On Sun, 22 Jan 2012, Mike Beggs wrote:
> If a 'State theory of money' and/or a 'Credit theory of money' were just
> about what created money, it would be trivial.
This is not at all true when it comes to ancient history -- it's not trivial, it changes a lot.
And I think you've confirmed my suspicion about the source of the divide here, which is that you economists don't really care about ancient history. To you, it's "ancient history" in the perjorative sense. So for you, chartalism is important only insofar as it lends vague support to MMT, which you are against for reasons you've laid out surpremely well.
But if you deal with ancient history in its own terms, it matters a lot whether money is created by political institutions or grows out of barter. And that latter notion is everywhere still, esp. among those who consider themselves economic historians on whom the other historians rely. I was just listening to a very intelligent lecture series on Archaic Greece that (in the midst of very smart things about everything else) said exactly that: "And then Athens started coining money, the famous Athenian owls. And you can imagine how that helped the economy. It's so much easier than barter!"
The difference is the dynamics. On Graeber's argument -- which I think is entirely right -- money grew out of military needs, to which economic imperatives were subodinated. And that makes very satisfying sense because military imperatives were in general of more importance for making and unmaking class structures in the ancient world than economic imperatives. To take just the most famous (if exceptional) case, the rise of democracy in Athens wasn't driven by a "rising middle class," it was driven by a rising hoplite class. When hoplite warfare trumped calvary warfare, the class structure changed and the political structure had to change. And then later when trireme warfare became paramount, the class and political structure changed again.
The exception here was that it gave rise to democracy. What you get much more often in pre-modern history was chariots or mounted horse warriors giving rise to an aristocracy or settler infantry giving rise to a bureaucratized monarchy.
One more interesting passing footnote BTW. In the Athenian case, the original "credit" money (virtual money, if you prefer, and I think you've convinced me) that preceded the very first archaic coinage wasn't created by the city states or the temples. Rather it seems to have been created by Archaic Greek piracy. It was a system for dividing up shares. And contra the lecturer I was listening to, the coining of money in small bits seems to have been driven by precisely this process, to hand out the shares at point of embarkment rather than running up virtual accounts. The agora itself on this argument started out as the place where shares were divided.
It's just one case, but still, if borne out (it's still in dispute, but dominant IIUC) it suggests that even if we accept that money has never grown out of barter, it doesn't necessarily follow that it grew out of the state. It can grow out of self-managed pirate collectives :-)
Lastly, even if Graeber doesn't always keep this clear, for me, the implications of this gestalt shift of the ancient past, for how we understand the present, shouldn't be looked for through economics directly. Its rather about military dynamics and state-to-state power relations -- imperialism, to be blunt -- and how there are areas where those extra economic dynamics systematically trump economic considerations in ways similar to the ways they always have.
Obviously nowadays (as opposed to ancient times) when it comes to ulimate causes, we're almost always looking for economic imperatives. But there are exceptions, and sometimes exceptions are important. Schumpeter argued in his essay "Imperialism" that late imperialism made no economic sense, it cost more than it profited, and was driven by atavisms. He might have hit that half on the head. The difference being the atavisms in question are a slightly different set than he thought; and the fact that they are atavisims doesn't mean they'll go away.
Max Weber