I just finished reading Debt: The First 5,000 Years by anthropologist David Graeber. This book examines the history of money and debt, and how they are related to social structure, from a perspective that significantly deviates from the conventional wisdom of economics.
Conventional wisdom paints a picture in which people exchange goods and services directly with each other in an inefficient way, and money naturally arises as a result of the inherent problems. Graeber wateres down this narrative by looking at the history of anthropology. Primitive communities simply shared resources freely with each other, lived communally, and bartered very little, only in situations where separate communities interacted with each other. It played no role in the intra-community affairs of early societies.
Money, like commodity money, began to be used only in interactions between distant and rare communities. Local economies have not begun to use such exchange mechanisms. They used the credits. A trust run and supervised by a government, such as in ancient Sumer. This system grew out of the informal “credits” that people in more primitive societies took into account when sharing resources. However, it was formalized and maintained by the Sumerian government and temple power structure. There was no exchange of money during the exchange, people simply recorded their debts, which were kept in the temple, and periodically settled them with real consumables.
Debt existed before money and was created and maintained on a large scale by states. Commodity money was again minted and circulated by states after civilizations based on mass trust collapsed and gave way to warring imperialist states. In an age where wars are constant and armies are on the move, debt and credit don’t make much sense. After moving, there is no certainty that you will come back to settle the debt.
Since then, due to the anomalies of modernity and central banking, human society has oscillated between virtual credit money and hard currency, depending on whether the era at the time was predicated primarily on large-scale wars and conquests. The same pattern was repeated throughout the ages, with the collapse of large money-using empires, people building their own informal, localized credit networks, and governments gradually entering those networks to mediate. The rise of violent empires inevitably saw a revival of coinage.
As traditionally taught, Baltar was never actually involved in the process of monetary development, and the state was always directly involved in the formation of monetary systems and markets.
I’m sure many people will be incredibly excited to read this, but Graeber’s case is very solid and based on actual historical and anthropological evidence, not speculation. In particular, the idea that Charterism has far sounder foundations than many in the field would like to admit.
This actually makes Bitcoin even more profound for me. Bitcoin isn’t just stateless money back, and after reading The Debt, I don’t believe it ever really existed. Bitcoin is the first stateless currency in history. For me, I think that’s an even bigger accomplishment and a historic change.
Regardless of your financial leanings, I recommend reading this book. There is a lot to think about in the context of Bitcoin.
This article is a take. The opinions expressed are solely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
