but these really are most welcome. And of great value to folks like me. Thank you.<br /><br />Personally, I'd always include Glyn Davies 'A History of Money' in any list like this. I guess you could argue that it's history rather then origin, but when he writes sentences like this, that suggest something universal and fundamental about money, I think he deserves a place (even if Graeber was somewhat dismissive of him in Debt - 5000 yrs)<br /><br />"...there is an unceasing conflict between the interests of debtors, who seek to enlarge the quantity of money and who seek busily to find acceptable substitutes, and the interests of creditors, who seek to maintain or increase the value of money by limiting its supply, by refusing substitutes or accepting them with great reluctance, and generally trying in all sorts of ways to safeguard the quality of money."<br />Glyn Davies A History of Money (1994) (p. 29)<br /><br /> <br />MBGhttps://www.blogger.com/profile/18404729484594219550noreply@blogger.com