Different theories on the emergence of money

The myth of barter

History of Coinage

The myth of barter

David Graeber's review
Primitive societies vs. great civilizations

David Graeber's review

The emergence of money according to classical economists has been explored. A concept known as the barter myth will now be examined.

One criticism of this classic theory of the emergence of money is the lack of historical evidence to support its ideas.

The critique known as the "barter myth", formulated by anthropologist David Graeber, among others, challenges the classical theory that money emerged naturally from barter. According to this critique, there is no historical or anthropological evidence to show that societies systematically used barter before the advent of money. In fact, ancient societies operated on the basis of credit, debt, social obligations and ceremonial exchanges. The "barter myth" is therefore a theoretical construct designed to justify the classical economic vision, with no real empirical basis.

It should be noted, however, that this theory does not deny that bartering existed, for example, for exchanges between different tribes. It simply denies that bartering was a widely practiced activity within these so-called primitive groups, and that money would be a logical evolution of these practices. It denies that bartering was widely used within a tribe, and that money eventually emanated to fluidify exchanges and resolve the difficulties that existed with bartering. Instead, according to this theory, these groups practiced a form of informal credit or gift for gift.

Primitive societies vs. great civilizations

The application of this theory requires clarifications regarding the great civilizations of ancient antiquity. The theory of the barter myth applies to primitive (stateless) groups of the past and even today (e.g., the tribes studied by explorers in the 18th and 19th centuries). They did not use barter, but rather the forms of exchange mentioned earlier, for reasons already mentioned (weak division of labor, subsistence farming). This theory, however, may not be applicable to the great civilizations of antiquity, such as Mesopotamia and ancient Egypt.

The following excerpts from Aux origines de la monnaie illustrate this point:

The model outlined by M. Mauss in his famous "The Gift" has been adopted by Egyptologists with as much unanimity and enthusiasm as lack of discernment. This has led to a number of confusions, which we won't go into here. Let us simply note that this model applies to so-called primitive societies, which is not the case of Pharaonic Egypt.

Breads, i.e., processed cereals, were therefore units of account which, like the shât (y) of the Old Kingdom, also enabled the opening of credits in diversified goods. This simple example shows that the economy of Pharaonic Egypt was not confined to a system of redistribution. It was highly complex, involving a multitude of exchanges.

As was seen earlier in the section on Egypt and even Mesopotamia and China, these ancient, but not primitive, civilizations, due to the presence of a state, used monetary systems. This was amply demonstrated in the first section of this course. Therefore, this notion of give-and-take, of deferred credit, does not apply to these great civilizations. The precise reasons for the emergence of money in these state-level societies remain a subject of scholarly debate, but evidence points toward state administration and large-scale trade as key factors.