Ancient history is very interesting in these matters: back in the Bronze Age, kings such as Pharaoh and the Hittite, Assyrian, Minoan kings actually did international trade through "gifts".
For instance the Pharaoh was in need of cedar wood, so he would write to the King of the Assyrians in Sumerian (the lingua franca of the time) "Dear cousin, I would like to send you some gifts but I'm out of boats. Cheers, Ramses".
To which his "dear cousin" would reply "Dear cousin, I'm sending you these cedar logs so that you can build these boats you need. Did I tell you that drought has hit Niniveh and the corn is scarce? Yours, Sennahcherib". Then Pharaoh would send back boats full of grain, and so on.
The thrust of your comment is more or less correct, but you make several significant errors in the details.
Akkadian, not Sumerian was the language of international diplomacy in the period you speak of. Sennacherib came later in the Iron Age. And if the Egyptians needed cedar, they'd write to Byblos (which during the New Kingdom, was a tributary state more often than not), not Assyria.
The original comment is almost certainly thinking of https://www.amazon.com/dp/0199858683/ (Brotherhood of Kings: How International Relations Shaped the Ancient Near East).
It's a very good book.
A minor theme is indeed that Mesopotamian city-kings had a hard time trading with Egypt. Mesopotamia seems to have produced mostly textiles, which Egypt made domestically. What Egypt needed from international trade was copper and wood.
All the Mesopotamian city-kings wanted gold, though, which came from Egypt. They could get this one time, by marrying a daughter to the Pharaoh. We have an example of Pharaonic correspondence with a king who repeatedly asked for unworked gold, finally sent a daughter over, received a mountain of gold in return, and concluded by complaining that the gold had been worked (into statues).
I assume many of those statues got melted down.
There is some discussion in https://www.amazon.com/dp/0670022667/ (Carthage Must Be Destroyed: The Rise and Fall of an Ancient Civilization) of how the Phoenician city-states of the bronze age (source of cedar wood to Egypt) gradually succumbed over the centuries to Assyrian empire-building. It's not the main focus of the book though.
David Graeber has a nice way of explaining money arising from IOU's in Debt: the first 5,000 years. It makes a lot of sense and basically explains why the barter myth is so impractical that it could never have been a reality in any sizable community.
I liked his explanation of state-controlled currency evolving as a technology of war. I.e. the king needs to pay his soldiers something portable, dense with value, and hard to counterfeit, and precious metal coins fit those requirements. And then to guarantee that the coins are accepted for payment and hold their value, he imposes taxes that have to be paid by everyone using those coins. Pretty elegant and a system that, even as as a taxpayer, I hadn't thought carefully about.
Taxes certainly existed before state-issued currency, but the purpose was obviously not to grant value to the currency. (It can't have been -- this was before the currency existed.)
Ancient taxes were assessed in kind, most commonly in grain or labor. The reason was that the government wanted the grain or labor. The main benefit of taxing in metal is that grain is perishable and voluminous, not that it creates demand for more metal.
Consider a stylized section of Chinese history:
State-issued currency: copper coins (low value, accepted most places); paper notes (high value in the capital, hard to spend elsewhere)
I was replying to the specific use case of creating a tax to grant value to a freshly invented currency by giving it to occupying soldiers as payment while requiring merchants to pay taxes using it. It was intended to speed up adoption because the merchants needed to get the coin for taxes so had to accept it as payment.
Do you know of such a tax? There are two types of freshly invented currencies:
1. Currency invented where there were just raw materials before. ("Conceptual invention")
2. Currency invented to replace or exist alongside other already-known currency.
In case 1, I believe the currency is generally an object that was already valuable, and therefore doesn't need support. Coins were usually able to trade a little above their value as measured in raw material because of the nominal standardization they provided.
Case 2 is not at all rare, and there are even cases of states deciding to make coins from a worthless material (iron) for ideological reasons. Everyone can have iron.
This seems like an ideal case for propping up the (otherwise too low to bother with) value of the ideological coins, but I'm not really up on the history of this kind of thing. I know the iron-coin states were often economic failures (e.g. Sparta). I know there were a lot of difficulties with paper money in China, but I don't know the details.
"Fresh" from the perspective of a population might be more accurate to what I'm saying - not invented from nothing (that was inaccurate wording). The book we're discussing goes into a lot of detail on this, more than I could having read it so long ago now.
"The author postulates the growth of a "military–coinage–slave complex" around this time. These were enforced by mercenary armies that looted cities and cut human beings from their social context to work as slaves in Greece, Rome, and elsewhere. The extreme violence of the period marked by the rise of great empires in China, India, and the Mediterranean was, in this way, connected with the advent of large-scale slavery and the use of coins to pay soldiers. This was combined with obligations to pay taxes in currency: The obligation to pay taxes with money required people to engage in monetary transactions, often with very disadvantageous terms of trade. This typically increased debt and slavery."
It occurred mostly in subjugated nations as a way to bring in the new money (from the perspective of the conquered, who saw no value in this foreign coin). It accelerated adoption in populations who had no familiarity with the system, and indeed may have been operating on non-monetary systems still (the book credits Alexander as wiping away many of the last vestiges of such economies).
Looking at the above passage, it has some resemblance to company scrip.
> "The author postulates the growth of a "military–coinage–slave complex" around this time.
I'm trying to get a sense of where to put this on a continuum between "I could imagine things happening this way" and "here are contemporary records in which the king specifically states that the new tax is needed in order to get people to accept the new coins".
Postulation isn't really what I'm usually looking for in a historical work.
I should point out that historically, getting people to accept metal was not an issue that usually came up. For example, Hammurabi's code details a punishment for certain merchants who will accept metal as payment but refuse to accept grain. That's the king complaining that what merchants want is to accept metal exclusively (though not coins; they are not known to have existed at the time).
The last chapter is quite poor. The rest of the book is interesting, but I would be interested to hear an evaluation by experts in the historical periods he covers.
A lot of the negative Amazon reviews, at least, comprise complaints that Graeber doesn't address or defend points that he actually does, usually a paragraph or two after they're raised. They don't claim the points are poorly defended or explained, but that they're not, when they 100% for sure are.
The book's very well-constructed that way, actually—make assertions that the thinking reader will have objections to or questions about, proceed to directly call out and address same in following paragraphs—but apparently some people's eyes go so red on reading something they don't immediately agree with that they totally miss the explanation and defense that follows. In short, many of them accuse the book of specific sins it did not commit. Others don't provide enough specific criticism to be analyzable, usually accusing it of the same sorts of problems but without enough details to tell whether the reviewer's just a bad reader like a lot of the other people dumping on it.
Possibly there are good negative reviews out there, but a good percentage of them seem to be folks who are, bluntly, not literate enough to read the book—though it's far from a challenging read.
I picked it up because it is so frequently recommended on HN, and it is much less...academic(?) than I was hoping for. It gets recommended as a great explanation of debt, but it read a lot more like a very biased opinion about debt coupled with what felt like rather cherry picked history. I'm going to try reading it again, but the first time didn't go well...
>I'm going to try reading it again, but the first time didn't go well..
All history is viewed through the eyes of the author's politics. I accept that, and set my personal politics aside and considered his history. One of the major positives of this book is its ambitious scope. The narrative spans millenia of history and I respect that ambition.
I don't agree with everything Graeber says but he proposes new ideas (to me at least). Those new ideas are fun to consider and think about.
I agree completely with your first sentence. I feel like when reading history, though, there is what happened, and there is the story about what happened. Sometimes it's basically impossible to have one without the other, but sometimes it's not, and I think what's compelling about Graeber is the story he tells about debt, but it didn't feel to me like he tried very hard to disentangle his facts from how he felt about them. But like I said, I do need to read the book again.
The more interesting way to analyze history, rather than trying to evaluate the degree of barter, is to seek out the most saleable good which was in use at a given place and time. Humans must solve the problem of "coincidence of wants" (ie. You raise chickens and I'm a woodworker - do we always need each other's goods?). Naturally, they begin to use the most saleable good available to their community as "money" for trade. The most saleable good (the most marketable and easy to sell) is usually the good available to them which scores highest on the following five properties (imagine a radar chart): Divisibility, Durability, Portability, Fungibility, Scarcity.
This way of thinking can provide a satisfying explanation of the emergence of gold as a global store of value.
Humans operate by doing each other favours. You'll find you intuitively know who you've done a favour for and who you owe a favour to. It's inherent to being humans and three year olds can do it - as science has discovered.(https://www.en.uni-muenchen.de/news/newsarchiv/2016/paulus_s...) We all walk around with a favour ledger in our heads.
Essentially "here's a chicken, you owe my a chicken's worth of something sometime".
As groups get larger you end up taking tokens as an IOU aide-memoir. And to nail those who try to cheat.
That then evolves into money. Token money. Tokens representing promises.
But intuitive tracking of who owes you favors and who you owe favors to does not scale. The double coincidence of wants problem is not a myth; it just doesn't come into play until you start dealing economically with groups that are too large for intuitive tracking of favors to work--roughly, groups larger than the typical hunter-gatherer tribe.
As we see in the comments above, the gift economy scaled to include Bronze-Age Mesopotamian international trade. It's true that a Hittite in Hatti wouldn't know everyone in Nineveh, or indeed anyone, but he knew the Hittite king, who knew the king in Nineveh.
Or if you doubt that you will ever meet that trading partner again, or if you just don’t trust them and there is no legal framework for recourse if they screw you over...
The 'double coincidence of wants' problem of barter exists. What is a myth is the assumption that any culture used barter as a primary means of exchange. Barter was used on the edges of tribes, clans, etc. between groups of people who do not share the kind of trust that exists between members of groups, who will likely live out the entirety of their lives around each other.
That does not take away from the fact that the double coincidence of wants is not a myth. A lot of card trades depended on both party having a card that the other party wanted when no monetary medium was used. I am not saying that this was always the case but it happened often.
The realization that there is (a) a double coincidence of wants and (b) this can be solved with some sort of currency are absolutely questions already answered if not intuitively than explicitly by money in modern society, as are related concepts like debt and interest. When someone talks about the double coincidence of wants being a myth, they are not referring to the obvious fact that this is a problem money solves, but that this reason, alone or primarilty, is the reason money, as a world-historical concept, came to be in all societies.
So, no, part of the point is it didn't happen. That is, neither direct nor indirect barter. In a non-alienated society, you have many tangible and intangible obligations towards your village-mates or tribe-mates, which include distribution what you produce or gather mostly among others (since what will you do with it personally after all). And there isn't a discrete "chicken's worth" which you "owe" someone in particular. and so on.
That's not incompatible with the existence of coincidence of wants being a problem. Grubers point is that debt is historically the primary solution to the coincidence if wants, not money.
"Naturally, they begin to use the most saleable good available to their community as "money" for trade."
Why do you assume this is natural? As the article talks about, there is no evidence of this happening vs things like a favor or prestige economy. Mises is an economist, not a historian.
Because from a first principles line of reasoning it makes the most sense to my brain. There is plenty of historical reading over at mises.org by various authors.
So what? It doesn't matter what makes sense to us, it matters what actually happened. Plenty of history makes no sense to me, but I would never just deny that it didn't happen for that reason.
It's symptomatic of the economic way of thinking, in terms of game theory and systems that have emerged more or less out of nowhere. Explanation beyond the surface level of transfers of money is relegated to the work of economic historians. The way mainstream economics focuses on "shadow forms" (as Patrick Murray put it) purposefully excludes the supersensible movements below the forms of appearance of money, capital, labour, interest, rent, etc.
"The most saleable good" in our economy is money. The majority of explicit trades for goods and services involve money. Of course, that is now and we need to explain how this happened.
If I have a good another wants then I may accept something I don't directly want as payment. Of goods I indirectly value, I should value more the goods that are most saleable as they provide the shortest path to goods I directly value. Throughout this my valuations are based on expectations of others' future valuations. We can think of the path from regular good to money like a feedback loop. It's the economic bubble that doesn't burst (except when it does and we all switch to silver or furs).
Of course it's much harder for the value of the anomalously valued good to crash in a real economy because of things like taxation (this is almost chartalism).
"If I have a good another wants then I may accept something I don't directly want as payment. Of goods I indirectly value, I should value more the goods that are most saleable as they provide the shortest path to goods I directly value. Throughout this my valuations are based on expectations of others' future valuations. We can think of the path from regular good to money like a feedback loop. It's the economic bubble that doesn't burst (except when it does and we all switch to silver or furs)."
OK, and here is the key thing, can you provide an example of a pre-money society doing this? Because as far as I am aware there are no examples from either History or Anthropology showing that this happens. Once again it doesn't matter how much sense this idea makes to us coming from a post-money society if it is not what actually happened.
> can you provide an example of a pre-money society doing this?
Can you provide me an example of a pre-money society becoming a post-money society? I can't name any. Unless your point is that any theory would be speculative (which is correct). I think even if we were to see the same evidence our conceptual models would be different but I'd very much sincerely like to see evidence which allows me to rethink things.
> Or, you can just accept a debt as the indirect thing
You can :-)
If the debt is non-transferable, so simply between me and the other guy, then it's not money. Debt like this may lead to money but its no more money than barter is. Of course that is not to say that debt cannot be money (even following a similar process). I want to be clear that I would make no normative claims over which goods (or similar things like debt) can become money.
I don't think the argument I made was strictly Misesian but it's similar and to his credit he was careful on this same point. In The Theory of Money and Credit he's clear that he doesn't argue for gold (or metallic currency) based on "intrinsic value". He even goes out of his way to specify cases where metallic tokens (like scheidemünze) may not be considered money in the narrower sense (but may in the broader) and includes things classifiable as debt in both the narrower sense of money and in the broader (as money-substitutes). One key difference I can see in his treatment of debt is that he considers it after the existence of commodity money.
> Which works because you live in a small society where everyone trusts each other
I think this is one of many arguments where there's the unexplored subjective element. Argument A and argument B look reasonable to person A and B because of their upbringings. I wonder how trusting you are compared to me and how your social experiences have differed.
> Barter of goods is just inefficient in comparison.
Then you can of course barter, but where do you think most human interactions happened during that time? Inside small groups of people that trust each other or between different groups that doesn't?
Except that historically and worldwide, silver, copper alloys and even grain were far more commonly used as money (medium of trade, unit of account, store of value) than gold.
> The most saleable good (the most marketable and easy to sell) is usually the good available to them which scores highest on the following five properties (imagine a radar chart): Divisibility, Durability, Portability, Fungibility, Scarcity.
That's why you see certain agricultural products like grain and olive oil in the ancient Mediterranean serving in the role of currency prior to gold. While less durable than gold, these goods met all the other criteria and ultimately were useful as well. Gold comes on the seen when there is a significant economy-wide surplus of output.
This is what I kept thinking while reading the article. Currency always evolves, it just might not look like currency at first. As someone else said, wheat and copper were popular for a long time.
I remember way back when Diablo 2 was big, in-game gold was essentially worthless as it was so common. So players started using bushels of a somewhat-rare and generally useful magic ring as currency.
>Humans must solve the problem of "coincidence of wants" (ie. You raise chickens and I'm a woodworker - do we always need each other's goods?).
The fact that this must be solved in an exchange economy does not mean that it is the same as the genesis of money. Every historical economist has had a theory as to the genesis of money, from Smith, Ricardo and Marx to Mises. To say that money evolved as a solution to the problem of the coincidence of wants may not be correct. Solving the coincidence of wants may just be a side effect.
The article indicates that that problem did not really exist. If you don't have to barter, you don't need a mutual coincidence of wants. If economic activity is to a greater extent a group activity, than there's a community of wants. etc. If anything, the discreteness of wants is an engineered phenomenon, or at least the result of developments of different social orders with a different position of the individual.
I think a similar misunderstanding takes place with Hobbes's idea that the man in the state of nature lived in a war of all against all. There's simply no evidence that this ever happened, even though it has been used by Hobbes and others as a justification for the need of oppressive institutions.
I think that if we start investigating the conceptual underpinnings of things quite a bit of economical and political thought will prove to be essentially unfounded and unscientific.
This being said, we can't entirely fault people like Hobbes and Smith who didn't have access to the investigative tools that are now available. We can however fault today's social scientists who continue to build on faulty foundations instead of honestly reassessing their theories.
To over-simplify, Hobbes' "man in a state of war" is a noble or land-owner, who needs to keep control of his property against the landless peasantry and opposing nobles.
This is reminiscent of how, say, in Athenian democracy, a citizen was a male property owner - and most of the population just didn't count; most people were reduced to slavery (much due to debt actually!). Some of this conception persisted all the way up to the original US constitution - women don't count, slaves don't count but are property etc.
As for faulting Hobbes - you can fault him plenty. There was critical anti-establishment practice and thought, always - in varying forms.
Not sure whether the expansion of this 'psychological debt model' is desirable. Because it's impossible to quantify such debts without money, it becomes more difficult to optimize allocation. Maybe the people in the woods haven't found water during many days. Suppose I have some water. More than I'd need for now, but not enough to last for years. I would not be inclined to give any to them. Sure, the woods people might make me a meal or sing for me which is nice, but my water supply is ultimately a guarantee for my long term survival. But if they did have even the concept of money, they might offer a high price, a price that allows me to say 'hey, with these resources i could build a house/attract a partner/drive away in a lambo and that's more useful to me than one month out of my seven months of water'. The antropologies make a compelling case for a different precursor to money and these gift economies are very similar to a money based economy. But money does offer the additional benefit of value quantification and security of deposits.
If the woods people have been without water for days, and you deny them water, they are probably going to kill you and take your water. Remember, your first priority when encountering other humans is to survive, sometimes the right gift may save your life.
I wasn't very specific about the situation. You are right in the sense that trade makes sense only among equals, the rest would just be forced to give up their possesions. So we have to assume this isn't possible. We can assume I am standing on a cliff they can't easily reach. Or perhaps I have a few muscular non-thirsty buddies with me.
Even if you are equal in strength, they may choose to fight you out of desperation, giving up some water is probably still preferable to the risk of a fight.
I suppose the value exchange didn't have to be exactly balanced. It probably was more like perpetually exchanging favours. You would automatically try to repay the favour in an appropriate way, because you wanted the relationship to continue.
Yes it's a bit like buying rounds or dinner when you go out with friends. You don't have to keep an exact tally but you all usually know if someone is skimping or only offers to pay at the cheaper venues (and this might be OK among friends if we are all in different financial situations which is an important part of a favour economy).
There was a great blog post I saw some years ago on HN about someone reminiscing about halloween candy trading as a kid. They remembered fondly about just how organized the trading quickly became. it was all barter, but there emerged quickly a candy franca. All the kids were willing to accept three muskateers bars because they knew others would accept them, and worst case they were at least tolerable to eat.
While I agree that the barter economy as a rhetorical construct is most certainly made up, being very useful in freshman econ, I’m not convinced it money could possibly happen without first having trade in general. I would argue that money happens very quickly, which is why you’re not going to see a lot of evidence of extensive barter. If one childhood is enough to establish a candy currency, then you’d expect a similar currency to develop very quickly in any society.
The argument from the apparent source of this (Graeber's Debt) is that the progression of "barter, but that's inefficient so we create -> money, and then later we create -> debt" is historically inaccurate—instead, debt comes first, barter also but mostly for dealing with strangers, and then money is a later invention that has to do with sophisticated (relative to what came before) military logistics in large states/empires.
This is an oversimplification but gives you the gist of the book's argument. So yes, it agrees that money is a relatively late development and trade existed before it and was largely barter-based but only when strangers or rival groups traded, but the central argument is that debt (basically) came first rather than last, and effectively precedes money, which is more a tool of debt than debt is a tool of money, if you will.
Was it "formal" debt though, or more like "I'll give you some of my extra grain, because you seem kinda friendly, and you might repay me the favor if I happen to be in trouble in the future"?
'"I'll give you some of my extra grain, because you seem kinda friendly, and you might repay me the favor if I happen to be in trouble in the future"?'
I think one way of looking at this is that humans are generally embedded in larger contexts, because we always come in communities. (The exceptions are, broadly speaking, historically uninteresting.) So it isn't just that Alice and Bob are sitting there at this isolated moment when Alice has grain and trying to work out if it's worth asking Bob, whom she has never met before, to trade the grain for a future favor. Alice and Bob know each other, and are embedded in a community. They have access to a reasonable approximation of each other's reputation. Alice knows whether or not Bob tends to default on his debts. Alice can make Bob pay for defaulting with his reputation, which can theoretically become so bad that nobody wants to trade with him, which in many historical circumstances may be a literal death sentence. (We are very wealthy, and casually trade with many strangers, and have a hard time internalizing the world they lived in.)
Attempts to model Alice and Bob's interactions as if they are strangers meeting for the first time, who generally expect to never see each other again, may be of some mathematical utility but won't explain the real world very well.
So, it's neither a formal debt in anything like the modern sense, but neither is it "maybe you'll repay me in the future"; there's not total assurance, but in the community context there's much higher assurance of future repayment than that.
Things like tally sticks for tracking debt were used, absent and before currency, it seems. Pretty widely. IIRC (it's been a while since I read Debt) the book asserts that very small tribal or family economies likely worked the way you describe, with informal, mental tallies of debts, and as communities got just a bit larger physical tallies took over, persisting for some time. A consequence of this is that debt isn't surely "less real" or less essential/natural than money, nor even newer, but in fact more real, more essential or natural (so to speak), and older.
Even in small groups you still need a currency (unit of account) before you can keep a tally, though—unless you're going to keep separate tallies for each kind of good, which quickly becomes impractical since even similar kinds of goods may not have equal value. Also, you need some standard good with broad marketability as a means of settling debts which can't be paid in kind (i.e. legal tender or equivalent).
They certainly had a unit of account (bushels of grain, for example) to quantify debt, but they didn't have a currency, which has additional necessary criteria besides unit of account.
What these cultures had, according to Graeber, were essentially ledgers for keeping track of debt.
It doesn't have to be formal. Everyone does this today, and keeps a kind of list of debts in their head. "Bob asked me to help him move this weekend, and I really don't want to, but he helped me move last year."
If you don't repay your social debts, you're going to find yourself getting a lot less favors done for you, and having a lot less friends in general.
At some point the article states that money "might just be a choice", but I think the article itself is pointing to the evidence it is not.
The git economy in a village and the one in a community of friends have something in common. Another hint is yet in the article when it states "it's hard to imagine a gift economy working to build skyscrapers and iPhones".
It seems pretty clear to me that the problem of a gift economy is that it doesn't scale.
As long as every person in a group knows each other it is fairly easy to keep track of gifts given and received. This becomes impossible as the group grows and the number of people each person has to keep track of grows with O(n).
Of course you can divide a big number of people into groups and have those groups use a gift economy between them by having leaders keeping track of gifts given and received between groups.
And of course can also have multiple levels of subdivision. But the problem becomes clear. The system is quite centralized and there is no direct way for someone in one of those groups to exchange goods and services directly with someone of another one without the good or service going up the command chain and down to the other side.
It sounds like you're criticising barter rather than a gift economy.
Unlike in barter, in a gift economy no one keeps track of who owes what to whom, they just all give each other what they need.
To give an example, I've long participated in the open source community, where I give away software that I've written and help others on IRC, in various forums, and on stackexchange. I don't ask for or expect anything in return, but I know I'm helping the community and I seek and accept aid from the community when I need it, by asking my own questions and using software freely given away by others.
This example is of a well functioning gift economy which has scaled incredibly well.
> Unlike in barter, in a gift economy no one keeps track of who owes what to whom
My reading of gift economies is that there often is some element reciprocity. In any given context, there might not be a direct exchange of gifts, but those not participating in the process over time get excluded from future gifting. And there are all sorts of "social status" and signaling effects that make this much more than just altruism.
So similar to socialism/communism you eventually run out of people's money when the people fleecing the system drain the well because it's not being tracked.
I find your open-source analogy funny when we have all these maintainers of major projects protesting about lack of funding.
The gift economy fails when it comes up against human nature at scale.
Humans are lazy and greedy, you need to account for that. When you're not checking who owes what, you're ripe for exploitation.
in 199x in Russia the B2B economy was working basically on barter. The accounting/business software support for 5-10 segment length chains of "mutual credit" ("vzaimozachet") involving multiple business partners between your product and finally money (or something almost as liquid as money) was a feat of business software engineering separating leaders from the chaff - while the world line of a given barter chain may have been crossing spacelike/timelike boundary several times it still had to look correctly in all accounting frames of reference :)
One of the things which emerged to be almost as good as money back then was "energy credits" with large power plants and networks serving as a kind of banks/clearing houses.
not really, i'm 22 years out of that game. While most related info on web is in Russian, googling something like "russia multilateral mutual offset barter 1996" (any 199x year works to filter out links talking about modern situation) seems to bring links describing various facets of how it was back then.
The relationship between monies and goods has been murky. But it's kinda cool to cut a clear line to say that bartering economy exists before money. But I think they always co-exist. This relationship is more like chicken and egg.
I did some research on how gold became money. Archeologists found evidence of gold usage dated 40,000 BC. When gold shows up in written history around 10,000 BC, it's already money. We did not really know if gold was good first or money first. I conclude that it's a little bit of both when humans first found it. I wrote about the topic in this article:
Going back further, I think we can say sex was the first kind of currency. Organisms exchange sex to reproduce.
Today, we have Bitcoin. It's also unclear how we should define it: asset or money. The answer is it's a little bit of both. I hope the IRS will lower the tax rate on Bitcoin when they understand this.
Money is just a representation of the debt incurred in a "gift" economy (a "debt" economy would be a better term for it) and allows the extension of those practices to strangers or people you don't trust or can't have some influence over. Gift economies still exist today in Western countries, often in rural areas among neighbors where you will do a favor, help out, or lend an item in exchange for likewise help at a later date. This works well in small groups that know each other well but breaks down when it becomes hard to track who did what for whom. Hence the invention of a tally system like money.
I read about this anthropological/historical fact in David Graeber's excellent "Debt: The First 5000 Years", mentioned in the article. More about that book:
I find Nick Szabo's argument that money-like collectibles were in fact the key technological advantage Homo Sapiens had over Homo Neanderthalensis an intriguing one:
This article makes the same mistakes that the OP's article does - assumes the truth of the myth of barter. It even uses the odd term 'time-offset barter', which I have never seen outside of libertarian/ancap analyses. Barter is a spot transfer, 'time offset barter' isn't barter but something else.
Barter requires a coincidence of interests. Alice grows some pecans and wants some apples; Bob grows apples and want some pecans. They just happen to have their orchards near each other, and Alice just happens to trust Bob enough to wait between pecan harvest time and apple harvest time. Assuming all these conditions are met, barter works pretty well. But if Alice was growing oranges, even if Bob wanted oranges as well as pecans, they'd be out of luck -- oranges and apples don 't both grow well in the same climate. If Alice and Bob didn't trust each other, and couldn't find a third party to be a middleman [L94] or enforce a contract, they'd also be out of luck.
This is the canonical Myth of Barter, where some society is assumed to have existed that was so inconvenienced by the double coincidence of interests/wants/needs that it invented money. This never happened as there exists no evidence that a society existed that used barter as its main method of exchange; barter was used on the edges of society, spot transfers made between people who did not have the trust necessary to support debts.
Here's the passage where he refers to 'time-lagged barter':
Local but extremely valuable trade was, this essay argues, made possible among many cultures by the advent of collectibles, by the time of the Upper Paleolithic. Collectibles substituted for otherwise necessary but non-existent trusting long term relationships. If there had existed a high degree of sustained interaction and trust between tribes, or individuals of different tribes, so that they gave each other unsecured credit, this would have stimulated time-lagged barter trade.
I did read the article. In fact, I read this article years ago shortly after it was published as back then I was an anarcho-capitalist, very interested in non-state solutions to money.
That's just a straightforward description of what barter is. Barter exists, it has the indicated limitations.
Szabo's argument is that collectibles predate history by tens of thousands of years, that rather than replacing some mythical bartering system, that a system of exchanged collectibles co-evolved with the entire concept of trade.
substituted for otherwise necessary but non-existent trusting long term relationships, as in, allowed them to exist in the first place, not replacing some barter-only system. Nick isn't crediting the Austrian origin mythos here, he's providing a cogent alternative to it.
What I'm seeing no evidence for, and don't expect to, is the claim that debt precedes collectible money. This is quite unlikely, as it seems to be a feature of sedentary agrarian cultures; it's difficult to picture it arising in a milieu of traveling bands of hunter-gatherers, who are mutually suspicious, often rivalrous, and may not speak the same language.
In games, even when the game is explicitly designed not to have currency, players will invent one in order to facilitate trade. It'd be strange if humans didn't do this in real life too.
As an example, in Ark, people use cementing paste as a currency. It's very time-intensive to make, stacks a lot, is not terribly heavy, and high-level crafting and building needs it in solar-mass-esque quantities.
Economists have known for a long time that there is something fundamental about the human condition that leads to the emergence of money, or some approximation of it that serves the same purposes. Where they have struggled to make solid progress is in formalizing the "frictions" that make money an essential component of equilibrium economic models.
...huh? The article talks about the lack of evidence for barter economies. How does that falsify my comment in any sense? Anyways, I made my statement based on what I've learned from reading academic research in economics, not on whatever this guy from The Atlantic said.
This is one of those things where I wonder if we are just so inured to the idea of currency that we cannot conceive of people that don't work that way. It's really hard not to bring anachronism into history and try to put yourself in the mindspace of people who didn't necessarily have the same unconscious framework of thought baked into them.
I think it comes down to the fact that a hub and spoke model, where relative values only have to be maintained and agreed upon into and out of a single commodity are easier for humans to conceptualize and agree upon at-large than complete (or worse yet and more likely, incomplete) graphs.
Interesting that they mentioned The Rainbow Gathering as an example gift economy, rather than Burning man which is 7x larger and I would guess more widely known.
Inside, it is mostly a gift economy. Selling and barter are prohibited, except for ice and coffee sold by BMorg at Center Camp. There is some covert selling of drugs, but those are also largely gifted. It generally works because most people bring too much stuff anyway.
> A potlatch is a gift-giving feast practiced by indigenous peoples of the Pacific Northwest Coast of Canada and the United States,[1] among whom it is traditionally the primary governmental institution, legislative body, and economic system.
It was a good article until the gift economy crap at the end. Game theory explains all of this quite well.
Money is desirable because it makes transactions and economic calculation so much easier. As a pure abstraction, money is simply a ledger (https://www.minneapolisfed.org/research/sr/sr218.pdf). When humans live in small groups related by blood, they just keep the ledger in their heads (if at all) because the penalty of cheating is so great that no one will defect (exile from the tribe and a lonely death).
When humans need to transact with people and there is uncertainty about (a) whether they will be able to punish cheating, and (b) whether they will ever meet this trading partner again, then they will use a more explicit and trustworthy form of money to reduce the risks. For most of human history the only real option here was some kind of physical token, which had to approximate the ledger abstraction: uniform in quality, easily divisible, easy to authenticate, with as inelastic a supply as possible.
The modern sovereign state allows for fiat money, since the state can simply declare that its official currency is the ledger that everyone will use. It's quite efficient, since you can do things like maintain a banking system that exists primarily as numbers in a spreadsheet rather than vaults full of dusty gold bars. Our fractional reserve system also mingle debt and money, and for most of us the two are equivalent.
This makes perfect sense when you consider that money is a claim on the future output of everyone who agrees to use the money. It's an EOU: everyone owes you. Thus, if you issue fiat currency against public debt, it's effectively an EOU as well since everyone in the economy is indirectly responsible for the eventual repayment of that debt. Of course, sovereign currencies have borders, so looking at the ledger used by governments to keep score amongst themselves is quite telling.
However, when there is no socially accepted authority to dictate consensus, how do mutually disinterested individuals agree on a form of money? This was a pure thought experiment until the invention of Bitcoin, because the options were exceptionally limited: precious metals were so much better than anything else that had been tried, for reasons I won't go into here, that there really wasn't a choice. But with Bitcoin, you have a protocol for digital cash that can be used to create an infinite number of ledgers with the same desirable properties. How do we choose which one to use?
Given Bitcoin has failed miserably as a currency, being almost universally abandoned for this purpose for various reasons, I don't see how you can present it as the future of money.
Also, game theory is a very limited model of human behavior. That you choose to invoke it, and you choose to believe that humans are simple rational game-theoretic "players" is not in any way proof that they actually are any of these. There is a lot of observable human behavior which contradicts rational and game-theoretic models - just look at some observations from behavioral economics.
Also, game theory is a very limited model of human behavior. That you choose to invoke it, and you choose to believe that humans are simple rational game-theoretic "players" is not in any way proof that they actually are any of these. There is a lot of observable human behavior which contradicts rational and game-theoretic models - just look at some observations from behavioral economics.
There are also plenty of scenarios in which humans do behave according to game theoretic predictions.
This is such a tired argument that I can't believe I'm repeating it, but game theory is a bit like highly school physics ("assume the cow is a sphere and there is no friction") in that it's an oversimplified model of human behavior that you can still use to make testable predictions.
Also the deviations from expected utility maximization in behavioral economics can and are being incorporated into current game theory research. See for example "Repeated Games with Endogenous Discounting" by Kochov and Song.
The point of all this is to say that you can't dismiss an argument out of hand because it appeals to game theory, on the grounds that "game theory bad".
I did not mean to dismiss GP's argument simply because it appealed to game theory. In fact, GP did not have an argument at all - they just dismissed the article's historical description by simply saying "game theory explains that better" without any additional explanation, and then proceeded to make claims about human psychology presumably on the same basis.
Thanks for the pointer to the article. Game theory is an extremely valuable tool and model, it is just not the ultimate word on human behavior, at least as it stands today.
Sorry I didn’t cite the list of peer-reviewed economics research that forms the basis of my intuition on this subject, I’ve only got a limited time budget for HN commenting.
If you had not been commenting this on an article explicitly explaining why it contradicts generally accepted economic theory, you would have had more of a point.
Also, I wasn't asking for citations, just some general arguments.
Thank you for the succinct defence of the validity of game theory.
On a meta level: Is there a generalized reason why people reject tools of analysis on the basis of "imperfect reflections of reality". I've never come across someone rejecting the formula for the diameter of a ball just because it's "only an approximation". Does it have something to do with number and size of assumptions involved?
I think an important difference is that physical models usually have a pretty good idea of what details they are ignoring, and thus some quantifiable idea of the amount of error they may introduce.
Meanwhile, sociological models don't really have any idea of how much relevant detail they are ignoring, meaning that it is far more likely than in physics that the model is simply not useful, equivalent to saying that may make unfounded assumptions (like trying to use a spherical frictionless cow model to compute what kind of cow shoes work best).
preamble: I think game theory is super useful and applicable.
It's when people hear an analysis and remember experiences in their past where, had they applied that same analysis, they would have been completely wrong and maybe even achieved a much worse outcome for themselves.
Another take is that some situations have chaos-like properties when approximation analysis is applied to them. The diameter of a ball isn't going to explode several orders of magnitude wrong and into negative space.
We learned this lesson in 2016 during the Bitcoin scaling wars.
The path to global unit of account does not begin with "medium of exchange" it begins with "store of value".
The primary purpose of Bitcoin is to be a store of value (the definition of money), without this achievement it cannot evolve to a medium of exchange (definition of currency).
"Store of value" is not how economists (and most normal people) define money. Pretty much any non-degrading asset can be a store of value. That doesn't make them money.
To be money, something must fulfill three criteria: 1) be a medium of exchange, 2) be a store of value and 3) act as a unit of account. It helps if the something is also fungible, easily divisible, etc.
Missing the forest for the trees. Those three functions of money are the “cliff notes” description of money, but there is a deeper abstraction that all of those properties can be derived from: money is a ledger. In the case of cash or bitcoin, the ledger has a constraint that negative balances are not allowed.
Right, Bitcoin will never have a competitive advantage as a payment method (“medium of exchange”) but as long as there are healthy, liquid markets to convert between Bitcoin and fiat currencies it doesn’t really matter.
You may state it has failed from your perspective, but it is actually used quite often.
It's just not used for the things you're buying. You don't need BTC to buy stuff at the store. The State enforces dollar legitimacy.
So what's it good for? Anything the State does not recognize. In this realm, BTC and siblings like XMR are vigorously exchanged. Surely your imagination can fill in the details. :)
Most uses of Bitcoin for actual transactions would not exist at all in an ideal world, with perhaps some minor exceptions (e.g. protecting money from tyrannical regimes).
Yes, currency reserves are the ledger. This includes a variety of things, both hard currency (gold) and claims on foreign sovereign debt. The US Dollar has emerged as the dominant component here, but that state of affairs is not guaranteed to last forever, and when it changes it could be quite tumultuous.
Currency reserves are not the ledger. The ledger of the monetary system is, not surprisingly, the electronic ledger in the central bank that interconnect all the private banks.
The private banks have their own ledger, and, in that sense, they can create money. But if they have to operate outside their ledge, they need a "more real" money. That money, it's the ledger in the central bank (and cash).
This "more real money" is called "bank reserves" (not to confuse with reserves of gold or foreign currencies that are a different thing).
I’m talking about the ledger between sovereign governments, you’re talking about the ledger within a single sovereign country. Two completely different things.
Not exactly. The BIS is owned by 55 central banks... which implies that it is subordinate to them, not the other way around. It is a way for banks to lend reserves to one another, basically. So it is a ledger, for sure, but a debt-based on that exists only for easy transaction settlement and not as the “scorecard” of wealth that a true ledger would imply.
That is largely in line with what Graeber’s book says, in that most of the use we see of barter being out of necessity by people who already know how, and were familiar with using money (say, after their money-using civilisation collapsed), not as much before monetary systems existed (except for some trading between tribes).
And then later you have one of their institutions basically becoming a central bank and issuing a currency!
A similar kind of a "delayed barter" economy did exist until recently in communist Bulgaria. Without any intervention from the government, people were exchanging items and doing mutual personal favours (sometimes against the law), all based on one's "social network".
Knowing the shopkeeper in the butchery meant that he could reserve the fresh meat for you once it gets delivered, while you, for example, as a car repair guy in a state enterprise would provide him with some parts for his Lada from any leftover quantities. It was a hidden parallel economy that was "boosting" the planned economy. No kind of accounting was taking place between the exchanging parties, people were doing it for their own interest in the long run.
These types of relations between people were (and still are) leading to many corrupt practices. A police officer or any kind of state representative would treat you differently if you were a part of their social circles. It's a toxic environment where you start putting greater value on connections rather than on actual work and self-development.
Barter is a spot transfer. 'time offset barter' or 'delayed barter' isn't barter, and I've only seen this weird term used in libertarian/ancap/Austrian economists attempting to come to grips with the rather strong evidence against the myth of barter from which they derive their theories of money.
"On paper, this sounds a bit like delayed barter, but it bears some significant differences."
Yeah sorry, but it is a barter economy. They only frame it differently to get their papers published.
Yes, it may work not exactly like described in the economics textbooks (and gift economies have some interesting specific properties). But I am really tired of people claiming everything in economics textbooks is to be taken absolutely literal, and if the real world is not like that, then classical economics has been refuted.
Of course they use idealized models in the textbooks, including the rational actor. The economists are well aware that they are using simplified models.
When you do a favor for a friend (like giving a referral for a job), do you see it as a transaction where you expect them to pay you back at some point?
>When you do a favor for a friend (like giving a referral for a job), do you see it as a transaction where you expect them to pay you back at some point?
To some limited degree.
If you were later in your life in need of a job, and your friend could refer you to their new company, but they refuse to because of arbitrary reasons.
Would you not think they are being a poor friend? Even more so because you did a very similar favor for them in the past?
Possibly, but some expectation of reciprocity does not equal debt and an 'internal ledger'. That some aspects of some human interactions can be modelled by a transaction model doesn't mean that they are inherently transactional. We may well find that there are important differences and that the actual internal human model is different.
Even your example only really works because you have constructed it in a specific way. Of course if your friend could do you a small favor that helps you greatly, and that you have performed for them in the past, you would expect that they owe it to you, as if you had a mental ledger. However, if the situation is slightly different, say, their father is ill and they are caring for them in hospital, would you still expect them to call their office to recommend you? If they were out of a job at the moment as well, but happened to have some extra money, would you expect them to provide you a loan so you could fund a start-up instead of getting a job?
I don't believe human relationships and gift economies reduce to a kind of barter. There are barter-like aspects to it, but I think they stem from different internal impulses. I may well be wrong, but I don't think we can assume they are not simply because some mutual exchange is taking place.
Again, economic theories don't need to be taken literal, they are simplified models. Just because somebody helps somebody else in need without immediately expecting a carrot in return, doesn't mean bartering is refuted.
Even in our today's world with money, people help other people in need. I don't think it defies economic reason, either. It is "pay it forward" or a kind of social insurance, as people can expect the same being done for them. Also perhaps it is simply a different kind of interaction, who says EVERYTHING has to be modeled as a trade? Or maybe it is the price for belonging to society, or to a certain circle of people, who would shun you if you would display antisocial behavior. Not every exchange good has to be a carrot.
Maybe the insurance model explains it quite well, now that I think about it.
Rational actors also work out in the long run, because by evolution the more rational strategy prevails. So people may not be aware why they help others (they don't do a calculation in their head every time), but it can still be the rational thing to do.
This idealized barter economy contains a the same rather specific notion of value (as something countable, comparable, fungible, etc.) that is like the idea of value that a monetary system rests on. The article suggests that historical evidence fits better with the idea that money actually precedes that notion, rather than the other way around. This should impact the way barter economies are analysed and compared to monetary systems.
I'm sorry, but it seems like you also have, if not an agenda, then at least some preconceptions you don't want to adjust. "I'm sure of X" really isn't much of an argument.
I remember a story of a linguist (Dan Everett, probably) working in the Amazon. He tried to convince a speaker of the language he was studying to sit with him for a few hours to help him with his grammar. He offered some fishhooks in return. The guy asked, "do you fish?", to which he replied no, and then the guy looked puzzled and said "then why don't you just give me the fishhooks?"
There are all sorts of societies, or were, throughout history. I remember reading about one where they didn't have the concept of ownership of things. But it was very logical for their environment, where most things would only have been a hindrance. In such a society, for example, maybe people would be wondering why somebody would want to hold on to fish hooks.
So sorry, some anecdotes don't cut it.
Me having an agenda: I have an opinion, obviously. Feel free to take what I say with a grain of salt. My whole point was that you should also take what Graeber says with a grain of salt.
That's exactly my problem with him, he is always in salesman mode. He has the conclusion figured out and works backwards to find the arguments he wants to see.
Just because people barter or keep scores, it doesn't mean they can't do other things, like be nice or give gifts occasionally.
Honestly, to cut the discussion short: do you have kids? I have two kids. Maybe I am doing something wrong, but they are really not all that naturally generous and giving to each other. Must be the toxic capitalist environment they grew up in? How can I activate their socialist genes and make them want to share all their toys with each other?
The historical informations on the non-existence of barter economies was interesting, but then the article went into a nosedive with an anarcho-anticapitalist rant on the evils of money.
It's also interesting that the article seems subtly framed as a hit piece against Adam Smith. You have to get 2/3 of the way into the article before somebody says "you know nobody actually believes that, right?"
Yes, Smith himself did believe it, which makes this an interesting article about anthropology and the history of economics. But the whole thing should have been structured differently.
> nosedive with an anarcho-anticapitalist rant on the evils of money
This seems like a disproportional emotional response, considering that the article was roughly 30 paragraphs, out of which 1 was dedicated to "the evils of money" and 1 to the current existing anarchistic communities.
I dont really care, but you might gain from understanding your own bias in this regard
What I wrote might have used too strong words, but I feel like all the discussion around not-barter economy was just used to support the point the writer was doing on the evils of debts and money.
While this is a thought provoking article, it makes assumptions that are not necessarily true. If a person thinks in terms of resources and not in terms of products you can begin to see the fallacies. It is easy for a group with common interests to share resources. The problems begin to arise when the group doesn't have a resource that it needs. As an example, if the Iroquois lived in a region where there was no obsidian which they would want for making tools and hunting instruments, they would need to approach a neighboring community that has access to the material If that community didn't want the Iroquois to have that material because it would upset the balance of power in that this material could also be used for making weapons of war. If the other community already had all the resources it needed to comfortably survive, how would the Iroquois over come their reluctance to give them obsidian? For the Iroquois this is becoming a matter of survival of their people. It they don't have this resource they won't have the tools they need to farm or to hunt. This is just a simple example, with more complex societies the more complex the problems.
In my life time, I have seen people try to sustain "gift economies". I remember the communes of the sixties. On paper they sounded quite reasonable. Most of them didn't survive or evolved into capitalistic economies.
One last point. Slavery was not an out come of the invention of money. It was the out come of the invention of war. What do you do with enemy combatants that surrender? Do you just kill them? Not if your humane. You make them slaves.
Commune’s are unstable, but can work fine when separate from income streams. I am aware of one that lasted 30+ years slowly dissolving as no effort was made to add new members and people slowly left or died over time.
Monastery’s demonstrates what it takes for such communities to last over hundreds of years. Effectively they must recruit, be economically viable, and avoid any single point of failure like having a specific leader.
Donations from the public or formal religious institutions are just one revenue source. Often they where effectively self sufficient gathering revenue from farming, winemaking, baking etc. My point was outlays need to be less than revenue for the institutions to survive long term.
The downfall of the self sufficient commune movement is it frequently resulted in poverty. The example I am referring to had well paid professionals including doctors etc who saved money by joining. Low rent including utilities, food, appliances, and household supplies allowed members to travel and party more. In effect a collage fraternity without the collage rather than a monastery without a religion.
Before the Reformation and the revolutions, monasteries generally had land given by the nobility or the otherwise wealthy. Some farmed it themselves, some had tenants. I don't know how much money monasteries tend to get directly from the Church.
As Smith described, people didn't invent money straight away. First, resources like salt and metals; then stuff you can melt (easily divisible). Then official coins of equal weight to fight counterfeiting and inaccuracy of weight.
I'm afraid this is one of the "history doesn't fit my ideology" pieces.
The first two words after the title are "Adam Smith". Later text confirms that it's the same person, with "The man who arguably founded modern economic theory, the 18th-century Scottish philosopher Adam Smith, popularized the idea that barter was a precursor to money."
The idea of Smith, Ricardo and Marx, many interested economists and philosophers of economics argue, can still be used very fruitfully to analyze current economic and societal conditions. The fact that some of their analyses were dropped as the discipline of economics grew out of political economy is not necessarily a sign that the analyses were deficient. Alan Freeman has some essays on the ideological motivations which led to their analyses of labour and capital being dropped.
If barter never existed, then how did Christopher Columbus and his many successors through out ages trade with natives in America or Indonesia? They definitely weren't using IOUs.
there's already very good rebuttal to David Graeber claims by Robert P. Murphy [1]: "Finally, we have actual case studies of communities developing money prices from scratch: namely, prisoners who end up using cigarettes as the common medium of exchange. The classic work here is Radford's 1945 article, "The Economic Organization of a P.O.W. Camp." There is nothing in Radford's account that conflicts with the standard economists' story about the origin of money. The prisoners certainly weren't giving each other things from their Red Cross kits as gifts or as loans. No, they first were trading (in a state of direct exchange) and cigarettes quickly became the money in their community for all of the reasons that economists typically cite.
And to reinforce the point we made earlier, Radford explains that the prices (quoted in cigarettes) of various items were posted on a board. If Graeber and his colleagues stumbled upon the ruins of this P.O.W. camp, they would presumably conclude that there was never a preexisting state of barter, because they only found boards listing prices quoted in terms of cigarettes. There were no boards listing the thousands of pairwise permutations of direct-exchange ratios, and so clearly the Mengerian story must have been wrong — so would go the erroneous reasoning of Graeber."
> Trade did occur in non-monetary societies, but not among fellow villagers. Instead, it was used almost exclusively with strangers, or even enemies, where it was often accompanied by complex rituals involving trade, dance, feasting, mock fighting, or sex—and sometimes all of them intertwined.
They talk about that and say barter generally did exist as trade between groups outside the local community. Which makes sense as an alternative to the gift economy.
Also POW camps aren't really great examples because they're a) already coming from money based societies b) not producing their own goods, ie all incoming things are basically gifts especially in the POW camp and everyone has a similar set of goods initially and c) they're in confinement which distorts any group's dynamics.
That last part of b is really because people all share 90% of the same set of resources and the main difference is the relative weights each person assigns to each item.
Perhaps interestingly, the example of the cigarettes is exactly the example Graeber gives in his book of an instance where barter does emerge, and it does so precisely because normal economic conditions have broken down:
"Elaborate barter systems often crop up in the wake of the collapse of national economies: most recently in Russia in the '90s, and in Argentina around 2002, when rubles in the first case, and dollars in the second, effectively disappeared. Occasionally one can even find some kind of currency beginning to develop: for instance, in POW camps and many prisons, inmates have indeed been known to use cigarettes as a kind of currency, much to the delight and excitement of professional economists. But here too we are talking about people who grew up using money and now have to make do without it - exactly the situation "imagined" by the economics textbooks" (p. 37 of Debt)
Further, the second place where Graeber notes that barter tends to emerges are precisely in those cases where different groups have no established societal relationships, and are thus exceptional to almost all well established societies - as exactly in a case like Columbus meeting natives:
"True, barter does sometimes occur between people who do not consider each other strangers, but they're usually people who might as well be strangers-that is, who feel no sense of mutual responsibility or trust, or the desire to develop ongoing relations. The Pukhtun of Northern Pakistan, for instance, are famous for their open-handed hospitality. Barter is what you do with those to whom you are not bound by ties of hospitality (or kinship, or much of anything else)" (p.33).
Which is all to say that the two examples used above are very much exceptional, and exactly what one would expect if the anthropological understanding of debt holds.
The article doesn't claim that barter never _existed_. It claims that there's no known case where it was a _precursor_ for money. In both examples you mentioned, people involved were already familiar with money, and used barter as a replacement - not the other way around.
Barter existed, it was just mostly only used between people who didn't know or trust each other, eg traveling merchants. Graeber specifically addresses this in his book.
For instance the Pharaoh was in need of cedar wood, so he would write to the King of the Assyrians in Sumerian (the lingua franca of the time) "Dear cousin, I would like to send you some gifts but I'm out of boats. Cheers, Ramses".
To which his "dear cousin" would reply "Dear cousin, I'm sending you these cedar logs so that you can build these boats you need. Did I tell you that drought has hit Niniveh and the corn is scarce? Yours, Sennahcherib". Then Pharaoh would send back boats full of grain, and so on.