Several questions regarding tribes, war, and currency

[Masada]

that is right, because gems, rice, dates, is see as another commodity so the trade of it is more seen as trading two different commodity (barter) then it function as currency. But take for example how about shell, metal, arrow head?

There is no functional different between using dates and shells as a unit of account.

 

[Traitorfish]

I'm aware of all that. What I'm challenging is the notion that barter systems only exist in the absence of the availability of currency.

I think this discussion seems to be the result of some ambiguity of the term "barter system".

By "barter system", I'm specifically meaning a society in which barter is the primary means by which good and services are exchanged. Certainly barter existed before any recognisable monetary system, and you may describe that as "systems of barter", but that's generally something more limited and more peripheral to the overall process of social production than is generally implied by "barter system".

So also gold, silver and paper money used for these namely to form alliance, marriages, tribute.

The point isn't that social currencies can be used to obtain marriages, alliances, etc., it's that they have no other purpose. You could never take wampum down to the village market- which did not exist- and trade it for a roll of skins.

While we know also they use this primitive currency for salary, so practically this is their income. We can think Japanese koku for example, it just a form of daily income but they not really use it for real transaction, because 1 koku stand for 278.3 litres. Of course they not carry all of these rice in their pocket to go buy their daily stuff, while samurai who get a salary around 30 koku per month can be consider as poor samurai while a Shogun can have an income like 1 million koku per month. But the use of something that less functional like arrow head, shell, also metal in bronze age, it might be stand for something like modern paper money stand for. Because it have value when the society give value it don't have a special intrinsic function or value, the value depend on the consensus of the society to put or not to put faith on that object, just like paper.

I don't think that the koku really qualifies as a "primitive currency" simply because it was formally equivalent to a measure of rice. If that were the case, we'd say that the US dollar was a primitive currency until 1971, because until that point it was still formally an expression of the exchange of shiny rocks.

In Mesopotamia, Bahrain, etc they use metal and copper since 2000 bc. And again this object have every aspect to be a currency (coin), they are portable, last long, and can be accumulate. And yes seeing at the time it happen long time ago before western even set sail to trade with other civilization.

Actually, you don't really see coinage becoming widespread in the Middle East until relatively late, maybe the sixth of fifth century BC, and these seem to have first emerged in peripheral regions like Greece and then spread (for want of a better word) inwards. Instead what you tended to see was the use of precious ingots being used as backing for credit-systems. In fact, coinage only seems to have become generalised with Alexander's conquests, during which he cracked open the temple and palace treasuries and distributed these precious metals to his troops as payment.

 

[Masada]

By "barter system", I'm specifically meaning a society in which barter is the primary means by which good and services are exchanged. Certainly barter existed before any recognisable monetary system, and you may describe that as "systems of barter", but that's generally something more limited and more peripheral to the overall process of social production than is generally implied by "barter system".

I don't think the literature I've read makes the distinction or credits the two with being in competition. For example, Southeast Asian literature tends to stress that the two are good complements. The argument being that an area with both gives poor people more room to negotiate between local and not-local factors. Local crop failure? Use cash. National crop failure? Use kind. If one or the other breaks down that room is lost and the poor end up suffering.

 

[Traitorfish]

Well, presumably the reason that kind was prefered in inter-national trade was because there wasn't any currency that was accepted widely enough, would I be right? No "South-East Asian florin" or whatever. So that would still seem to fall under the same basic heading of "lack of currency", just with a few qualifications around "currency".

 

[Masada]

It was for the colonial period and survived into this century.

 

[Traitorfish]

I'm afraid I don't follow?

 

[Masada]

Peasants avoided over-exposure to cash which wasn't worth a damn if the markets were bare, and avoided over-exposure to barter arrangements which weren't worth a damn if the local harvest failed. The end result of which was almost universal contempt for wage labor among the peasants.

EDIT: Tax avoidance was another factor: one couldn't as a general rule tax exchanges between friends.

 

[Louis XXIV]

In Mesopotamia, Bahrain, etc they use metal and copper since 2000 bc. And again this object have every aspect to be a currency (coin), they are portable, last long, and can be accumulate. And yes seeing at the time it happen long time ago before western even set sail to trade with other civilization.

Actually, to be more accurate, they created an exchange rate between wheat and silver. The average person never touched a piece of silver, though. They still operated on credit first and foremost.

BTW, there seems to be a difference between inter-societal exchange and intra-societal exchange. Between societies, there were trade networks that almost always seem to be a barter system as opposed to a currency system (think of the triangle trade of slaves-sugar-rum, but this is common back to ancient Mesopotamia). However, the barter system was always far too inefficient for daily use between neighbors.

 

[Cutlass]

I think in the trade between more distant groups it would be more a matter of the trader who is doing the traveling will take with him as much as he can, trade it for the greatest value he can, and then take back with him as much as he can. So that doesn't tell you that only barter was involved, but rather it tells you that the traveling trader wasn't heading home with only currency, but rather to the best of his ability, goods.

 

[H4run]

Actually, to be more accurate, they created an exchange rate between wheat and silver. The average person never touched a piece of silver, though. They still operated on credit first and foremost.

BTW, there seems to be a difference between inter-societal exchange and intra-societal exchange. Between societies, there were trade networks that almost always seem to be a barter system as opposed to a currency system (think of the triangle trade of slaves-sugar-rum, but this is common back to ancient Mesopotamia). However, the barter system was always far too inefficient for daily use between neighbors.

Very good information thanks Louis. Seeking the reference of your comment I encounter something interesting :

http://factsanddetails.com/world.php?itemid=1514&catid=56&subcatid=363

I don't have time to read it now I just speed read it. But what I catch mesapotamia had an early form of currency money made by clay found in Susa around 3300 B.C.

 

[tokala]

For those interesed to delve deeper into the topic, here a book chapter dealing with the origin of currency(s), with special emphazise on ancient mesopotamia:

http://cas.umkc.edu/econ/economics/faculty/wray/papers/hudson.pdf

Excerpt:

Examining the records of Mesopotamia and its neighbours,
assyriologists have found that most records describe debt arrangements
for thousands of years before coinage emerged. Agrarian balances were
paid upon harvest, and commercial advances on the return of merchants
from their travels by sea or overland caravan. The line of development is
just the reverse of what the German Historical School more than a
century ago imagined to be the three-stage sequence from barter to a
monetized economy (whose watershed occurred with the development of
coinage), culminating in modern credit systems. (I review the pedigree of
this theorizing in Hudson 1995 and 2000b.) The primordial mode of
exchange was neither barter nor the use of money for on-the-spot
settlement, but debt. If anything, barter appears only as the final stage of
debt-ridden economies, most notably in the wake of the monetary
breakdown of the Roman Empire after the 4th century of our era, when
the landed oligarchy caused the state’s fiscal bankruptcy and society
succumbed to a prolonged debt crisis.

 

[sophie]

Rice was used as a system of currency for awhile in Japan. Really you should listen to Masada in this thread; he's the economic historian round these parts.

 

[H4run]

There is no functional different between using dates and shells as a unit of account.

I agree with you, even in muslim society specific trade of dates can be justify as usury or riba while stand for usury only stand for trading money (I can't give u the reference right now). But the things is because dates and rice been seen as another commodity (food) peoples tend to see it the trade of it like barter not as currency, while in some society it do use as currency.

 

[Masada]

But the things is because dates and rice been seen as another commodity (food) peoples tend to see it the trade of it like barter not as currency, while in some society it do use as currency.

You could say the same of gold to the Inka.

 

[ParkCungHee]

Peasants avoided over-exposure to cash which wasn't worth a damn if the markets were bare, and avoided over-exposure to barter arrangements which weren't worth a damn if the local harvest failed. The end result of which was almost universal contempt for wage labor among the peasants.

EDIT: Tax avoidance was another factor: one couldn't as a general rule tax exchanges between friends.

Huh...That makes a lot of sense and I'm going to have to look into how payments were made to Irish soldiers.

 

[Traitorfish]

Peasants avoided over-exposure to cash which wasn't worth a damn if the markets were bare, and avoided over-exposure to barter arrangements which weren't worth a damn if the local harvest failed. The end result of which was almost universal contempt for wage labor among the peasants.

EDIT: Tax avoidance was another factor: one couldn't as a general rule tax exchanges between friends.

Could you expand a little on how this worked? I'm honestly pretty crap on peasant economies, and I wouldn't want to go blundering in making assumptions just to maintain a point.

 

[Masada]

Basically, the idea requires that domestic and international prices diverge. Usually this is the result of the food-crop in an export orientated region failing. Because peasants still have to pay taxes they sell their food-crops onto an international market which doesn't reflect the changed local conditions. Peasants being sane individuals then withdraw from the market with whatever they have left and begin to trade among themselves to survive. They almost never do this with cash because there's no food to be bought. In areas where this was not uncommon peasants would continue to trade among themselves as a means of building up barter "credit" to be cashed in during the hard times. Townsfolk might also get involved: accepting the promise of an agreed amount of food in the future for goods or services rendered now. It was an effective means of negotiating the global market and a useful hedge against crop failure.

 

[Traitorfish]

How was this credit measured? Was it a precise thing- "Bobby owes Jimmy a chicken and two peppers"- or was there a common metric? (edit: I think "unit of account" is the term I'm looking for here.)

 

[sydhe]

Rice was used as a system of currency for awhile in Japan. Really you should listen to Masada in this thread; he's the economic historian round these parts.

I remember coming across this in a movie (perhaps The Twilight Samurai, though that seems rather late) where the status of a samurai was in how much rice he got in salary.

 

[innonimatu]

The seven Samurai, with the villagers hiring them for rice?