“The real history of markets is nothing like what we’re taught to think it is.”
This pretty much sums of Debt by David Graeber. He starts by questioning and debunking what he calls the “Myth of Barter,” which is the foundation of our understanding of the modern market. It’s definitely what I learned about in school and have been espousing ever since. The barter story basically states that people used to barter their goods until it became too cumbersome, and then money was introduced. Governments then come in to tax.
Graeber says this is completely backwards and that it leaves out a very important aspect of personal transactions – debt. He states that taxes were actually a way for kings (government) to get markets up and running. For example, a king could supply his army with coins and then demand a portion of those coins back from the general populace. This would mean the general populace would have to provide food, clothing, services, etc in which to win the soldier’s money so that it could then be paid back in taxes. This was an easy way to create a market and have the populace supply needs rather than the government supply all needs.
This book shook so many of my assumptions, with the barter story (myth) being one of the biggest assumptions. I have undergraduate and graduate business degrees and the barter story was the foundation of our understanding of economic models as well as our modern economy. For this to be called into question quite persuasively has left me in a kind of daze.
Debt was fascinating. Graeber bounced around countries, time periods, and views of money and debt in a way that left my mouth agape. This is an important book, if for no other reason to shake up a common story we never even question. This was the first I had even heard that there might be another origin of money.
Seth Godin suggested this book in Tools of Titans. In the podcast episode interview of Godin by Ferriss, Godin says he likes listening to the audio version of this book as opposed to reading it. I read it but think it would be good to listen to it some day as well. I think I will be re-reading this book again in the not too distant future.
This is book 44 of 52 of the 2017 Books of Titans reading list.