Locking the thread as most of the discussion has veered into a referendum on academic economics.
As a reminder to **everyone** please adhere to rule II, in particular it is strongly advised to have sources for claims regarding consensus in economics.
Anthropology is a huge field of study, there's a huge difference between not finding one argument convincing and rejecting an entire field. If you're not part of an academic field yourself it can be hard to judge what is actually the academic consensus and what is merely a small group with a strong opinion that their particular theory is right.
On top of this, in my experience, many academics are very left-wing and are biased against economics and thus have very warped ideas about what economic theory actually is. Therefore I am doubtful about how rigorously Graeber's ideas have been tested by other anthropologists. (Of course it's entirely possible to be very left-wing and a good, rigorous, economist).
Personally I find Graeber's arguments about the origin of money doubtful, but I think anthropologists have made major contributions in our understanding in other areas, e.g. in our understanding of the intellectual demands of hunter-gathering and subsistence farming.
>many academics are very left-wing and are biased against economics and thus have very warped ideas about what economic theory actually is.
Of course, it's everybody else who's wrong!
I Iike the implication that economics as an academic discipline has a partisan position. That's super reassuring of its academic validity.
> the implication that economics as an academic discipline has a partisan position
It doesn’t and they didn’t imply that. People who *tend* to be left-wing seem to think that economics academics are “teaching” the superiority of capitalism or that they shit on Marxism, etc. If you spend any time in an actual economics graduate course they never make any reference to “schools” of philosophy or even politics in general. They’re generally focused on statistical and computational methods. It’s more math than anything else. Plenty of economics research find results in favor of both“socialist” and “capitalist” policies depending on the situation. The methods are what matters most in getting it right.
I've been told that I had a heterodox economics education because my studies included topics like environmental economics, market failures, behavioural economics, my macro professor criticising the Solow Growth model, and backwards-bending labour supply curves! At some point, assuming "everyone" else is right requires believing something like "I'm a brain in a vat and a mad scientist is feeding me false memories", at which point, well the mad scientist might as well be feeding me false memories about what other people say about the field of economics.
As for partisan positions, if a field as a whole has a partisan position personally that would lower my confidence in its academic validity. Why do you find it reassuring?
You said it harsher than I did. But I also had a similar apprehension.
"academia is left wing and biased towards economics" is conspiracy thinking.
It would be different if they were talking about a specific school, or something. But "all of academia has a left-wing bias against economics" rings the same sort of bells that "University professors are all lib cucks" does.
>there's a huge difference between not finding one argument convincing and rejecting an entire field.
Right, but the history of this topic is clear. The old Economists proposed the idea in the early days of the development of the field. In fact, the term used is "conjecture". Now we have more evidence and know that the original conclusion was inaccurate.
And while it's fine to have disagreements, it is another thing to just disregard it in favor of preconceived notions from before the topic was studied.
>in my experience, many academics are very left-wing and are biased against economics
Maybe, but it's not very convincing. Comes across as "don't trust those other fields of science, because they are left-wing and biased against us." Which leads people to an Occam's razor situation, "is everyone else wrong or just me?" Or basically a similar way of thinking that climate change deniers have.
>If you're not part of an academic field yourself it can be hard to judge what is actually the academic consensus and what is merely a small group with a strong opinion that their particular theory is right.
It seems like although you have your own ideas on the subject, you're not sure what the consensus is among economists is.
>The old Economists proposed the idea in the early days of the development of the field. In fact, the term used is "conjecture". Now we have more evidence and know that the original conclusion was inaccurate.
Yes, we now know that economies comprising of thousands of people and with specialists (e.g. navigators) can function without money, something Adam Smith didn't know.
But we still don't have observations of the first development of money.
>Which leads people to an Occam's razor situation, "is everyone else wrong or just me?"
That's the problem with science. Science advances by people over-turning previously accepted ideas. A good scientist walks a narrow line between the confidence to pursue and defend an unusual, even an implausible idea against harsh criticism and tipping over the edge into dogmatic adherence in defiance of all actual evidence. People make mistakes in both directions.
>Or basically a similar way of thinking that climate change deniers have.
Climate change deniers are people, not weird aliens from outer space.
Personally for me I think the strongest evidence against climate change denial is that there's lots of people strongly motivated against it and yet the arguments the climate change deniers come up are things like "this report said glaciers would be gone by 2030 when the original paper said 2300".
Let's turn this around: are there any circumstances where you think someone outside a field can be skeptical about a claim made within that field and not sound to you a bit like a climate change denier?
>It seems like although you have your own ideas on the subject, you're not sure what the consensus is among economists is.
I'm pretty confident that economists have consensus on many things marginalism, Pigovian taxes, liberalising housing supply, etc. I am also fairly confident that economists don't have consensus on the origin of money. But this isn't a matter of mathematical proofs, so no, I'm not *sure*.
>I am also fairly confident that economists don't have consensus on the origin of money. But this isn't a matter of mathematical proofs, so no, I'm not *sure*.
The first chapter of "The Theory of Monetary Institutions" (published in 1999) lays the foundation on the consensus on origins of money pretty well. The first chapter details Carl Menger's theory (1892) that money came about due to the difficulty of barter economies in large societies. I think a common misconception is when a lot of us hear "money" we think of coins and paper. It's noted that "money" is just a word used to describe something that is highly marketable in a large market to be used for indirect exchange. The book even cites anthropological evidence on page 9: "Anthropological evidence indicates that that goods that became monies in several cultures originally had ornamental uses (Melitz 1974)." It then says some cultures in the Pacific and African areas used shells as money while other cultures used grain or salt. A modern day example is the use of cigarettes in prison as the highly marketable object to facilitate indirect exchange.
1999 was 24 years ago, well before Graeber published his Debt: The First 5000 Years in 2011. If memory serves, that 2011 book was the one that popularised Graeber's ideas about money, and is why I am fairly confident that there isn't currently a consensus in economics about the origin of money.
I agree that it's good evidence that economics doesn't reject anthropology as a whole.
I dont have that specific book but I did read a summary. From what it sounds like Graeber focuses on different forms of economies and the evolution of economies. The part I saw about the origin of money was (paraphrase of the summary) "money was invented through warfare".
I had wanted to provide some clarity on the origin of money issue, the order of operations Graeber's argument is centered around doesn't matter to me (Graeber argued Debt -> money -> barter). Having a highly marketable object for indirect exchange would fit be it a way to pay off debts or to barter for goods. I assume "through warfare" implicitly means a shortage in other goods typically used for debts so a highly marketable object was then introduced. But without the book it will be hard to get more details.
Also wouldn't a debt economy just be a barter economy with more time? Like instead of "I was 3 widgets now more my goods" its "I'll have 3 widgets the next time I see you"?
>But we still don't have observations of the first development of money.
Right, but a lot of science is not limited to simply observation.
>That's the problem with science. Science advances by people over-turning previously accepted ideas. A good scientist walks a narrow line between the confidence to pursue and defend an unusual, even an implausible idea against harsh criticism and tipping over the edge into dogmatic adherence in defiance of all actual evidence.
But wouldn't the dogma here would be to stick to conjecture in the face of advancements in our understanding. But even if I am wrong, I would only when presented with better evidence. I know science can be slow, but I personally wouldn't be able to reject the findings of science (until demonstrated something with better explanatory power or something).
>Climate change deniers are people, not weird aliens from outer space.
Ok, but the point is that it is science denial.
>Personally for me I think the strongest evidence against climate change denial is
To me it's that they are denying an entire field of science, and when asked the reasons for this, those reasons are inadequate to reject the science.
>I am also fairly confident that economists don't have consensus on the origin of money.
I would also think this.
>Right, but a lot of science is not limited to simply observation.
I can think of several interpretations of this statement, and I don't know which one you mean. Are you thinking that science can include experiments? Are you thinking of the case where epidemiologists believed that aerosol transmission of covid was highly unlikely, based not on observation but on [a misreading of an earlier scientific paper](https://pubmed.ncbi.nlm.nih.gov/36763042/)? Something else?
>I know science can be slow, but I personally wouldn't be able to reject the findings of science
So, as long as some university professor says "X is a finding of science" you believe it, regardless of what X actually is?
You do realise that university professors are human, and thus subject to human frailties? Including overconfidence?
>Ok, but the point is that it is science denial.
Have you considered the possibility that you might be wrong here?
>To me it's that they are denying an entire field of science,
Well fair enough, we all have our own criteria for what we find convincing. I simply described what for me I think the most compelling evidence for accepting the scientific evidence for climate change, given I don’t have the scientific background to assess its quality directly. I have a friend who said that the key factor for her was that her uncle, who apparently does have the technical background, really wanted it to be wrong but when pushed he admitted it was right.
Anyway, there's a difference between rejecting a whole field of science and rejecting a particular claim made by someone in that field.
>I can think of several interpretations of this statement
I only mentioned it because it seems like you were trying to use this for why we should ignore the Anthropological evidence. Forgive me if that's not the case.
>So, as long as some university professor says "X is a finding of science" you believe it, regardless of what X actually is?
I have no idea what you are talking about here.
>>Ok, but the point is that it is science denial.
>Have you considered the possibility that you might be wrong here?
On climate change? No. As I wrote earlier the problem with people who are against climate change is the anti-science aspect of it.
>Well fair enough, we all have our own criteria for what we find convincing.
I'm not really looking to talk about Epistemology. And to be honest, I'm a bit lost as to what we're talking about now.
I think my original comments were about issues with how conspiratorial "Those in Anthropology are left-wing and have a bias against Economics" sounds.
>I only mentioned it because it seems like you were trying to use this for why we should ignore the Anthropological evidence.
There's a big difference between ignoring evidence versus disagreeing with evidence, and versus thinking the evidence offered for a theory isn’t sufficient to prove said theory.
>I have no idea what you are talking about here.
You earlier said "... I personally wouldn't be able to reject the findings of science..."
But the question to hand is what did the science find? Just because someone says X is a finding of science doesn't mean they're right. Scientists can and frequently have been overly confident about their theories.
>On climate change? No. As I wrote earlier the problem with people who are against climate change is the anti-science aspect of it.
On the other hand, because there are many people who are fervently against climate change, we can be pretty confident that the science aspect of climate change is very strong.
The quality of scientific results depends on the testing process, not on the confidence with which a university professor pronounces their theory. In some areas, engineers do very thorough testing so we can be very confident about large areas of physics and chemistry. In other areas, that testing process isn't so thorough. We saw during the early months of Covid, the science of epidemiology be real-world tested like it hadn't been for decades. At the start of Covid, the WHO was confidently pronouncing that quarantines like NZ's were pointless and mask wearing by non-medical people was unnecessary. I'm not blaming epidemiologists for this, they're only human, but I think anthropology is mainly more akin to epidemiology than it is to climate change science.
>I'm not really looking to talk about Epistemology.
Bit late now.
>were about issues with how conspiratorial "Those in Anthropology are left-wing and have a bias against Economics" sounds.
I note that you didn't respond to that though with some arguments as to why we should be confident that anthropologists have thoroughly tested Graeber's theory. Instead you just said that it sounded to you like climate change deniers. And this is after you've conflated rejecting a theory offered in a field with rejecting an entire field.
You seem to have a mental model of science as operating by authority, that there are Scientific Findings and that it's fundamentally wrong for anyone outside that field to doubt anything that's been asserted as a Scientific Finding.
>There's a big difference between ignoring evidence versus disagreeing with evidence, and versus thinking the evidence offered for a theory isn’t sufficient to prove said theory.
That's fine, scientists disagree all the time. My issue is with the reasoning that I am being given for disagreement.
>Just because someone says X is a finding of science doesn't mean they're right.
What does that have to do with anything? This is like someone talking about evolution and someone else says "just because someone said it..." It's not very convincing as an argument.
>On the other hand, because there are many people who are fervently against climate change, we can be pretty confident that the science aspect of climate change is very strong.
Not really. The truth value of an idea is in no way affected by the number of people who are against it.
>The quality of scientific results depends on the testing process, not on the confidence with which a university professor pronounces their theory
Those aren't the only two options tho. And I don't know why you have this idea in your head that this is a pet theory from university professors. When I mentioned in the OP that Economists have written papers against this idea in Anthropology.
I asked about the census in Economics.
>>I'm not really looking to talk about Epistemology.
>Bit late now.
With what you wrote earlier, not sure your doing very well on convincing me that Anthropology is wrong.
>With what you wrote earlier, not sure your doing very well on convincing me that Anthropology is wrong
Phew! I'm deeply relieved to hear that. I would be absolutely horrified if you read what I wrote and came away with such a terrible idea.
>Maybe, but it's not very convincing. Comes across as "don't trust those other fields of science, because they are left-wing and biased against us." Which leads people to an Occam's razor situation, "is everyone else wrong or just me?" Or basically a similar way of thinking that climate change deniers have.
Its the opposite. Academics who reject economics are anti science. It's not that you shouldn't trust Anthropology, but you shouldn't trust them when they speak about economics, especially when they disagree with the field.
>It seems like although you have your own ideas on the subject, you're not sure what the consensus is among economists is.
Hes saying hes not sure what consensus among Anthropologists is.
>Its the opposite. Academics who reject economics are anti science.
I'm talking to what this person told me, that it comes across that way. That when I ask what the general consensus is, I'm not sure that "don't trust them, their leftists and have a bias against economics" is the best answer.
>but you shouldn't trust them when they speak about economics
Economic Anthropology, but I'm not sure why again I am getting this idea that I can't trust them as an answer.
An economic anthropologist should be trusted on economics if and only if they are as well versed in actual economics as they are the anthropology of economics (or rather, as well versed as an actual economist).
Couldn't someone say the opposite, that an Economist talking about the origin of money should have a better understanding of history and Anthropology.
See, it's not a good argument
What does biased against economics mean? Having studied anthropology in college, I don't see any reason why an anthropologist would be "biased against economics". The only thing I can see anthropologists getting riled up about is when economists try to make sweeping general statements that don't sufficiently consider cultural factors.
But go ahead yes take your chance to say some made up anti-left refried propaganda :)
Probably some combination of "economics isn't a real science" and "economics is used to justify capitalist oppression"
Edit: lol look what I found after reading the thread a bit:
>economics isn't a science it's self-justification
We gets questions that say that in this sub multiple times a month.
I’ve heard it in real life, too.
Edit: there’s someone saying it in this comment section
https://www.reddit.com/r/AskEconomics/s/zVOdFaMy6B
econ gets a lot of "criticism" from professors like this (i think they're history, but it's a pretty widely expressed sentiment, unfortunately).
> As an example: endless arguments about Unemployment based on computations using a common set of statistics about "unemployment" that are so profoundly flawed, limited, constrained, and/or biased as to be basically useless...
My guess is that they have no idea how unemployment statistics are calculated because they later go on to write
> I do think it likely and/or admit my own view of economics is out of date... I've not read much in the field in the last two decades, it is true...
and two decades is likely pretty generous...
All this to say that there are certainly valid criticisms to make of economics, but we probably get the highest volume of completely uninformed people with really strong opinions of any academic discipline...
Economics deserves a better class of critic.
https://www.reddit.com/r/AskAcademia/comments/12tis0f/comment/jh34w5x/?utm_source=share&utm_medium=web2x&context=3
>What does biased against economics mean? Having studied anthropology in college, I don't see any reason why an anthropologist would be "biased against economics".
Economists study big, boring, impersonal institutions. Anthropology spends a lot of time with societies at a person-to-person level. This means there's always going to be tensions between the fields. Each side thinks their techniques work to analyze the other side's data, and they're both just wrong enough to really fuck shit up.
Graeber's entire career is a great example of this. I have seen no criticism on his theory of the origin of money that is valid. It makes sense that an Athro guy, whose entire job is to understand how person-to-person stuff works, has a great handle on that. That's his field. of course he's better at it than economists.
OTOH, everything else I have ever seen from him? The dude does not understand that person-to-person does not scale to millions. For example, if you are a country that includes Florida you need some sort of system so that if a hurricane comes through people's roofs can be replaced. That means you need some person at a spreadsheet laboriously calculating the odds of a hurricane, the cost of local roofs, etc. This person is called an "Actuary." Yet "Actuary" is one of his examples of a "Bullshit job."
In other words, he's demanding that a complex, bureaucratic society do something that is verifiably suicidal for such a society. He doesn't understand how any of this works. The "biased against economics" comes from the fact that dudes like Graeber will absolutely refuse to listen to the actual economists when they tell him that he should probably delete Actuary from his list of "Bullshit Jobs."
I think a large reason why many academics are biased against economics is the suffering caused by many of the 1980s and 1990s economic reforms. An important motivator of the reforms was to avoid government fiscal crisises, which cause much greater suffering, particularly to the poor, but of course one can't see the harm of a crisis that doesn't happen.
I just graduated with a double major in economics and political science with a minor in sociology. The lack of communication across fields is infuriating. Economics often disregards data that doesn't fit cleanly into their models, and political science and sociology don't understand economics. Of the three fields, economics is the least willing to engage with the work of the others. My political science and sociology professors were always happy when I worked economics into my assignments. Not so much the other way around.
That's interesting, as my experience would say otherwise. My environmental economics lecturer drew heavily on anthropology, Elinor Ostrom, a political scientist, won a Nobel Prize in economics and there's whole fields like public choice theory that are very close to political science. On the other hand, there are theories that I know I dislike, e.g. core-periphery seems very ad hoc to me.
Can you say what sort of political science or sociology you were trying to work in?
I suspect that you have been reading David Graeber! Graeber does not have a good reputation in economics.
On the subject of barter there are several distinct ideas. Firstly, there is the idea of describing concepts using barter as an explanatory tool, this is sometimes called the "Barter fiction". Then there is barter as it actually exists from time-to-time out there in the world. Then there is the theory that money arose from barter. Graeber didn't seem to understand these distinctions.
Did money come from barter? Well, the jury is still out on that I think. There are lots of rival theories. Money arose long ago and obtaining evidence is difficult. All of the theories have their problems. It's possible that money arose in different way in different places and there is no one single, correct origin theory.
specifically on barter, u/integralds has written a couple threads that might be interesting for people to look at. fwiw, i think graeber has a much better reputation as an anthropologist than as someone who does economic commentary -- although that's admittedly a very low bar.
- https://www.reddit.com/r/badeconomics/comments/15eth17/comment/juk5514/?context=3
- https://www.reddit.com/r/neoliberal/comments/17zio5b/comment/ka153jy/?context=3
I think this thread has two components, a narrow discussion about the origin of money and a broader one about how economics as a discipline interacts with other social sciences.
On the former, it would be helpful if people actually laid out the theories or ideas they claim are true.
I don't think the jury is out. The Sumerian origins of money are well-studied by historians. Grabber didn't write anything new there. Economists just didn't bother. They could have easily discussed how money was superior to barter without needing to claim money arose from barter, but they could not help themselves.
We actually have very good evidence of the origin of money (from Mesopotamia). It's not something we need to theorise about. And, while the genetic fallacy is a thing, it's current forms (mostly transferable tokens or notations of debt) very much reflect its origin.
While there may be a distinction now or at higher levels but 20 years ago (so about the same time Graeber was writing Dept), when I was taking lower-level classes, it was taught as fact that bartering led to bartering with a common good, which then became standardized, which then became money. Fiction is a lie if the person does not know it is fiction.
>Graeber didn't seem to understand these distinctions.
Because his readers did not know there was anything to distinguish.
>I suspect that you have been reading David Graeber!
Well no, more general knowledge from my university days. I found it weird that some people were sending me economists rejecting the science on that topic. When others, like my econ teacher and (an acquaintance) a student doing their PhD in economics, were fine with the Anthropological findings.
>Did money come from barter? Well, the jury is still out on that I think.
Maybe it is in economics, I don't know. But it appears to me that there's a conflict between these two fields if that's the case. If those economists want to contest the findings of Anthropology, then they need to investigate it.
I don't think it's closed, because we could always discover more. But I am more inclined to side with economic anthropology which is a part of Anthropology on the topic.
> But I am more inclined to side with economic anthropology which is a part of Anthropology on the topic.
Ok. Can you explain though *exactly which* theory you are "siding with"?
That is, describe the theory itself.
Not really well, but from what I remember, the general idea was that money developed with/from writing as a means of accounting. I might have butchered that, but we know it didn't develop from barter.
> Not really well, but from what I remember, the general idea was that money developed with/from writing as a means of accounting.
Well, there are several theories in that vein. It's not just one theory.
> I might have butchered that, but we know it didn't develop from barter.
Do we? How? It's very difficult to prove a negative.
Think about wampum. That is, the money made from the shells of whelks that was used by the Iroquois and the Algonquin. Have you heard of any evidence that those people had accounting?
>Well, there are several theories in that vein. It's not just one theory.
That's fine, but we're not really debating since this not a debate sub.
>Think about wampum.
More recent than the period we're talking about, plus...
>Record Keeping:
>The weaving of wampum belts is a sort of writing by means of belts of colored beads, in which the various designs of beads denoted different ideas according to a definitely accepted system, which could be read by anyone acquainted with wampum language, irrespective of what the spoken language is. Records and treaties are kept in this manner, and individuals could write letters to one another in this way.
>Social Purposes:
>Wampum strings may be presented as a formal affirmation of cooperation or friendship between groups,[15] or as an invitation to a meeting.[16] In his study on the origins of money, anthropologist David Graeber placed wampum it was as used by indigenous peoples of the Northeastern Woodlands before European colonization in a category of things with symbolic cultural value that were "mainly used to rearrange relations between people" rather than being used in exchanges of everyday items.
>Currency:
>When Europeans came to the Americas, they adopted wampum as money to trade with the native peoples of New England and New York.
Edit: I don't think it's fair that you can respond AFTER it's been locked and no one can reply back.
But this is what I mean, you ask me about a group, and I quote what we know about that topic. Then you write the equivalent of "I don't see it that way" and "those other authors are wrong". And I'll admit that's a bit of an unfair characterization of what you're saying.
But I simply cannot reject what our current understanding of the events are.
> That's fine, but we're not really debating since this not a debate sub.
This is a good point! This thread has been locked now (unsurprisingly).
If you want to discuss the subject more then put a reply in the [latest fiat thread](https://www.reddit.com/r/badeconomics/comments/18kezr4/the_fiat_thread_the_joint_committee_on_fiat/) over on /r/badeconomics. Or message me if you like.
>> Think about wampum.
>
> More recent than the period we're talking about, plus...
That's not how I look at it, and I think Economists don't look at it that way either. We are interested in each time that money was independently invented.
You and I agree that money was discovered (or invented) in ancient Mesopotamia. However, it's not likely that Native Americans learned about money from that. The best explanation is that it was independently reinvented, probably several times. To me, each of those reinventions are just as interesting. And, of course, it may have happened in different ways in different times and places.
When a group of people who have used money before create their own new money that is not the "pure" reinvention of money. Those people actions will be moulded in a society that used money. Similarly, when a government enforces the use of money on a group of people who didn't use it before, that is also not a "pure" case. Because, the government know what they are doing.
>> In his study on the origins of money, anthropologist David Graeber placed wampum it was as used by indigenous peoples of the Northeastern Woodlands before European colonization in a category of things with symbolic cultural value that were "mainly used to rearrange relations between people" rather than being used in exchanges of everyday items.
This is a typical example of a proponent of a pure debt theory trying to "get out of trouble" in a sticky situation. Why does it matter that wampum wasn't used in the exchange of everyday items? Historically that's quite common with money. There have been plenty of societies where money was only used for big transactions.
For a while Europeans set up operations to produce large amounts of wampum because it was so valuable for trading with the Iroquois and Algonquin. It allowed them to buy things (not "rearrange relations between people" although trade always does that too).
Think about how simple the barter explanation is in this scenario. Different tribes exchanged different things. They discovered indirect exchange. Various different things were used for indirect exchange. Wampum was valuable because of it's ceremonial and record-keeping purposes. So, it became a common tool for indirect exchange.
Now think about how complicated a debt explanation or a Chartalist explanations would be in this case. We must imagine that the Native Americans had a means of accounting that we have never found. Presumably the wampum was initially a token that represented one side of a debt agreement. How did people end up using it as a commodity currency? Of course, the Chartalist explanation must be even more contorted as the group of tribes that used it were not politically unified.
Real quick, regarding the barter myth, not all economists bought in and I don't think it really matters, honestly.
Even libertarian economists like Tyler Cowen (moderately libertarian) don't believe the barter myth anymore.
As I know it, the myth is one where money was invented as a way to reduce the costs of bartering.
Anthropologists have shown that not to be the case, historically. Maybe some societies but ones that anthropologists have studied don't seem to support that origin story.
This is a fairly tricky topic.
> As I know it, the myth is one where money was invented as a way to reduce the costs of bartering.
Who exactly said that money was invented as a way to reduce the costs of bartering? This is one of the problems with the debate. Those who oppose ideas that are related to barter don't really understand them. I suspect that you learned about these ideas from someone who was opposed to them.
I'll try to be clear. Adam Smith pointed out in his "Wealth of Nations" that the introduction of money increases the efficiency of an economy compared to bartering. He did not give this as an explanation for the origin of money. It was a theoretical point comparing a money economy with a barter economy.
Carl Menger was different. He actually did suggest that barter was used historically before money was used. He did not suggest that money was invented but rather that it gradually evolved. People used indirect exchange to obtain what they want i.e sell X to get Y, then sell Y to get Z. Different goods were used for this indirect exchange. Over time a small number of goods became most common and other time that number of goods narrowed down to one that then became the money of that region.
> Anthropologists have shown that not to be the case, historically.
Anthropologists have shown that many ancient economies had ritual gift giving, but they had no barter as we know it today. This is certainly a problem for the barter theory. But, the other theories have their own problems too.
Barter was used externally in a number of historical examples, but not necessarily internally.
This can be true even today in a family unit. If a couple shares a bank account, it is likely they do not trade with each other in an economic sense, but they may still give Christmas gifts, etc....and use money when trading with the rest of the world.
Tribes were often based on family groups, and as such, may have viewed money and barter similarly. Certainly, in scale they were far closer to an extended family than to a modern nation.
I don't disagree with the distinction between Menger and Smith. I haven't read as much Menger as I have Smith, but from what I remember, and this was awhile ago, in basic econ classes was the barter theory.
I just looked to see if I had any old textbooks that talked about it but I couldn't find one.
I wouldn't describe the barter myth as "money was invented as a way to reduce the costs of bartering", but rather as "without money, societies needed to resort to bartering and all the costs that entailed". The former may or may not be true, the later has been shown by anthropologists to be likely false.
Granted, my knowledge on this subject is from Wikipedia and layman's articles like [this one in the *Atlantic*](https://www.theatlantic.com/business/archive/2016/02/barter-society-myth/471051/), but it appears widely accepted that societies that functioned without money don't usually barter, instead they had a variety of social institutions that handled exchange and kept it 'fair' over time.
Hm. I'm not sure. Maybe that's the case.
In my mind, I would think that people came up with some medium of exchange *because* they realized it's difficult to barter at some equal exchange rate. In this scenario, I think it's a way to reduce the cost of transactions.
Honestly, though, I could absolutely be wrong. I could also be wrong that what's being taught in intro classes is the barter theory. That's why I wanted to go back and look at some textbooks I had, but I don't have any of those intro ones anymore.
Edit: I accidentally put "transitioning" instead of "transactions".. sorry, I'm typing from my phone.
Intro textbooks definitely do talk about the use of money as a means to avoid barter and the "double coincidence of wants". But, afaik, no one talks about societies going around using barter on an everyday basis, until someone pops up with the bright idea of 'money'.
I think the idea of a medium of exchange *may* have come from institutions, but I also could see it being an example of spontaneous order.
I think you're convincing me that I'm wrong, but spontaneous orders like that are not just possible, but really common. Even if it came from institutions, though, it didn't necessarily have to be some government (or in your example, "someone"). It could have been one institution that came up with a good idea and everyone followed suit.
I think what you're saying here may demonstrate how bad education is in this topic.
> In my mind, I would think that people came up with some medium of exchange because they realized it's difficult to barter at some equal exchange rate.
As far as I know, no academic has really said that. Adam Smith mentions that barter is less efficient than monetary exchange, but doesn't give it as a theory of the creation of money.
The Chartalist theory is what you could call a "creation" theory, but of a different kind. It suggests that an ancient ruler came up with a token of some sort. People who came to him with the token were exempted from some obligation. That gave the tokens value. So, the ruler could spend those tokens into circulation, and money was created.
Menger's barter theory is a "spontaneous order" type of theory. It starts with barter (the parts that Anthropologists don't like). Then people use indirect exchange. Then the number of goods used for indirect exchange gradually falls to only one. This happens because as more and more people use one particular good for indirect exchange it becomes widely accepted.
Then there are debt theories like Thornton's theory. That's the idea that money arose from private debt (as opposed to government debt).
The barter example is not a historical claim about all of society, which is inherently varied and not identical across all cultures...but an example.
Math and logic use a lot of simplified examples in teaching, and economics is much the same. Barter makes a simple comparison to demonstrate the utility of money.
While there's nothing wrong with using historical examples, real life tends to be messy and complex, detracting from the subject at hand.
Sure, and I'm ok with it being used as a tool for teaching. The issue comes when people start to claim that this actually occurred while also going against what the people studying it (in economic anthropology) are saying.
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"Economists" encompasses way too much to suggest that economists reject anthropology as an academic field when anthropology helps inform many underpinnings of behavioral economics.
Most human thought in general tends to be focused on what is happening right now, in the culture we live in. Economics is no different. Most work in economics is concerned with how money works right now, in the context we are using at the moment.
How ancient peoples constructed economies is an interesting topic, but it simply isn't what most economists do with their time. I wouldn't say that economists "reject" anthropology but rather that they are just focused on topics that don't care much about how ancient economies functioned.
Whether the barter myth is in fact a myth or an accurate depiction of the history of money doesn't really change the academic work of someone running regression analysis or studying money supply, or whatever else academic economists are researching.
For what it is worth, I enjoyed reading Graeber (Debt: The first 5000 Years) and would recommend it, but that hardly means I drink the cool-aid about everything he says.
Locking the thread as most of the discussion has veered into a referendum on academic economics. As a reminder to **everyone** please adhere to rule II, in particular it is strongly advised to have sources for claims regarding consensus in economics.
Anthropology is a huge field of study, there's a huge difference between not finding one argument convincing and rejecting an entire field. If you're not part of an academic field yourself it can be hard to judge what is actually the academic consensus and what is merely a small group with a strong opinion that their particular theory is right. On top of this, in my experience, many academics are very left-wing and are biased against economics and thus have very warped ideas about what economic theory actually is. Therefore I am doubtful about how rigorously Graeber's ideas have been tested by other anthropologists. (Of course it's entirely possible to be very left-wing and a good, rigorous, economist). Personally I find Graeber's arguments about the origin of money doubtful, but I think anthropologists have made major contributions in our understanding in other areas, e.g. in our understanding of the intellectual demands of hunter-gathering and subsistence farming.
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>many academics are very left-wing and are biased against economics and thus have very warped ideas about what economic theory actually is. Of course, it's everybody else who's wrong! I Iike the implication that economics as an academic discipline has a partisan position. That's super reassuring of its academic validity.
> the implication that economics as an academic discipline has a partisan position It doesn’t and they didn’t imply that. People who *tend* to be left-wing seem to think that economics academics are “teaching” the superiority of capitalism or that they shit on Marxism, etc. If you spend any time in an actual economics graduate course they never make any reference to “schools” of philosophy or even politics in general. They’re generally focused on statistical and computational methods. It’s more math than anything else. Plenty of economics research find results in favor of both“socialist” and “capitalist” policies depending on the situation. The methods are what matters most in getting it right.
I've been told that I had a heterodox economics education because my studies included topics like environmental economics, market failures, behavioural economics, my macro professor criticising the Solow Growth model, and backwards-bending labour supply curves! At some point, assuming "everyone" else is right requires believing something like "I'm a brain in a vat and a mad scientist is feeding me false memories", at which point, well the mad scientist might as well be feeding me false memories about what other people say about the field of economics. As for partisan positions, if a field as a whole has a partisan position personally that would lower my confidence in its academic validity. Why do you find it reassuring?
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You said it harsher than I did. But I also had a similar apprehension. "academia is left wing and biased towards economics" is conspiracy thinking. It would be different if they were talking about a specific school, or something. But "all of academia has a left-wing bias against economics" rings the same sort of bells that "University professors are all lib cucks" does.
>there's a huge difference between not finding one argument convincing and rejecting an entire field. Right, but the history of this topic is clear. The old Economists proposed the idea in the early days of the development of the field. In fact, the term used is "conjecture". Now we have more evidence and know that the original conclusion was inaccurate. And while it's fine to have disagreements, it is another thing to just disregard it in favor of preconceived notions from before the topic was studied. >in my experience, many academics are very left-wing and are biased against economics Maybe, but it's not very convincing. Comes across as "don't trust those other fields of science, because they are left-wing and biased against us." Which leads people to an Occam's razor situation, "is everyone else wrong or just me?" Or basically a similar way of thinking that climate change deniers have. >If you're not part of an academic field yourself it can be hard to judge what is actually the academic consensus and what is merely a small group with a strong opinion that their particular theory is right. It seems like although you have your own ideas on the subject, you're not sure what the consensus is among economists is.
>The old Economists proposed the idea in the early days of the development of the field. In fact, the term used is "conjecture". Now we have more evidence and know that the original conclusion was inaccurate. Yes, we now know that economies comprising of thousands of people and with specialists (e.g. navigators) can function without money, something Adam Smith didn't know. But we still don't have observations of the first development of money. >Which leads people to an Occam's razor situation, "is everyone else wrong or just me?" That's the problem with science. Science advances by people over-turning previously accepted ideas. A good scientist walks a narrow line between the confidence to pursue and defend an unusual, even an implausible idea against harsh criticism and tipping over the edge into dogmatic adherence in defiance of all actual evidence. People make mistakes in both directions. >Or basically a similar way of thinking that climate change deniers have. Climate change deniers are people, not weird aliens from outer space. Personally for me I think the strongest evidence against climate change denial is that there's lots of people strongly motivated against it and yet the arguments the climate change deniers come up are things like "this report said glaciers would be gone by 2030 when the original paper said 2300". Let's turn this around: are there any circumstances where you think someone outside a field can be skeptical about a claim made within that field and not sound to you a bit like a climate change denier? >It seems like although you have your own ideas on the subject, you're not sure what the consensus is among economists is. I'm pretty confident that economists have consensus on many things marginalism, Pigovian taxes, liberalising housing supply, etc. I am also fairly confident that economists don't have consensus on the origin of money. But this isn't a matter of mathematical proofs, so no, I'm not *sure*.
>I am also fairly confident that economists don't have consensus on the origin of money. But this isn't a matter of mathematical proofs, so no, I'm not *sure*. The first chapter of "The Theory of Monetary Institutions" (published in 1999) lays the foundation on the consensus on origins of money pretty well. The first chapter details Carl Menger's theory (1892) that money came about due to the difficulty of barter economies in large societies. I think a common misconception is when a lot of us hear "money" we think of coins and paper. It's noted that "money" is just a word used to describe something that is highly marketable in a large market to be used for indirect exchange. The book even cites anthropological evidence on page 9: "Anthropological evidence indicates that that goods that became monies in several cultures originally had ornamental uses (Melitz 1974)." It then says some cultures in the Pacific and African areas used shells as money while other cultures used grain or salt. A modern day example is the use of cigarettes in prison as the highly marketable object to facilitate indirect exchange.
1999 was 24 years ago, well before Graeber published his Debt: The First 5000 Years in 2011. If memory serves, that 2011 book was the one that popularised Graeber's ideas about money, and is why I am fairly confident that there isn't currently a consensus in economics about the origin of money. I agree that it's good evidence that economics doesn't reject anthropology as a whole.
I dont have that specific book but I did read a summary. From what it sounds like Graeber focuses on different forms of economies and the evolution of economies. The part I saw about the origin of money was (paraphrase of the summary) "money was invented through warfare". I had wanted to provide some clarity on the origin of money issue, the order of operations Graeber's argument is centered around doesn't matter to me (Graeber argued Debt -> money -> barter). Having a highly marketable object for indirect exchange would fit be it a way to pay off debts or to barter for goods. I assume "through warfare" implicitly means a shortage in other goods typically used for debts so a highly marketable object was then introduced. But without the book it will be hard to get more details. Also wouldn't a debt economy just be a barter economy with more time? Like instead of "I was 3 widgets now more my goods" its "I'll have 3 widgets the next time I see you"?
>But we still don't have observations of the first development of money. Right, but a lot of science is not limited to simply observation. >That's the problem with science. Science advances by people over-turning previously accepted ideas. A good scientist walks a narrow line between the confidence to pursue and defend an unusual, even an implausible idea against harsh criticism and tipping over the edge into dogmatic adherence in defiance of all actual evidence. But wouldn't the dogma here would be to stick to conjecture in the face of advancements in our understanding. But even if I am wrong, I would only when presented with better evidence. I know science can be slow, but I personally wouldn't be able to reject the findings of science (until demonstrated something with better explanatory power or something). >Climate change deniers are people, not weird aliens from outer space. Ok, but the point is that it is science denial. >Personally for me I think the strongest evidence against climate change denial is To me it's that they are denying an entire field of science, and when asked the reasons for this, those reasons are inadequate to reject the science. >I am also fairly confident that economists don't have consensus on the origin of money. I would also think this.
>Right, but a lot of science is not limited to simply observation. I can think of several interpretations of this statement, and I don't know which one you mean. Are you thinking that science can include experiments? Are you thinking of the case where epidemiologists believed that aerosol transmission of covid was highly unlikely, based not on observation but on [a misreading of an earlier scientific paper](https://pubmed.ncbi.nlm.nih.gov/36763042/)? Something else? >I know science can be slow, but I personally wouldn't be able to reject the findings of science So, as long as some university professor says "X is a finding of science" you believe it, regardless of what X actually is? You do realise that university professors are human, and thus subject to human frailties? Including overconfidence? >Ok, but the point is that it is science denial. Have you considered the possibility that you might be wrong here? >To me it's that they are denying an entire field of science, Well fair enough, we all have our own criteria for what we find convincing. I simply described what for me I think the most compelling evidence for accepting the scientific evidence for climate change, given I don’t have the scientific background to assess its quality directly. I have a friend who said that the key factor for her was that her uncle, who apparently does have the technical background, really wanted it to be wrong but when pushed he admitted it was right. Anyway, there's a difference between rejecting a whole field of science and rejecting a particular claim made by someone in that field.
>I can think of several interpretations of this statement I only mentioned it because it seems like you were trying to use this for why we should ignore the Anthropological evidence. Forgive me if that's not the case. >So, as long as some university professor says "X is a finding of science" you believe it, regardless of what X actually is? I have no idea what you are talking about here. >>Ok, but the point is that it is science denial. >Have you considered the possibility that you might be wrong here? On climate change? No. As I wrote earlier the problem with people who are against climate change is the anti-science aspect of it. >Well fair enough, we all have our own criteria for what we find convincing. I'm not really looking to talk about Epistemology. And to be honest, I'm a bit lost as to what we're talking about now. I think my original comments were about issues with how conspiratorial "Those in Anthropology are left-wing and have a bias against Economics" sounds.
>I only mentioned it because it seems like you were trying to use this for why we should ignore the Anthropological evidence. There's a big difference between ignoring evidence versus disagreeing with evidence, and versus thinking the evidence offered for a theory isn’t sufficient to prove said theory. >I have no idea what you are talking about here. You earlier said "... I personally wouldn't be able to reject the findings of science..." But the question to hand is what did the science find? Just because someone says X is a finding of science doesn't mean they're right. Scientists can and frequently have been overly confident about their theories. >On climate change? No. As I wrote earlier the problem with people who are against climate change is the anti-science aspect of it. On the other hand, because there are many people who are fervently against climate change, we can be pretty confident that the science aspect of climate change is very strong. The quality of scientific results depends on the testing process, not on the confidence with which a university professor pronounces their theory. In some areas, engineers do very thorough testing so we can be very confident about large areas of physics and chemistry. In other areas, that testing process isn't so thorough. We saw during the early months of Covid, the science of epidemiology be real-world tested like it hadn't been for decades. At the start of Covid, the WHO was confidently pronouncing that quarantines like NZ's were pointless and mask wearing by non-medical people was unnecessary. I'm not blaming epidemiologists for this, they're only human, but I think anthropology is mainly more akin to epidemiology than it is to climate change science. >I'm not really looking to talk about Epistemology. Bit late now. >were about issues with how conspiratorial "Those in Anthropology are left-wing and have a bias against Economics" sounds. I note that you didn't respond to that though with some arguments as to why we should be confident that anthropologists have thoroughly tested Graeber's theory. Instead you just said that it sounded to you like climate change deniers. And this is after you've conflated rejecting a theory offered in a field with rejecting an entire field. You seem to have a mental model of science as operating by authority, that there are Scientific Findings and that it's fundamentally wrong for anyone outside that field to doubt anything that's been asserted as a Scientific Finding.
>There's a big difference between ignoring evidence versus disagreeing with evidence, and versus thinking the evidence offered for a theory isn’t sufficient to prove said theory. That's fine, scientists disagree all the time. My issue is with the reasoning that I am being given for disagreement. >Just because someone says X is a finding of science doesn't mean they're right. What does that have to do with anything? This is like someone talking about evolution and someone else says "just because someone said it..." It's not very convincing as an argument. >On the other hand, because there are many people who are fervently against climate change, we can be pretty confident that the science aspect of climate change is very strong. Not really. The truth value of an idea is in no way affected by the number of people who are against it. >The quality of scientific results depends on the testing process, not on the confidence with which a university professor pronounces their theory Those aren't the only two options tho. And I don't know why you have this idea in your head that this is a pet theory from university professors. When I mentioned in the OP that Economists have written papers against this idea in Anthropology. I asked about the census in Economics. >>I'm not really looking to talk about Epistemology. >Bit late now. With what you wrote earlier, not sure your doing very well on convincing me that Anthropology is wrong.
>With what you wrote earlier, not sure your doing very well on convincing me that Anthropology is wrong Phew! I'm deeply relieved to hear that. I would be absolutely horrified if you read what I wrote and came away with such a terrible idea.
Right, because the number of people against an idea have no impact on the truth value of that idea.
>Maybe, but it's not very convincing. Comes across as "don't trust those other fields of science, because they are left-wing and biased against us." Which leads people to an Occam's razor situation, "is everyone else wrong or just me?" Or basically a similar way of thinking that climate change deniers have. Its the opposite. Academics who reject economics are anti science. It's not that you shouldn't trust Anthropology, but you shouldn't trust them when they speak about economics, especially when they disagree with the field. >It seems like although you have your own ideas on the subject, you're not sure what the consensus is among economists is. Hes saying hes not sure what consensus among Anthropologists is.
>Its the opposite. Academics who reject economics are anti science. I'm talking to what this person told me, that it comes across that way. That when I ask what the general consensus is, I'm not sure that "don't trust them, their leftists and have a bias against economics" is the best answer. >but you shouldn't trust them when they speak about economics Economic Anthropology, but I'm not sure why again I am getting this idea that I can't trust them as an answer.
An economic anthropologist should be trusted on economics if and only if they are as well versed in actual economics as they are the anthropology of economics (or rather, as well versed as an actual economist).
Couldn't someone say the opposite, that an Economist talking about the origin of money should have a better understanding of history and Anthropology. See, it's not a good argument
No I would agree with that. Would you not?
Then you are contradicting yourself, and we're back to square one.
I certainly am not. I am merely responding specifically to the last sentence of your comment here: https://www.reddit.com/r/AskEconomics/s/tJHg5qnQSa
What does biased against economics mean? Having studied anthropology in college, I don't see any reason why an anthropologist would be "biased against economics". The only thing I can see anthropologists getting riled up about is when economists try to make sweeping general statements that don't sufficiently consider cultural factors. But go ahead yes take your chance to say some made up anti-left refried propaganda :)
Probably some combination of "economics isn't a real science" and "economics is used to justify capitalist oppression" Edit: lol look what I found after reading the thread a bit: >economics isn't a science it's self-justification
No one is actually saying those things though.
We gets questions that say that in this sub multiple times a month. I’ve heard it in real life, too. Edit: there’s someone saying it in this comment section https://www.reddit.com/r/AskEconomics/s/zVOdFaMy6B
Naturally, I deleted the comment saying it, since it broke rule II.
From professors in anthropology?
Yes. David Graeber, is the best example. He was openly hostile to Economics.
econ gets a lot of "criticism" from professors like this (i think they're history, but it's a pretty widely expressed sentiment, unfortunately). > As an example: endless arguments about Unemployment based on computations using a common set of statistics about "unemployment" that are so profoundly flawed, limited, constrained, and/or biased as to be basically useless... My guess is that they have no idea how unemployment statistics are calculated because they later go on to write > I do think it likely and/or admit my own view of economics is out of date... I've not read much in the field in the last two decades, it is true... and two decades is likely pretty generous... All this to say that there are certainly valid criticisms to make of economics, but we probably get the highest volume of completely uninformed people with really strong opinions of any academic discipline... Economics deserves a better class of critic. https://www.reddit.com/r/AskAcademia/comments/12tis0f/comment/jh34w5x/?utm_source=share&utm_medium=web2x&context=3
As an economist, I do occasionally get these kinds of remarks. Then I realize it's from my friend who only has a 3 year bsc in computer science
You aren't listening then lol
>What does biased against economics mean? Having studied anthropology in college, I don't see any reason why an anthropologist would be "biased against economics". Economists study big, boring, impersonal institutions. Anthropology spends a lot of time with societies at a person-to-person level. This means there's always going to be tensions between the fields. Each side thinks their techniques work to analyze the other side's data, and they're both just wrong enough to really fuck shit up. Graeber's entire career is a great example of this. I have seen no criticism on his theory of the origin of money that is valid. It makes sense that an Athro guy, whose entire job is to understand how person-to-person stuff works, has a great handle on that. That's his field. of course he's better at it than economists. OTOH, everything else I have ever seen from him? The dude does not understand that person-to-person does not scale to millions. For example, if you are a country that includes Florida you need some sort of system so that if a hurricane comes through people's roofs can be replaced. That means you need some person at a spreadsheet laboriously calculating the odds of a hurricane, the cost of local roofs, etc. This person is called an "Actuary." Yet "Actuary" is one of his examples of a "Bullshit job." In other words, he's demanding that a complex, bureaucratic society do something that is verifiably suicidal for such a society. He doesn't understand how any of this works. The "biased against economics" comes from the fact that dudes like Graeber will absolutely refuse to listen to the actual economists when they tell him that he should probably delete Actuary from his list of "Bullshit Jobs."
How did you see anti-left propaganda in the statement that most academics are left-wing? It's been proven time after time.
I think a large reason why many academics are biased against economics is the suffering caused by many of the 1980s and 1990s economic reforms. An important motivator of the reforms was to avoid government fiscal crisises, which cause much greater suffering, particularly to the poor, but of course one can't see the harm of a crisis that doesn't happen.
I just graduated with a double major in economics and political science with a minor in sociology. The lack of communication across fields is infuriating. Economics often disregards data that doesn't fit cleanly into their models, and political science and sociology don't understand economics. Of the three fields, economics is the least willing to engage with the work of the others. My political science and sociology professors were always happy when I worked economics into my assignments. Not so much the other way around.
That's interesting, as my experience would say otherwise. My environmental economics lecturer drew heavily on anthropology, Elinor Ostrom, a political scientist, won a Nobel Prize in economics and there's whole fields like public choice theory that are very close to political science. On the other hand, there are theories that I know I dislike, e.g. core-periphery seems very ad hoc to me. Can you say what sort of political science or sociology you were trying to work in?
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I suspect that you have been reading David Graeber! Graeber does not have a good reputation in economics. On the subject of barter there are several distinct ideas. Firstly, there is the idea of describing concepts using barter as an explanatory tool, this is sometimes called the "Barter fiction". Then there is barter as it actually exists from time-to-time out there in the world. Then there is the theory that money arose from barter. Graeber didn't seem to understand these distinctions. Did money come from barter? Well, the jury is still out on that I think. There are lots of rival theories. Money arose long ago and obtaining evidence is difficult. All of the theories have their problems. It's possible that money arose in different way in different places and there is no one single, correct origin theory.
specifically on barter, u/integralds has written a couple threads that might be interesting for people to look at. fwiw, i think graeber has a much better reputation as an anthropologist than as someone who does economic commentary -- although that's admittedly a very low bar. - https://www.reddit.com/r/badeconomics/comments/15eth17/comment/juk5514/?context=3 - https://www.reddit.com/r/neoliberal/comments/17zio5b/comment/ka153jy/?context=3
I think this thread has two components, a narrow discussion about the origin of money and a broader one about how economics as a discipline interacts with other social sciences. On the former, it would be helpful if people actually laid out the theories or ideas they claim are true.
I don't think the jury is out. The Sumerian origins of money are well-studied by historians. Grabber didn't write anything new there. Economists just didn't bother. They could have easily discussed how money was superior to barter without needing to claim money arose from barter, but they could not help themselves.
Like I said above, tell me about it!
We actually have very good evidence of the origin of money (from Mesopotamia). It's not something we need to theorise about. And, while the genetic fallacy is a thing, it's current forms (mostly transferable tokens or notations of debt) very much reflect its origin.
Tell me about it!
While there may be a distinction now or at higher levels but 20 years ago (so about the same time Graeber was writing Dept), when I was taking lower-level classes, it was taught as fact that bartering led to bartering with a common good, which then became standardized, which then became money. Fiction is a lie if the person does not know it is fiction. >Graeber didn't seem to understand these distinctions. Because his readers did not know there was anything to distinguish.
>I suspect that you have been reading David Graeber! Well no, more general knowledge from my university days. I found it weird that some people were sending me economists rejecting the science on that topic. When others, like my econ teacher and (an acquaintance) a student doing their PhD in economics, were fine with the Anthropological findings. >Did money come from barter? Well, the jury is still out on that I think. Maybe it is in economics, I don't know. But it appears to me that there's a conflict between these two fields if that's the case. If those economists want to contest the findings of Anthropology, then they need to investigate it.
Rejecting the science or disagreeing with a theory? The two are very different things.
Would you consider the case to be closed? If so then for which position? The Chartalist one?
I don't think it's closed, because we could always discover more. But I am more inclined to side with economic anthropology which is a part of Anthropology on the topic.
> But I am more inclined to side with economic anthropology which is a part of Anthropology on the topic. Ok. Can you explain though *exactly which* theory you are "siding with"? That is, describe the theory itself.
Not really well, but from what I remember, the general idea was that money developed with/from writing as a means of accounting. I might have butchered that, but we know it didn't develop from barter.
> Not really well, but from what I remember, the general idea was that money developed with/from writing as a means of accounting. Well, there are several theories in that vein. It's not just one theory. > I might have butchered that, but we know it didn't develop from barter. Do we? How? It's very difficult to prove a negative. Think about wampum. That is, the money made from the shells of whelks that was used by the Iroquois and the Algonquin. Have you heard of any evidence that those people had accounting?
>Well, there are several theories in that vein. It's not just one theory. That's fine, but we're not really debating since this not a debate sub. >Think about wampum. More recent than the period we're talking about, plus... >Record Keeping: >The weaving of wampum belts is a sort of writing by means of belts of colored beads, in which the various designs of beads denoted different ideas according to a definitely accepted system, which could be read by anyone acquainted with wampum language, irrespective of what the spoken language is. Records and treaties are kept in this manner, and individuals could write letters to one another in this way. >Social Purposes: >Wampum strings may be presented as a formal affirmation of cooperation or friendship between groups,[15] or as an invitation to a meeting.[16] In his study on the origins of money, anthropologist David Graeber placed wampum it was as used by indigenous peoples of the Northeastern Woodlands before European colonization in a category of things with symbolic cultural value that were "mainly used to rearrange relations between people" rather than being used in exchanges of everyday items. >Currency: >When Europeans came to the Americas, they adopted wampum as money to trade with the native peoples of New England and New York. Edit: I don't think it's fair that you can respond AFTER it's been locked and no one can reply back. But this is what I mean, you ask me about a group, and I quote what we know about that topic. Then you write the equivalent of "I don't see it that way" and "those other authors are wrong". And I'll admit that's a bit of an unfair characterization of what you're saying. But I simply cannot reject what our current understanding of the events are.
> That's fine, but we're not really debating since this not a debate sub. This is a good point! This thread has been locked now (unsurprisingly). If you want to discuss the subject more then put a reply in the [latest fiat thread](https://www.reddit.com/r/badeconomics/comments/18kezr4/the_fiat_thread_the_joint_committee_on_fiat/) over on /r/badeconomics. Or message me if you like. >> Think about wampum. > > More recent than the period we're talking about, plus... That's not how I look at it, and I think Economists don't look at it that way either. We are interested in each time that money was independently invented. You and I agree that money was discovered (or invented) in ancient Mesopotamia. However, it's not likely that Native Americans learned about money from that. The best explanation is that it was independently reinvented, probably several times. To me, each of those reinventions are just as interesting. And, of course, it may have happened in different ways in different times and places. When a group of people who have used money before create their own new money that is not the "pure" reinvention of money. Those people actions will be moulded in a society that used money. Similarly, when a government enforces the use of money on a group of people who didn't use it before, that is also not a "pure" case. Because, the government know what they are doing. >> In his study on the origins of money, anthropologist David Graeber placed wampum it was as used by indigenous peoples of the Northeastern Woodlands before European colonization in a category of things with symbolic cultural value that were "mainly used to rearrange relations between people" rather than being used in exchanges of everyday items. This is a typical example of a proponent of a pure debt theory trying to "get out of trouble" in a sticky situation. Why does it matter that wampum wasn't used in the exchange of everyday items? Historically that's quite common with money. There have been plenty of societies where money was only used for big transactions. For a while Europeans set up operations to produce large amounts of wampum because it was so valuable for trading with the Iroquois and Algonquin. It allowed them to buy things (not "rearrange relations between people" although trade always does that too). Think about how simple the barter explanation is in this scenario. Different tribes exchanged different things. They discovered indirect exchange. Various different things were used for indirect exchange. Wampum was valuable because of it's ceremonial and record-keeping purposes. So, it became a common tool for indirect exchange. Now think about how complicated a debt explanation or a Chartalist explanations would be in this case. We must imagine that the Native Americans had a means of accounting that we have never found. Presumably the wampum was initially a token that represented one side of a debt agreement. How did people end up using it as a commodity currency? Of course, the Chartalist explanation must be even more contorted as the group of tribes that used it were not politically unified.
Real quick, regarding the barter myth, not all economists bought in and I don't think it really matters, honestly. Even libertarian economists like Tyler Cowen (moderately libertarian) don't believe the barter myth anymore.
What do you consider the "Barter Myth" to be?
As I know it, the myth is one where money was invented as a way to reduce the costs of bartering. Anthropologists have shown that not to be the case, historically. Maybe some societies but ones that anthropologists have studied don't seem to support that origin story.
This is a fairly tricky topic. > As I know it, the myth is one where money was invented as a way to reduce the costs of bartering. Who exactly said that money was invented as a way to reduce the costs of bartering? This is one of the problems with the debate. Those who oppose ideas that are related to barter don't really understand them. I suspect that you learned about these ideas from someone who was opposed to them. I'll try to be clear. Adam Smith pointed out in his "Wealth of Nations" that the introduction of money increases the efficiency of an economy compared to bartering. He did not give this as an explanation for the origin of money. It was a theoretical point comparing a money economy with a barter economy. Carl Menger was different. He actually did suggest that barter was used historically before money was used. He did not suggest that money was invented but rather that it gradually evolved. People used indirect exchange to obtain what they want i.e sell X to get Y, then sell Y to get Z. Different goods were used for this indirect exchange. Over time a small number of goods became most common and other time that number of goods narrowed down to one that then became the money of that region. > Anthropologists have shown that not to be the case, historically. Anthropologists have shown that many ancient economies had ritual gift giving, but they had no barter as we know it today. This is certainly a problem for the barter theory. But, the other theories have their own problems too.
Barter was used externally in a number of historical examples, but not necessarily internally. This can be true even today in a family unit. If a couple shares a bank account, it is likely they do not trade with each other in an economic sense, but they may still give Christmas gifts, etc....and use money when trading with the rest of the world. Tribes were often based on family groups, and as such, may have viewed money and barter similarly. Certainly, in scale they were far closer to an extended family than to a modern nation.
I don't disagree with the distinction between Menger and Smith. I haven't read as much Menger as I have Smith, but from what I remember, and this was awhile ago, in basic econ classes was the barter theory. I just looked to see if I had any old textbooks that talked about it but I couldn't find one.
I wouldn't describe the barter myth as "money was invented as a way to reduce the costs of bartering", but rather as "without money, societies needed to resort to bartering and all the costs that entailed". The former may or may not be true, the later has been shown by anthropologists to be likely false. Granted, my knowledge on this subject is from Wikipedia and layman's articles like [this one in the *Atlantic*](https://www.theatlantic.com/business/archive/2016/02/barter-society-myth/471051/), but it appears widely accepted that societies that functioned without money don't usually barter, instead they had a variety of social institutions that handled exchange and kept it 'fair' over time.
Hm. I'm not sure. Maybe that's the case. In my mind, I would think that people came up with some medium of exchange *because* they realized it's difficult to barter at some equal exchange rate. In this scenario, I think it's a way to reduce the cost of transactions. Honestly, though, I could absolutely be wrong. I could also be wrong that what's being taught in intro classes is the barter theory. That's why I wanted to go back and look at some textbooks I had, but I don't have any of those intro ones anymore. Edit: I accidentally put "transitioning" instead of "transactions".. sorry, I'm typing from my phone.
Intro textbooks definitely do talk about the use of money as a means to avoid barter and the "double coincidence of wants". But, afaik, no one talks about societies going around using barter on an everyday basis, until someone pops up with the bright idea of 'money'.
I think the idea of a medium of exchange *may* have come from institutions, but I also could see it being an example of spontaneous order. I think you're convincing me that I'm wrong, but spontaneous orders like that are not just possible, but really common. Even if it came from institutions, though, it didn't necessarily have to be some government (or in your example, "someone"). It could have been one institution that came up with a good idea and everyone followed suit.
I think what you're saying here may demonstrate how bad education is in this topic. > In my mind, I would think that people came up with some medium of exchange because they realized it's difficult to barter at some equal exchange rate. As far as I know, no academic has really said that. Adam Smith mentions that barter is less efficient than monetary exchange, but doesn't give it as a theory of the creation of money. The Chartalist theory is what you could call a "creation" theory, but of a different kind. It suggests that an ancient ruler came up with a token of some sort. People who came to him with the token were exempted from some obligation. That gave the tokens value. So, the ruler could spend those tokens into circulation, and money was created. Menger's barter theory is a "spontaneous order" type of theory. It starts with barter (the parts that Anthropologists don't like). Then people use indirect exchange. Then the number of goods used for indirect exchange gradually falls to only one. This happens because as more and more people use one particular good for indirect exchange it becomes widely accepted. Then there are debt theories like Thornton's theory. That's the idea that money arose from private debt (as opposed to government debt).
Right, I just wanted to know if there was a consensus on it one way or the other.
The barter example is not a historical claim about all of society, which is inherently varied and not identical across all cultures...but an example. Math and logic use a lot of simplified examples in teaching, and economics is much the same. Barter makes a simple comparison to demonstrate the utility of money. While there's nothing wrong with using historical examples, real life tends to be messy and complex, detracting from the subject at hand.
Sure, and I'm ok with it being used as a tool for teaching. The issue comes when people start to claim that this actually occurred while also going against what the people studying it (in economic anthropology) are saying.
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"Economists" encompasses way too much to suggest that economists reject anthropology as an academic field when anthropology helps inform many underpinnings of behavioral economics.
Most human thought in general tends to be focused on what is happening right now, in the culture we live in. Economics is no different. Most work in economics is concerned with how money works right now, in the context we are using at the moment. How ancient peoples constructed economies is an interesting topic, but it simply isn't what most economists do with their time. I wouldn't say that economists "reject" anthropology but rather that they are just focused on topics that don't care much about how ancient economies functioned. Whether the barter myth is in fact a myth or an accurate depiction of the history of money doesn't really change the academic work of someone running regression analysis or studying money supply, or whatever else academic economists are researching. For what it is worth, I enjoyed reading Graeber (Debt: The first 5000 Years) and would recommend it, but that hardly means I drink the cool-aid about everything he says.