Neolithic and Bronze Age economies operated mainly on credit. Because of the time gap between planting and harvesting, few payments were made at the time of purchase. When Babylonians went to the local alehouse, they did not pay by carrying grain around in their pockets. They ran up a tab to be settled at harvest time on the threshing floor. The ale women who ran these “pubs” would then pay most of this grain to the palace for consignments advanced to them during the crop year. These payments were financial in character, not on-the-spot barter-type exchange.
As a means of payment, the early use of monetized grain and silver was mainly to settle such debts. This monetization was not physical; it was administrative and fiscal. The paradigmatic payments involved the palace or temples, which regulated the weights, measures and purity standards necessary for money to be accepted. Their accountants that developed money as an administrative tool for forward planning and resource allocation, and for transactions with the rest of the economy to collect land rent and assign values to trade consignments, which were paid in silver at the end of each seafaring or caravan cycle....Naked Capitalism
Michael Hudson: Origins of Money and Interest: Palatial Credit, not Barter
See also
Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
High Cost Economy
High Cost Economy
There’s an idea – deregulate the banks!
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University
7 comments:
Wow, very interesting.
I'm just skeptical about the evidence to support all his claims. I mean, it is not easy to understand and gather evidence about things that happened 3000 years ago...
He has a great bibliography. These are not just things he made up -- People have spent their lives researching this, and it makes good sense when you think about it. The most obvious thing ever is that money is an accounting of who owes whom, including first and foremost the government (society). Individuals, businesses, and governments of course try to game the system and become the creditors, but obviously this can only go so far. Eventually the debtors can't pay the creditors and the system has to be reset one way or another.
“not easy to understand and gather evidence about things that happened 3000 years ago...“
You should take a look at Evolution sometime...,
Evolution theory does not claim specific things such "DNA molecules made a sofisticated accounting based on credit instead of spot barter" or anything like that.
No just simple things like the development of our vision system...
(Which to my constant frustration didn’t include an eye in the back of our heads)
Complexity and detail are different things.
One thing is to claim "there was a complex Babylonian civilization around 2200 BC". The evidence is there: buildings, paintings, clay tables, written language, and so on. There is a lot of archaeologist findings (evidence) to support such a claim.
Other thing is to claim that "the fourth Babylonian king had a red mustache". It is a very detailed claim. However, it is not complex at all – it is just a claim about a mustache. It is hard to even know whether there was actually a king, or four kings, and it is even harder to know whether he fancied a red mustache or not.
Of course, it is not impossible to know that. It would require a lot of hard work and luck though. Maybe some clay tables, the assumed corpse of such a king and a lot of technology could bring a lot of useful evidence. Maybe not.
For example, archeologists and historians debate whether, by 3500 BC (if I am not wrong), Egypt had one or two kings. It depends on how you interpret some pottery art and the supposed red and white crowns depicted on them...
To make big claims about detailed things that happened so many years ago, you need big evidence.
There are mountains of historical evidence of this kind of activity, typically in the form of tithes paid to the church in the form of harvest, livestock, etc.
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