A very interesting article. How would you categorise the emergence of spontaneous currencies, such as the well-known use of cigarettes among WWII POWs? Obviously no government involved!
Anything can be money as long as it is accepted as payment. There is a pyramid of 'moneyness'. At the bottom would be things like the IOU from your neighbour you got because you cleaned their gutters for them. At the top is state money. The higher up the pyramid the more acceptable it is to a wider audience. Everyone accepts state money (assuming they stay in that country). WWII POWs accept cigarettes as money in the camps. But the local supermarket won't once they get home after the war.
Credit and barter are not mutually exclusive. Commodity money is a thing and it did replace barter, not in domestic markets but in foreign trade. The flaw in the metallist story is it does not make that distinction, in fact it ignores the (usually) prior existence of domestic credit-based money and tries to tack it on as a late degenerate development.
From the earliest times there were attempts to unify the inside (credit) money and the outside (commodity) money. Initially this was done by setting a fixed exchange rate, then by minting gold coins denominated in a unit of account, then by a gold standard. The latest effort--the Euro--ditched the gold and replaced it with rules.
These hybrid monies are tantamount to pegging the exchange rate which causes ructions in the domestic economy and they eventually have to be abandoned--for a while. As you say, there is a deep ideological need to do this so they always try again.
A very interesting article. How would you categorise the emergence of spontaneous currencies, such as the well-known use of cigarettes among WWII POWs? Obviously no government involved!
Anything can be money as long as it is accepted as payment. There is a pyramid of 'moneyness'. At the bottom would be things like the IOU from your neighbour you got because you cleaned their gutters for them. At the top is state money. The higher up the pyramid the more acceptable it is to a wider audience. Everyone accepts state money (assuming they stay in that country). WWII POWs accept cigarettes as money in the camps. But the local supermarket won't once they get home after the war.
Credit and barter are not mutually exclusive. Commodity money is a thing and it did replace barter, not in domestic markets but in foreign trade. The flaw in the metallist story is it does not make that distinction, in fact it ignores the (usually) prior existence of domestic credit-based money and tries to tack it on as a late degenerate development.
From the earliest times there were attempts to unify the inside (credit) money and the outside (commodity) money. Initially this was done by setting a fixed exchange rate, then by minting gold coins denominated in a unit of account, then by a gold standard. The latest effort--the Euro--ditched the gold and replaced it with rules.
These hybrid monies are tantamount to pegging the exchange rate which causes ructions in the domestic economy and they eventually have to be abandoned--for a while. As you say, there is a deep ideological need to do this so they always try again.