What is the origin of MONEY
This essay will briefly discuss the main points of David Graeber's article and analyse its significance as well as purpose, and then critically point out its strengths and limitations. This essay argues that Graeber's anthropological study of the origins of money is very revolutionary, successfully demonstrating that traditional economics has been reversing the historical sequence of money and credit, and convincingly analysing the nature of money as a tool for quantifying debt. But David Graeber's argument of denying the relationship between transaction and origin of money is too radical and lacks sufficient both factual and logical evidence.
In this article, Graeber challenges the traditional economics history of money. In the traditional narrative, the earliest human markets unfolded in the form of (direct) barter, and after discovering the inconvenience of this, humans introduced a more common medium, money, and only thereafter, to reduce the use of money, did they introduce the instrument of credit. But according to much archaeological and anthropological evidence, Graeber points out that there was no such thing as barter in primitive societies; nor was money a substitute for barter, but rather an invention of the Sumerian (or Egyptian) clergy for more efficient taxation and wealth accounting. By rewriting the history of money and retracing its origins, Graeber can go beyond the overly neutral representation of money in traditional economics and thus politicise it. When one realises that "A history of debt, then, is thus necessarily a history of money" (pp. 21), one will think deeply about the nature of "money" and "debt", which essentially reflect a credit relationship. And behind credit is often power. The author also aims to reveal that money and power have alienated responsibility into debt, and that the concept of price and the market have destroyed the nature of human beings to care for each other, thus inspiring the reader to think: Is there another way of living besides capitalism that would allow us to better achieve "happiness"?
The author's counterargument to barter is easy to understand and very convincing, as he explains that people borrow other people's surplus goods, using their credit as a guarantee, and return them at a suitable time with other goods. Such sort of trading relies on various kinds of debt. This view of Graeber is more theorised by Kiyotaki and Moore (2002), who argue that to avoid the physical trading frictions in direct barter, people choose to trade dated-goods, which is possible because of the credit and debt relationship.
However, Graeber seems to misunderstand the role of his new interpretation of transactions in primitive societies. It does not so much overturn but enriches the idea that transactions gave rise to money. Direct barter, which in traditional economics is so abstract and so unworkable, existed only in the conceptual world. Only indirect barter, mediated by debt, existed in the real world. After that, the more quantifiable general equivalent, money, was created. Barter and money still have a deep connection. Such a history of money does not break through the traditional framework, that is why Graeber goes the other way, questioning the fact that transactions in primitive societies can give rise to money as a means of saving, and then further argued that "'money' in this sense is in no way the product of commercial transactions. It was created by bureaucrats to keep track of resources and move things back and forth between departments"（pp. 39）. The evidence to support this conclusion comes from the accounting system of the ancient Sumerian temples.
While there still are some problems with Graeber's argument here. First, the debt-based transactions of primitive societies were a ‘time exchange’, so the medium was also a combination of a unit of account and a means of storing value (Kuroda, 2007[2003]). Secondly, the evidence of the Sumerian accounting system does not support Graeber's assertion very well but can even be used to refute it. David points out that in this system the basic unit of currency, the silver shekel, needed to be pegged to one gur, or bushel of barley, and the temple used barley as the basic unit in settling labour wages (pp.39). This implies that even though the monetary status of the precious metal was required for the distribution of resources by the powers that be, barley's status as a currency was already established before that, and Graeber lacks evidence to refute that barley's status was established in commercial trade. Sumer was effectively a dual currency system at the time. In addition to barley, many other monetized agricultural commodities (like cattle and agricultural tools) were used to denominate in the credit system in Sumerian civilisation (Long, 2020). Moreover, the Sumerian example is only a piece of isolated evidence, and its universality is doubtful. Even if we simply carry out a logical derivation, we will also question that without trade, will there be universal loading behaviour (Wei, 2014)? A more acceptable explanation is that the birth of money was not just a one-time occurrence in the archaic period, but an iterative process. A good was able to function as a currency through a loose agreement between people in a geographical area and was then established as a system (Kuroda, 2007[2003]).
In general, nonetheless, I was impressed by the author's attempt to re-historicize the history of money. Through extensive anthropological and archaeological research, Graeber debunks the fallacy of barter in traditional economics and corrects the relationship between the credit system and money. More importantly, the author exposes the deeper relationship between money and credit as well as power. Regardless of whether money was born in private trade or not, it is certain that its early large-scale use did not serve cross-regional commerce, but rather the needs of power and religious institutions for tax collection, accounting, and social services. Whereas the author's rewriting of the history of money is too radical, and the complete rejection of the relationship between money and trade implies a wholesale denial of the neutrality of money. Such a judgment is as biased as traditional economics, and money is not only power, but also neutral in its role as the medium of exchange, the unit of account, and the store of value in many contexts.
