here - Guild of Independent Currencies

Federal Reserve Bank of Minneapolis website
Banco Central do Brasil website
Daily Telegraph, 20 October 2014
Why Barter appeals
• economics – barter theory can be modeled, with
money emerging spontaneously as an equilibrium
state;
• politics – barter theory excludes the state from money,
emphasizes role of market;
• ideology – barter theory preserves a sense of money’s
value (and scarcity) as paramount (and thereby
supports Austrian economics, sound money, etc.);
• populism – barter theory suggests that money is a
commodity or ‘thing’;
• intuition – barter theory is very easy to understand.
Money as tribute/payment
• Geld (money) derives from gild, (tax), and resonates with
the old Icelandic gjald (recompense, punishment, payment)
and the old English gield (substitute, indemnity, sacrifice)
• earliest forms of money were associated with violence and
religious sacrifice, e.g. in Eshunna, around 1930BC, fines
included 30 shekels of silver for destroying a person’s tooth
and ear, 60 for a nose and eye, and 40 shekels for severing
a finger
• Hudson: money originated in various forms of sacrificial
payment, debts, fines, tributes to religious and political
authorities, etc.
• so contra Menger, money was never payment between
equals
Money as primordial debt
• Bernhard Laum, Heiliges Geld (1924): money originated in
sacrificial practices that can be traced to Greek antiquity;
precise rules laid down governing quality of animals
deemed suitable as sacrificial payment to the gods: value
was measured by the ox unit
• Foucault, Lectures on the Will to Know (1970-1): for the
Greeks, money did “not emerge in the abstract sky of the
commodity and its representation, but in the game of
sacrifice and its simulacra”
• Seaford, Money and the Early Greek Mind (2004):
connections between coinage and sacrificial objects, e.g.
iron spits - obol (obolos) – ancient Greek coin of low value –
took its name from the spit (obelos), and “drachma”
originally meant handful of spits
Why tribute theory appeals
• better supported by historical evidence than barter theory
• naturalizes the idea that the state is the guardian of money
(chartalism)
• sustains the notion of money as debt
• connects money and ‘society’ (as a stand-in for God, ruler,
etc.)
• i.e. money originated as a debt to the gods => this debt
evolved as a debt to rulers and states => these are
surrogates for the idea of society
• explains money’s obligatory character
• resonates with various arguments about money, religion
and violence
Debt as a moral problem?
• rising personal and national debt
• in surveys, debt increasingly cited as a ‘quality of
life’ concern
• debt associated with self-harm
• debt-free existence idealised
• national debt frequently seen as an index of
moral rank (Greece)
• in the Eurozone, growing literature connecting
debt and ill health, including suicide
Georg Simmel
Money is a claim upon society.
The Philosophy of Money (1907)
• Homogenization of money – monetary unions,
dollarization, money-like financial instruments
(e.g. derivatives), ‘place-less’ money
• Diversification of money – local currencies,
Time Dollars, LETS, loyalty schemes, digital
monies
Money in Classical Social Thought
• Marx – money is the “universal agent of
separation”
• Weber – money is as “the most abstract and
‘impersonal’ element that exists in human life”
• Nietzsche - “the educated classes are being swept
along by a hugely contemptible money economy”
• Simmel - “The money economy enforces the
necessity of continuous mathematical operations
in our daily transactions”
However …
• Marx - money is “the bond of all bonds”
• Simmel – “money is a branch from the same
root that produces all the other flowers of our
culture”
Utopia as the absence of money
• More – the end of money means the end of
“fraud, theft, burglary, brawls, riots, disputes,
rebellion, murder, treason, and black magic”;
even poverty itself “would promptly disappear if
money ceased to exist”
• Plato – “Our society must have neither gold nor
silver, nor yet much making of profits from
mechanical crafts, or usury, or raising of sordid
beasts”
• Proudhon - “Let all merchandise become current
money and abolish the royalty of gold.”
Polanyi
• General purpose money – performs all
monetary functions and in all contexts
• Special purpose money – performs limited
range of monetary functions in limited range
of contexts
Time dollars
Spice time
credit
Bristol pounds
Bitcoin
M-Pesa
Zopa
The social life of money
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universal commodity form (Marx),
abstract social form (Simmel),
diffuse social medium (Zelizer),
social technology (Ingham),
instrument of collective memory (Hart),
generalized symbolic medium (Parsons),
social process of commensuration (Maurer)
communal illusion (Karatani)
Money is a process, not a thing
• Where its value comes from
– Circulation & exchange
– Acceptance
– “Anyone can create money… the problem is getting it
accepted.” (Hyman P. Minsky)
– Need (why use money x versus money y?)
• How it gets used
– Cash, plastic, wave and pay, microchip, etc.
– Design, appeal, symbolism
– Social experience (hug and pay?)
Local currency debates
• Economics – multiplier effects, local business
boost, etc. – but problems of measurement, users
are already committed to local economy, etc.
• Sociology – symbolic value of local currency,
marketing tool, enhances local identity, etc.
• General issues –
– how to measure impact,
– how to incentivize users,
– how to prevent hoarding