Not this myth again. Barter exists and was widespread. It exists alongside exchange of units of value in societies where the money supply in insufficient (often pre-modern) or when the currency is unreliable or volatile (often modern).
Ok, it exists but it wasn’t the predecessor of money. It’s not that the “double coincidence of needs” or what it is called made money a necessity. That’s my point and I worded it poorly, sorry for that.
It’s alright. I just see people argue that barter DIDN’T exist as a widespread pre-modern phenomenon. I get touchy about that, lol
Barter is just no longer regarded as a predecessor (in any meaningful sense, at least) to units of value. Low standardization of currency, poor supply, lack of central authority, all of these (unavoidable, in the pre-modern era) things make barter an integral, and sometimes larger than currency, part of pre-modern market economies, especially in terms of consumer exchange. Units of value end up taking the ‘small change’ (relatively speaking) part of exchanges, or even just an expression of the values exchanged (such as “Twelve cattle worth of silver”).
And in non-market economies, barter remains an essential part of exchange with strangers. It’s just that if exchange isn’t your primary means of acquiring goods, the idea of a standardized unit of value becomes much less important - or even pointless (“If currency fluctuates in value, why would I not just keep trading goods for goods, since that would be the same thing without the added hassle of keeping something useless?”) so barter in those societies is sometimes kept without money. But in societies where mutual exchange is the main means of acquiring goods? Units of value are always there. Exchange must have existed before units of value - but it only becomes practical on a large scale when you have a consistent (or at least SOMEWHAT consistent) unit of value to measure things by.
Here’s twelve beaver pelts’ worth of rum for listening to my rant.
barter remains an essential part of exchange with strangers
While this is true, exchange with strangers isn’t the primary means of exchange in many societies. You can give your neighbor shoes they need to work on the fields and they own you one, later in fall they give it back in potatoes they harvest. No need to have a sack of potatoes in the moment you need new shoes. These IOUs get formalized into quantifiable valued you can write down and that’s fiat money.
Neighbors aren’t strangers. When I say strangers I mean like “Person you have never seen before passing through”. There’s an issue with that called ‘moral hazard’ - when it’s your literal neighbor, if he wrongs you, you have forms of recourse. You literally know where he lives. If a stranger wrongs you, you have no idea where he is or where he’s gone to - hence the need for exchange to be immediate and roughly equivalent (barter). What you’re describing is known as a ‘reciprocity’ or a ‘gift economy’, depending on the exact details of the society in question.
These IOUs get formalized into quantifiable valued you can write down and that’s fiat money.
Not quite. When you start talking about quantifiable values, you start talking about units of value, which are less important in reciprocal or gift economies. When quantifiable debt is being discussed, you start heading into early market economies.
Fiat currency is money that’s given its purchasing power by the central government or by its use as a common (though pointless) medium of exchange - or both, depending on who you talk to.
Not this myth again. Barter exists and was widespread. It exists alongside exchange of units of value in societies where the money supply in insufficient (often pre-modern) or when the currency is unreliable or volatile (often modern).
Ok, it exists but it wasn’t the predecessor of money. It’s not that the “double coincidence of needs” or what it is called made money a necessity. That’s my point and I worded it poorly, sorry for that.
It’s alright. I just see people argue that barter DIDN’T exist as a widespread pre-modern phenomenon. I get touchy about that, lol
Barter is just no longer regarded as a predecessor (in any meaningful sense, at least) to units of value. Low standardization of currency, poor supply, lack of central authority, all of these (unavoidable, in the pre-modern era) things make barter an integral, and sometimes larger than currency, part of pre-modern market economies, especially in terms of consumer exchange. Units of value end up taking the ‘small change’ (relatively speaking) part of exchanges, or even just an expression of the values exchanged (such as “Twelve cattle worth of silver”).
And in non-market economies, barter remains an essential part of exchange with strangers. It’s just that if exchange isn’t your primary means of acquiring goods, the idea of a standardized unit of value becomes much less important - or even pointless (“If currency fluctuates in value, why would I not just keep trading goods for goods, since that would be the same thing without the added hassle of keeping something useless?”) so barter in those societies is sometimes kept without money. But in societies where mutual exchange is the main means of acquiring goods? Units of value are always there. Exchange must have existed before units of value - but it only becomes practical on a large scale when you have a consistent (or at least SOMEWHAT consistent) unit of value to measure things by.
Here’s twelve beaver pelts’ worth of rum for listening to my rant.
While this is true, exchange with strangers isn’t the primary means of exchange in many societies. You can give your neighbor shoes they need to work on the fields and they own you one, later in fall they give it back in potatoes they harvest. No need to have a sack of potatoes in the moment you need new shoes. These IOUs get formalized into quantifiable valued you can write down and that’s fiat money.
Neighbors aren’t strangers. When I say strangers I mean like “Person you have never seen before passing through”. There’s an issue with that called ‘moral hazard’ - when it’s your literal neighbor, if he wrongs you, you have forms of recourse. You literally know where he lives. If a stranger wrongs you, you have no idea where he is or where he’s gone to - hence the need for exchange to be immediate and roughly equivalent (barter). What you’re describing is known as a ‘reciprocity’ or a ‘gift economy’, depending on the exact details of the society in question.
Not quite. When you start talking about quantifiable values, you start talking about units of value, which are less important in reciprocal or gift economies. When quantifiable debt is being discussed, you start heading into early market economies.
Fiat currency is money that’s given its purchasing power by the central government or by its use as a common (though pointless) medium of exchange - or both, depending on who you talk to.
Which was my point. Why focus on exchange with strangers when most people you interact with aren’t strangers?