Robert Leonard's "Curious Currency"

I was disappointed not to see an advance in the scholarship since the first edition of 2010. Make no mistake: this little book is very scholarly. An impressive 495 footnotes support the 126 octavo pages of text and about 250 illustrations (some are composites). But we all have our passions and prejudices. 

I am passionate about the research of Denise Schmandt-Besserat which tied the origins of writing and the invention of numbers greater than three to the creation of clay tokens in the Fertile Crescent of the Middle East circa 7500 BCE. Though not traded as money or gifts, the tokens served an economic purpose: they recorded debts. 

Curious Currency: The Story of Money
from the Stone Age to the Internet Age;
2^ndEdition by Robert D. Leonard, Jr.;
Whitman Publishing, 2019;
153+vi pages; $16.95.

That reinforced my prejudice for the research of David Graeber. Debt: The First 5,000 Years (Melville House, 2011) completely overturned our common imaginings about the origins of money. Those airy theories were shared by both Karl Marx and Ludwig von Mises. Marx at least relied on the best scholarship of his day. Mises just ignored the facts.

Trade did not originate with economic calculations of surplus. Money did not originate with trade for profit. Money did not evolve from barter. Coins did not evolve from money. 

Trade began as ritual gift exchange. Often it was the giving of a tangible to acknowledge an intangible based on social status. No example is known of a society that moved from barter to money, but many examples show that barter is what people resort to when money fails. Money as we understand it began with the payments of debts for torts. Coins began as honorary awards. Robert Leonard’s rich monograph supports those assertions. I am only sorry that he did not make them explicitly. 

I believe that Chapter 1, “What is Money?” is contradicted by the text. Leonard writes: “In simplest terms money is ‘anything used to make a payment that the recipient trusts can be reused to make another payment.’ This includes items used as money only for special purposes or situations, such as bride-price, funeral offerings, heiliges geld (offerings made to propitiate deities), trading with Westerners, or usage only by native chiefs. Among those bride-price is payment made to the bride’s parents as compensation for their loss of her valuable work services.” (Page 2) 

Obviously, of the items listed, none is an example of any expectation of further exchange. Bride-price is a case in point. The material offering only completed the social bonding of the families by the marriage. Calculating the labor of the bride eventually evolved thousands of generations later and in only in some places and times, not universally. Of course, the complement of bride-price is dowry. If bride-price is meant to be the result of an economic calculation that is carried out in money objects, what moneys are accepted as dowry; and if her labor is valuable, why is dowry being offered? Clearly, the complicated social context explains what appears to be a mere financial transaction. 

I also believe we all use the word “money” too readily to mean things that are not money. By analogy, I point to our confused speech about power, energy, and work, or velocity and speed. Generally, no harm is done, but physicists are not so casual. And as numismatists, we should communicate clearly about money, currency, and exchange.  Perhaps numismatists should convene an online standards committee to define our terms.

For a small book, Curious Currency delivers a lot to think about. We easily call it “coin collecting” even though numismatics is the art and science that studies all of the forms and uses of money. This dense little book is about the forms that “money” (exchange objects, ritual gifts) has taken over the thousands of years of human society. Of necessity, this is a broad topic, potentially encyclopedic in scope. Robert Leonard makes the information load manageable by wrapping the stories and narratives into convenient chapters based on those broad themes. 

After an introductory overview, the chapter titles are Raw Materials, Useful Articles, Ornaments, Customary Objects, and Money Substitutes. Coins fall under “raw materials” because they were valued as metal. But silver, gold, copper, bronze, and iron must take their place alongside obsidian and flint which also were money. Coins also appear under “customary objects” along with elephant tails, woodpecker scalps, and human skulls. 

Whiskey, tobacco, tea, cocaine, and postage stamps are considered “useful articles.” Beads of coral, jade, glass, clam shells, cowry shells, silver, and turquoise, arm rings, neck rings, anklets, and many kinds of necklaces are “ornaments” of course. 

That almost anything can be used as money underscores the broad extent of society and culture. Therefore, it may be perfectly fine that the book closes with examples of “nothing” as money. RFID transceiver chips that you wave at a gasoline pump, cellphones as proxies, and cybernetic cryptocurrencies bring the reader near to—but not at—the end of the story of money. 

Overall Curious Currencyis an excellent treatment of a complex and difficult subject. The book is easy to read and worth every minute. 

PREVIOUSLY ON NECESSARY FACTS

Acccounting for Civilization 

Debt: the Seed of Civilization 

Numismatics Informs Economics 

Numismatics: the Standard of Proof in Economics 

Supplies and Demands 

Happy May Day, Comrades

"Defending Capitalism Against Ayn Rand" by Steven Farron on Liberty Unbound, the website successor to R. William Bradford's print magazine, challenges mainstream Objectivism on what it means to be a capitalist.  Farron's thesis is that Ayn Rand was deeply influenced by the grand ideas of the Bolshevik Revolution while capitalism is really concerned with the seeming trivialities of life such as soap and lipstick. 

The essay resonated with me because from my first reading of The Fountainhead in 1966, it was obvious that Howard Roark was some kind of beatnik.  "He pulled his clothes on: old denim trousers, sandals, a shirt with short sleeves and most of its buttons missing."  At one of several crossroads in the story, we meet his antithesis, Hopton Stoddard, a mushy man, terrified by religion, and successful in several lines of business including real estate and contraceptives.  

The heroes of Atlas Shrugged could have continued living materially very well from page one if they just put up with some inconvenient government regulations.  But as The Internationale tells us: "You have nothing if you have no rights."

The Internationale

modern English lyrics

by Billy Bragg

Stand up, all victims of oppression,
For the tyrants fear your might.
Don't cling so hard to your possessions
For you have nothing, if you have no rights.

Let racist ignorance be ended
For respect makes the empires fall.
Freedom is merely privilege extended
Unless enjoyed by one and all.

Chorus:
So come brothers and sisters
For the struggle carries on!
The Internationale
Unites the world in song.
So comrades come rally
For this is the time and place!
The international ideal
Unites the human race!

Let no one build walls to divide us,
Walls of hatred nor walls of stone.
Come greet the dawn and stand beside us;
We'll live together or we'll die alone.
In our world poisoned by exploitation,
Those who have taken, now they must give.
And end the vanity of nations;
We've but one Earth on which to live.

And so begins the final drama
In the streets and in the fields.
We stand unbowed before their armor.
We defy their guns and shields.
When we fight, provoked by their aggression,
Let us be inspired by like and love.
For though they offer us concessions,
Change will not come from above.

You can find many montages on YouTube.  

This is my favorite so far.

Also on NecessaryFacts

Workers Paradise Promised an End to Money

Tokens of Capitalism

Republican Rebels

That goddam Ayn Rand Book

Supplies and Demands

From "Inspired Business" 
http://www.inspiredbusiness.eu/

In Economics 101, the Supply curve and the Demand curve are displayed.   The point where they intersect is called “equilibrium” where the most efficient allocation of resources is claimed to occur.  This ignores the fact that every point on either curve represents a choice, an exchange of a lower valued good (or service) for one of higher value. 

On each curve, the quantity demanded (or supplied) changes. But where they intersect is only one such point. The other choices do not disappear. People are still demanding and supplying all along both curves.

The danger – the tragedy – is that claiming that the intersection of these two curves indicates a special equilibrium. This causes those in political control to believe that they should or must force all supplies and demands to be at this point.  Interest rates are raised or lowered; money is created (rarely destroyed); tax laws are written or rewritten. In some societies criminal penalties are enacted and enforced for prices other than the approved one.

At the very least, and as the foundation of the wrongs cited above, economists teach that any other price except the equilibrium is inefficient and thus markets are not perfect. 

The curves should be called "Supplies" and "Demands" and their intersection should called the "modal point."  This is where "most" trades take place.  But nothing else is special about it. 

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Karl Marx and the Dustbin of History

Like the death of Mark Twain, the imminent passing of capitalism has been predicted (or reported) for 150 years. 

Plotting the past and future of humanity is an old hobby.  In the Dialog "Cratylus", Plato recounts the story from Hesiod (Work and Days) that once, there was a Golden Age but continuous devolution has brought us to the Fifth Age, the Age of Iron, the age of war and injustice.  This, of course echoes the Eden Myth, that once upon a time, we lived in a paradise, but by our errors, we lost it.  Christianity promises a return to Paradise in the Afterlife for God’s “chosen” who find Salvation through His Son.  Karl Marx and Friedrich Engels secularized the myth by wrapping it in economics.  Marx’s theories are well-known.  His influence is undeniable.  However, Marx relied on the works of others to develop and validate his theories.  Some of the source material was in error.  Those who followed Marx –especially Marxists – accepted his assumptions without reconsideration. 

• Marx did not question the labor theory of value.  But if labor alone gives value, we could get rich by digging holes and filling them up.  The most careful workmanship invested in the most beautiful and useful object is wasted if no one else wants it.   Modes of television were invented in the 1890s.  The first personal computer was the IBM 5100 from 1975, a solution looking for a problem.  Labor does not give value.  Value is perceived by the buyer.
• It is famous that Marx predicted his proletarian uprisings in England or Germany and that the first so-called “communist” or socialist nation was an agricultural hinterland. 
• When Marx predicted that the workers would obtain the modes of production, he was not thinking of employee stock option plans or employees forcing leveraged buy-outs of their operating divisions from the parent corporation.
•  Marx complained that capitalism destroyed the natural state of women for motherhood and homemaking.
•  Relying heavily on English history, Marx pinpointed the closing of common lands and the mass migration of former serfs into the cities to become proletarians.  But that, too, happened in Rome.  Moreover, Roman expansion, especially into Gaul, but also elsewhere, was specifically the founding of new towns surrounded by new farms – a process exhibited by the archaic (pre-classical) Greeks who colonized Middle Earth from the Crimea to Spain.  
• Marx thought that gold was the highest form of commodity money and that money originated as commodity exchange in indirect barter.  This view is shared by capitalist (libertarian) economists today based on its being accepted by the Austrian School of Carl Menger and Ludwig von Mises.  The historical record does not support it.  
• Marx’s theory of dialectic evolution is unvalidated (and in fact disproved) against the historical record of places not known to him, such as China, Mesoamerica, and Sub-Saharan Africa. 

Largely today, in American university classes in economics, Marx is relegated the margins of first year textbooks. The new center is held by Milton Friedman and the monetists.  Diametrically opposite Marx but also in the margins are the radical Austrians, such as Ludwig von Mises who advocate laissez-faire (which Friedman did not).   

In sociology, Marx still holds sway.  Criticisms from the left come from postmodernists who claim that there is no reality and even if there were you could not know it.  (Physicist Alan Sokol who exposed and discredited that "fashionable nonsense" is a Marxist.) There is no "right wing" - no school of individualism - in sociology, or at least, they are few and far between.  Organizations and Markets is a blog from sociologists who are influenced by the Austrian school of economics.  The four professors - Nicolai J. Foss, Peter G. Klein, Richard N. Langlois, and Lasse B. Lien - span two continents. 

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Debt: the Seed of Civilization
Venture Capital
Money as Living History
Workers Paradise Promised an End to Money

City Air Makes You Free