I disagree with David Graeber, money started millions of years ago; all money is barter: Money is Biological book

This is an excerpt from my book “Money is Biological: Exploring Money’s Emergence, Evolution, Innovation, and Future.” It’s available on Amazon.

– – –

When money evolved arguments

There are mainstream arguments of when money evolved from barter to commodity money and to fiat money.

Perhaps the most contrary but evidential was the late anthropologist and anarchist activist David Graeber’s argument that debt is the first form of money in his 2011 published book, ”Debt: The First 5000 Years[i].”

It posits debt (the credit system, i.e. debtors and creditors) as one of the first forms of money, and probably preceded barter and cash, dating back to about 5000 years ago in Uruk, Mesopotania, present day Muthanna Province in Iraq.

Some of the credit transactions account debtors and creditors, and are evidenced and recorded on clay tablets written in one of the earliest form of writing discovered called cuneiform.

One of the transactions[ii], with signed witnesses, show the discharge from debt owed to Ashur-taklaku of a silver loan. This happened in Kanesh, now an archaeological site in Kayseri Province of modern day Turkey, dated back to about 2000 BC.

The tablets recorded a mixture of traded commodities, such as grain, textiles, garments, sheep and other livestock.

To which I agree, Graeber mentions there is no reason to believe credit or debt was not used anywhere else in the world.

The Ishango bone[iii] discovered in present day Democratic Republic of Congo in 1950 dates back to about 20 thousand years ago. It has these tally marks that give rise to varying and multiple hypotheses, like that it was a counting[iv], accounting[v], astrological or calendar tool.

It could have been used to record trades or valuing of goods. The jury is not out on this.

This is why in the previous chapter I mentioned that newer archaeological evidence can still be discovered that can refute existing strong hypothesises.

So, credit could have been widespread across the globe during or prior the Mesopotamia era.

It could have evolved in other parts of the word unknown to each other before, just like language.

We often use debt and credit synonymously – which I will do here. In a relational sense, debt is the amount owed (by the debtor) and credit is the balance that can be borrowed further (from the creditor).

In this book I use credit as the umbrella term to describe the phenomenon of borrowing between creditor and debtor.

I infer that a mere cooperation between tribes or animals is a semblance of a credit system. It is bartering (the upper umbrella term) that will be paid in future through corporation. Animals protect their packs all the time (give out credit) and the others also reciprocate when necessary (pay back the debt): elephants, orangutans, orcas, lions, wolves, polar bears, elephants, emperor penguins, dolphins, chimpanzees, bees, birds, mice, kangaroos, hyenas, and cheetahs. Baby animals learn this and reciprocate when they are older. It’s how they repay the debt (credit) to their tribe.

This is bartering.

The thesis of the book being that money is barter and stacks other manmade innovations to achieve a an ever progressing transformation of or into agility and efficiency, e.g. gold which is heavy to carry evolved (got innovated) to be represented by gold certificates which were and are easier to carry – these certificates gave way for paper money (cash), etc.

The need for bartering came first and naturally in animal cooperation and reciprocation. By bartering cooperation, they gave a not so explicit credit system.

So, the current credit system of debtor and creditor is fundamentally barter but explicit and can move –does move – outside tribal or pack corporation.

Therefore, barter co-opts the explicit innovation of the credit system (debtor and creditor). That humans did and do innovate tools (commodities) adds an ever growing frequency layer (so exponentially), i.e. they have more to trade (barter). This cements the credit system by adding volume to it.

You could say barter is the umbrella, but has dimensions of a credit system. This becomes emergently and naturally when cooperation extends across tribes and nations.

To encapsulate this, barter stacks and co-opts all these identified means of trading: commodity money, cash, fiat and the credit system.

This means along the way they stack literal and invented innovations: (in no particular order) writing as means of recording debt – e.g. cuneform, clay tablets, paper for cash or gold certificates, metals for coins, blockchain for cryptocurrency, Hindu-Arabic numerals, etc.

These newer innovations that get co-opted into money are just newer representations of barter.

Perhaps I am extending David Graeber’s argument to say credit started millions of years ago when cooperating animals evolved. In this cooperating credit system, they are fundamentally exchanging utilities which then is bartering. So fundamentally, barter is the start of money and co-opts the other forms we’ve mentioned.

Again, therefore, the concept of money is emergent and is propelled by that we innovate beyond chimpanzees progressively, and diverse products – exponentially so.

Graeber criticised historical economists for always inferring that their barter explanations gave hypothetical scenarios and not evidence. He argued that such evidence does not exist.

Also, to back up the resolution of using a hypothesis, evidence of barter of other goods, e.g. of trading a cow for goats, would not exist as such as the evidence of a coin or the clay tablets. The goats and cows were eaten and are part of the soil.

Also the Mosopotania examples show barter trading but in the form of credit – as I infer credit to be a dimension of barter.

They exchanged (bartered) goods through an abstraction they conceived called credit.

I mentioned our human brain can construct (abstract) future based values. Credit is such.

I like Graeber’s argument. It challenged and popularised an evidential digging deeper of what is money.

[i] Debt: The First 5,000 Years (Tenth Anniversary Edition) | By David Graeber | ISBN 9781612199337 | Publication 11 May 2021 | https://www.harvard.com/book/debt_tenth_anniversary_edition/

[ii] Cuneiform tablet: quittance for a loan in silver | ca. 20th–19th century BCE https://www.metmuseum.org/art/collection/search/325857

[iii] Mathematical Treasure: Ishango Bone | By Frank J. Swetz | March 2014 https://www.maa.org/press/periodicals/convergence/mathematical-treasure-ishango-bone

[iv] The fables of Ishango, or the irresistible temptation of mathematical fiction | By Olivier Keller | February 2015 http://www.bibnum.education.fr/sites/default/files/ishango-analysis_v2.pdf

[v] Neanderthals: The Earliest Accountants in History | Circa 2014 https://hankeringforhistory.com/neanderthals-earliest-accountants-history/