1/25/12 - money made from wood

In today's excerpt - money has been made from strange things -- wood, leather, tobacco leaves, salt, ceramic tiles and a wide variety of other materials. This reflects money's origin as a token of debt, an agreement to pay based on trust in the issuer of the coin -- as opposed to the inherent worth of the coin. Even coins made of gold or silver would usually trade at a premium to the value of the metal -- reflecting trust in the strength of the king/money-redeemer who issued the coin:

"Within the Roman empire, a silver coin stamped with the image of Tiberius might have circulated at a value considerably higher than the value of the silver it contained. Ancient coins invariably circulated at a value higher than their metal content. ...

"Within a community -- a town, a city, a guild or religious society -- pretty much anything could function as money, provided everyone knew there was someone willing to accept it to cancel out a debt. To offer one particularly striking example, in certain cities in nineteenth-century Siam, small change consisted en­tirely of porcelain Chinese gaming counters -- basically, the equivalent of poker chips -- issued by local casinos. If one of these casinos went out of business or lost its license, its owners would have to send a crier through the streets banging a gong and announcing that anyone hold­ing such chits had three days to redeem them. For major transactions, of course, currency that was also acceptable outside the community (usually silver or gold again) was ordinarily employed.

"In a similar way, English shops, for many centuries, would issue their own wood or lead or leather token money. The practice was often technically illegal, but it continued until relatively recent times. [In] an example from the seventeenth century, a certain Henry, who had a store at Stony Stratford, Buckinghamshire, ... would provide small change in the form of IOUs redeemable at his own store. As such, they might circulate broadly, at least among anyone who did regular business at that shop. But they were unlikely to travel very far from Stony Stratford -- most tokens, in fact, never circulated more than a few blocks in any direction. For larger transactions, everyone, including Henry, expected money in a form that would be acceptable anywhere, including in Italy or France.

"Throughout most of history, even where we do find elaborate mar­kets, we also find a complex jumble of different sorts of currency. Some of these may have originally emerged from barter between for­eigners: the cacao money of Mesoamerica or salt money of Ethiopia are frequently cited examples. Others arose from credit systems, or from arguments over what sort of goods should be acceptable to pay taxes or other debts. Such questions were often matters of endless contestation. One could often learn a lot about the balance of political forces in a given time and place by what sorts of things were accept­able as currency.

"For instance: in much the same way that colonial Virginia planters managed to pass a law obliging shopkeepers to ac­cept their tobacco as currency, medieval Pomeranian peasants appear to have at certain points convinced their rulers to make taxes, fees, and customs duties, which were registered in Roman currency, actually payable in wine, cheese, peppers, chickens, eggs, and even herring -- much to the annoyance of traveling merchants, who therefore had to either carry such things around in order to pay the tolls or buy them locally at prices that would have been more advantageous to their suppliers for that very reason. This was in an area with a free peasantry, rather than serfs. They were in a relatively strong political position. In other times and places, the interests of lords and merchants prevailed instead.

"Thus money is almost always something hovering between a com­modity and a debt-token. This is probably why coins -- pieces of silver or gold that are already valuable commodities in themselves, but that, being stamped with the emblem of a local political authority, became even more valuable - still sit in our heads as the quintessential form of money."


David Graeber


Debt: The First 5,000 Years


Melville House Publishing


Copyright 2011 by David Graeber



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