> 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.
Yes, my main concern has been to argue that the historical origins of money establishes little about the nature or workings of money today. Who would deny that the history is interesting in itself?
Still, although my knowledge of ancient history is pretty meagre, I would argue that even there it is not helpful to call money 'state money'. In ancient times as today, money circulated as part of a system in which states ('the state' is misleading) were part of the support system. If 'state money' means simply that it was minted and regulated by states, that is trivial and not denied by anybody.
> 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!"
Coinage didn't arrive into a monetary vacuum in archaic Greece, though. It arrived into a social environment with pre-existing standards of value (e.g. cattle in Homer, various metals) and media of exchange such as bullion and metal objects. It's not that it arrived into a barter situation with people exchanging all kinds of different objects, but that coins displaced less convenient, less standardised means of exchange. As standards of value, coins were absorbed into existing networks of relative value. The early coins of the area were denominated in terms of metallic weight, and often exchanged on the basis of their metallic composition between currency zones (often, for electrum, with its uncertain gold/silver composition, at a discount.) Thus the power the state had over money simply in virtue of minting it was quite limited. The classical stories of Smith and especially Marx don't seem that off-base.
There's a reason why chartallists tend to go back to Babylon, rather than Greece - because there the state had much more control over production, and exchange was less important.
> 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.
Scratch 'military needs', though, and you find commercial interests, surely. The Greek navies took off defending colonies and trade. The Athenian owl (and the ascendancy of Athens more broadly) has as much to do with the fortunate proximity of abundant silver mines as to any innovation in minting. If the state's control of the mint gave it control over money as such, the flows of tribute would not have been as important as they were. The relationships between militarism, money and trade were systematic, with feedback mechanisms, not one-way.
> 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.
I don't really see it as a gestalt shift. Surely the relative importance of 'political' and 'economic' factors, and their interrelationship have been the bread-and-butter debates of ancient political-economic history since Marx and Weber? The military link is hardly original to Graeber. (I'm sure he wouldn't claim it was.) The way the legions spread monetary exchange across the Roman Empire is a classic idea of the economic history of Rome - as Michael Mann describes it in his survey in 'Sources of Social Power', 'the military multiplier' and the 'legionary economy'. Surely the state was extremely important there - but it could hardly have paid the legions in bits of metal if these things didn't already circulate as money. The growth of the Roman Empire fed and widened the sphere of monetary exchange, but the state itself did not control the value of money - as witnessed by periodic inflations.
My aim has not been to say that everything is ultimately explained by the economics, whatever that might mean, but to argue against the idea that money is mainly a creature of the state. Instead, my position is that states have always been parts - no more, no less - of social systems sustaining the circulation of money and commodities. The systems have seen great change over time so that conclusions drawn from one period might be quite misleading regarding another.
Mike