The Big Idea: Avoid excessive debt. Protect debtors. The evolution of economies from barter to markets is a myth.
-It’s a myth that money evolved out of barter.
-Outsid of distrustful exchanges, primitive markets exchanged goods primarily using credit/debt.
-Money and violence are inextricably linked in history.
-Historically, there were often periodic debt cancellations across an entire economy.
-Coins were invented independently in Eastern Mediterranean, Andes, and China to facilitate taxation and create markets. The state would pay soldiers in coins. The soldiers would buy food from locals using coins. The state would extrat taxes from the locals payable only in coins.
-Philosophy and religion accompanied the growth of coinage. Religions arise largely as peace movements against the empires that are using coinage. Graeber calls this “the military-coinage-slavery complex.”
-Ancient coins are always found near the sites of ancient armies.
-In the Middle Ages, empires dissolved, the world’s religions took back on the coins into churches and monasteries, and the world went back to credit systems, using virtual money.
-Many of the free market principles Adam Smith writes about came from Medieval Islam.
-United States went off the gold standard in 1971. Credit cards and cashless transactions took off. Capital became financialized. Historically, systems of virtual money (like we have now) had mechanisms to protect debtors (eg. debt cancellations, anti-usury laws.) However, our modern systems (IMF, S&P) protect creditors against debtors.
-The position of the USD as the global reserve currency is contingent on US military power and the willingness of client states to purchase US govt bonds.