Wednesday, March 30, 2016

Lord Keynes — George Selgin versus David Graeber on the Origin of Money


Who has the evidence?

Social Democracy For The 21St Century: A Post Keynesian Perspective
George Selgin versus David Graeber on the Origin of Money
Lord Keynes

14 comments:

Bob Roddis said...

Lord Keynes" totally concedes concerning what I just said yesterday (only because he was unaware that I said it).

http://mikenormaneconomics.blogspot.com/2016/03/chris-miller-russia-considers-how-to.html

Tom Hickey said...

Selgin: (1) that just because there is no modern anthropological evidence for pure barter economies, it does not necessarily follow that these things did not exist in the distant past before money was invented.

This just says that absence of evidence is not evidence of absence. That is, we don't know one way other another. It cannot be used to advance a position that makes an affirmative or negative claim.

It doesn't advance the debate or speak for the barter theory. On the other hand, there is lots of evidence for the credit theory.

Arguing from what may have been the case in prehistorical times, Erich von Daniken's theory of the ancient gods as aliens from outer space as presented in Chariots of the Gods might be the case.

LK said...

Bob Roddis@March 30, 2016 at 6:59 PM:
"Lord Keynes" totally concedes concerning what I just said yesterday"

Oh, for christ's sake, are you still trolling this blog, you **#@#^* d*ickwad?

"Based upon Bob Murphy’s outstanding criticisms of David Graeber and the latter analysis of Murphy by “Lord Keynes”, there is NOTHING WHATSOEVER in this so-called anthropological analysis that contradictions Austrian analysis in the slightest"

B.S. Menger's 1892 article “On the Origin of Money” is badly contradicted by evidence that commercial money has emerged from:

(1) ceremonial goods/non-commercial money that was originally prized as a prestige good, or for magical power, etc. and used mainly for social reasons.

(2) non-commercial money used in wergild and other penalty systems.

(3) an abstract unit of account imposed from above by ancient government-temple states using weight units of metal from their economic planning systems.
-----------------
These do contradict those lunatics like Mises and Rothbard:

“[sc. Mises’s] Regression Theorem also shows that money, in any society, can only become established by a market process emerging from barter. Money cannot be established by a social contract, by government imposition, or by artificial schemes proposed by economists.” (Rothbard, M. N. 2009. The Essential von Mises. Ludwig von Mises Institute, Auburn, Alabama. p. 61).

Rothbard is wrong.

LK said...

Bob Roddis@March 29, 2016 at 7:29 PM:
"Again, you simply do not understand Austrian analysis. "

No, YOU don't the first thing about Austrian theory, you bloody idiot.

Here are examples of your totally comical inability to even understand basic Austrian concepts:

"A 20 year unsustainable Keynesian boom would have had ‘market clearing prices’ for 20 years right up until the bottom drops out.”
http://mikenormaneconomics.blogspot.com/2013/01/lord-keynes-debunking-austrian.html?showComment=1359199941427#c5328116548878528365

“a particular model car is flying out the show room doors and that the manufacturer cannot meet demand. … When those sales are made and sustained due to artificial credit creation, the sales are at “market clearing prices” until the bust occurs."
http://consultingbyrpm.com/blog/2016/02/join-liberty-classroom-get-free-choice.html#comment-1650419

LK said...

" In order to engage in significant commercial activity WITH STRANGERS AND FOREIGNERS, one requires a medium of exchange that all parties to the transaction deem valuable AND know that other third parties will also deem valuable in the future. "

No, they don't. The anthropological evidence shows that in large parts of the world for centuries and centuries people simply used barter in long distance trade and never invented money.

A. H. Quiggin in A Survey of Primitive Money: The Beginnings of Currency:
"Barter develops between areas of contrasted produce, such as coastal and inland, forested and open country. We see the barter of fish or shells for vegetables, game for bananas, &c., in Melanesia or the Congo, and the establishment of regular markets. Trading voyages such as those of Torres Straits and New Guinea take us a stage further by the introduction of conventional presents. But so far there is no need for any medium of exchange such as is commonly described as money.

This is the state of affairs over about half the world at the present day. Barter suffices for most of the natives of Australia, New Zealand and the islands of the Pacific, and for the less-advanced peoples of Africa, Asia and the Americas, where native economy is not upset by the trader and the missionary."

Quiggin 1949: 321.

Ralph Musgrave said...

Barter is around us all the time. E.g. much of the trade between East European countries prior to the collapse of communism was on a barter basis, rather than for cash. And the typical husband / wife relationship is barter writ large. One partner performs on lot of services (housework, gardening, etc) and the other often concentrates on a different set of services.

Neil Wilson said...

Ultimately this all boils down to missing the point.

Money is a mechanism for settling debts - promises. We settle debts by swapping them for another debt we prefer, or for real things we prefer.

Eventually sophistication gets to a point where the underlying settlement rarely happens. You see this all the time in option trading where for the majority of contracts delivery never occurs in the underlying.

Arguing about ancient history is good history, but it doesn't necessarily inform the present that much.

Brian Romanchuk said...

Neil - I think the only reason non-historians care about this is the argument by free marketeers along the line that gold is "naturally money". That is, without the gummint, we would be back to gold and silver coins.

When you are stuck in debates with loons, you end up discussing loony ideas.

Matt Franko said...

" that these things did not exist in the distant past before money was invented."

"money" being a figure of speech (metonym) derived from the name of a goddess from the defunct Roman pantheon logically could not have been invented before the fall of Rome...

You have to go back into the historic writings/manuscripts and try to find a word from before the fall of Rome that is ALSO a figure of speech (metonym) that is used in those lexicons that would have represented what we today often TRY to define as "money!"...

TIP: save yourself some time the word is not there...

Matt Franko said...

Wittgenstein: "Language is a part of our organism and no less complicated than it."

Wittgenstein: "Philosophy is a battle against the bewitchment of our intelligence by means of our language."

Paul of Tarsus: "Have a pattern (stencil) of sound words..."

Hedges: "Mortgages are underwater because of 2008!"

Franko: "Whaaaaaattttt?????"

Matt Franko said...

""By virtue of voluntary convention nomisma has become the medium of exchange. We call it nomisma, because its efficacy is due not to nature but to nomos (law), and because it is always in our power to control it." — Aristotle, " Ethica."


These arguments we are having are not new...

The word "money" has come in to confuse the issue or as Wittgenstein put it "bewitched our intelligence" .... we need to listen to Wittgenstein here and understand what is being done to us via this word "money" ....

but the arguments between 1. using a device as a medium of exchange that gets its efficacy deterministically via law or 2. gets its efficacy stochastically via nature .... apparently have been going on since recorded history...

FD I am 100% determinist/authoritarian....



Bob said...

Money is a means of exchange - I'm sticking with that definition.

Simsalablunder said...

"These arguments we are having are not new..."

Which only shows that some people knows how to do coherent thinking while others don't, and that it's the case through out history. Giving cred to those who don't because history shows a stream of incoherent thinkers is of course incoherent thinking.

Detroit Dan said...

Thanks to LK for a great review of the history of money, and to Tom Hickey for bringing it to our attention.