Thursday, February 16, 2012

Graeber and Debt (5)

During times of war or social tumult, trust naturally declined. Coins become more important to support trade during a time when no one knew who could be trusted.

If we look at Eurasian history over the course of the last five thousand years, what we see is a broad alternation between periods dominated by credit money and periods in which gold and silver come to dominate—that is, those during which at least a large share of transactions were conducted with pieces of valuable metal moving from hand to hand. Why? The single most important factor would appear to be war. Bullion predominates, above all, in periods of generalised violence. There’s a very simple reason for that. God and silver coins are distinguished from credit arrangements by one spectacular feature, they can be stolen. A debt is, by definition, a record as well as a relation of trust. Someone accepting gold or silver in exchange for merchandise, on the other hand, need trust nothing more than the accuracy of the scales, the quality of the mental, and the likelihood that some will be willing to accept it. In a world where war and the threat of violence are everywhere, there are obvious advantages to making ones transactions simple. (Graeber p.213)
An unrelated comment about tally sticks is very interesting.
One of the most important forms of currency in England in Henry’s time were notched ‘tally sticks” used to record debts. Tally sticks were quite explicitly IOUs; both parties to a transaction would take a hazel wood twig, notch to indicate the amount owed and then split in half. The creditor would keep one half, called “the stock” (hence the origin of the term stockholder) and the debtor kept the other, called “the stub” (hence the origin of the term “ticket stub”. (Graeber p.45)
Overall, an interesting book.

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