How The Farcical Barter Story Of The Origin Of Money Leads To Deadly And Unjust Outcomes
How The Farcical Barter Story Of The Origin Of Money Leads To Deadly And Unjust Outcomes
That the barter myth of the origin of money is not true is not some innocent mistake; it serves a violent and classist ideological purpose.
Most progressive people and social-welfare-policy advocates sabotage their own efforts by speaking as though the barter myth of the origin of money is true, but you don’t have to specifically say that money originated from barter – you don’t even have to be thinking about barter or about the barter story of the origin of money – to validate and, thus, propagate the deadly, classist barter myth; you validate it just by talking about taxes “paying for” things and saying “I’d rather my taxes go to” whatever it is that you wish to fund, by, therefore, validating the “taxpayer” mythology.
The Barter Myth Is The Seed Of the “Taxpayer” Myth
I have previously written about why “taxpayer” thinking is morally repugnant in every context, how it is a tool of fascism, and it’s important to get to the source of the “taxpayer” mythology, one of which I mentioned in that essay – the Fallacy Of Money Consumability – and the other of which I did not: the barter myth of the origin of money.
First, I will give some background information, particularly for those not familiar with the myth.
You will still find some version of the barter story of the origin of money in almost every major economics textbook. A quick YouTube search offers several examples, including from the National Centre for Financial Education in India.
Recently, Cory Doctorow summarized this mythology in three paragraphs thus:
There’s even a folk-tale about how money came about: in the beginning (the folk-tale goes), we all bartered with one another in the marketplace. I’d bring my fat cows and you’d bring your champion-laying hens and we’d try to arrive at a “confluence of needs” in which you offered me twenty-seven chickens for my third-fattest cow.
But (the tale continues), these confluences were hard to arrive at. What if I only needed twenty-six chickens? Would our deal fall apart? Would you have to go and trade one chicken for something else I was willing to accept, like a decorative gourd or a half-bushel of wheat? How difficult (the tale insists) our trade must have been!
Then (the tale concludes), we agreed upon some intermediate, durable commodity to smooth over these seemingly intractable difficulty: gold! We chose standard quantities and purities of gold (and/or silver, copper, etc) as a unit of exchange, a unit of account and a store of value. You could have my cow for twenty-six chickens and make change with a couple of copper coins.
I am a certified high-school social studies teacher myself, and, many moons ago, before I got rid of the brainwashing in my own head that I am trying to purge from the heads of others, I showed students a video that showed two strangers meeting in the forest and trying to barter goods with each other. We should think about the assumptions embedded into this story!
The Disgusting Cynicism Of The Barter Myth
It’s only once you realize how people actually lived before the invention and preponderance of currency that you can see the deep, disgusting, harmful assumptions that both underpin and stem from the barter myth.
The late anthropologist David Graeber did more than just about anyone to not only debunk the barter myth but also to expose its utterly cynical and harmful implications. According to Graeber, anthropologists looked for evidence of any society in which everyday transactions take the form of barter spot trades and never found a single one; the barter myth is something that Adam Smith, who was of a class in which he wanted to be able to just plop down some cash in front of the butcher or baker and not have to think of him as a person, just made up and something that powerful people continue to promote because it serves their interests.
Listen To The Anthropologists, Please
Rather, Graeber revealed that people in earlier human societies supplied each other by extending unofficial rough credit to one another, which suggests something very different about who we are and about what society should be, and that money developed as a way to measure debts between people when there was a danger of an outbreak of a feud or some other interpersonal violence. Specifically, economists assume that the medium-of-exchange function comes first and that everything else about money stems from the medium of exchange function, but that’s wrong; the unit-of-account function is the sine qua non of money.
In the wake of Graeber’s untimely death, the historian and anthropologist Brett Scott, who is a protégé of and was a friend of Graeber, has worked to demonstrate the poisonous nature of the barter myth, what it assumes about human relations, writing specifically of the somewhat antagonistic relationship that exists between the disciplines of anthropology and economics.
Standard economics grew up in the context of modern states, and focused its attention on the populations of those states. Thus, while anthropologists were shocked out of their comfort zones by immersing themselves in clan-based societies like Papua New Guinea, economists were so immersed in modern states that those states blended into the background, so omnipresent that they were near-invisible.
And, once you forget about the state, you simply see the social results of its presence. You see strangers, disassociated from each other, floating about, trading. It’s in this context that you begin to imagine that the world is one of autonomous free-floating individuals. You might even come to loosely believe that individuals precede human networks. This is because - within a state setting - they sort-of sometimes do: precarious workers from all over a country float into association with a group of managers who have raised money from scattered investors, all operating under a common state infrastructure, and voila, a corporation exists.
Scott adroitly describes that standard economics assumes that each person is or should be thought of as an “autonomous free-floating being” and that individuals somehow precede social networks.
The Barter Myth Is Central To Conservative-Libertarian Mythology
In this telling, any notion of a “collective” comes only after the fact, through some sort of consensual agreement among individuals who are somehow autonomous free-floating beings with an inner ‘battery’ of energy, completely independent of each other.
You can imagine that this mythology is extremely convenient to those who already have power!
This mythology is both a cause of an effect of the barter myth of the origins of money, and it is foundational to the myth of the “taxpayer” and its attendant ways of thinking about public finance and the public good.
Scott writes about how the discipline of economics propagates this way of thinking.
Its tendency to ignore the state underpinnings of markets means the economics discipline has long harboured an implicit belief that groups are merely ‘collections of individuals’, as if in the back of the collective mind of Economics there’s a vision of people with an option to just walk off and leave society if it no longer suits them.
And this - to the eye of various anthropologists, and also feminist economists - is a deep-level structural flaw, somewhat like having a bug in the deepest layer of your discipline’s foundational code.
In his follow-up piece, Scott explains, through a brilliant example of the ridiculousness of assuming that ancient people lived like characters in the The Flintstones television series, that that’s exactly the same presentist teleological assumption that we make about the origins of money.
If you - like me - come from an economic anthropology background, you’ll know that many pre-capitalist societies are actually characterised by kinship groups that consist of networks of close associates (not strangers), and that they have low levels of specialisation, and that they used many alternative modes of distribution beyond overt measured exchange (including reciprocity, patronage systems, gift systems and self-sufficient subsistence). The historical move away from this, and towards economies of strangers exchanging specialist skills is a situation catalysed by the presence of money, rather than a situation that precedes money.
That latter idea of exchange mentalities preceding money is used in the presentist imagination to pull money into being, and this means, if you wish to keep believing in presentist history, it is crucial to never ask questions like “could it be the case that exchange between strangers was not the primary economic model before the rise of monetary systems?
That’s the problem. We project our present back to a past in which the arrangements of the present did not exist. We take the arrangements that were catalyzed by the creation of both currency money and nation states and assume that those arrangements preexisted currency money and nation states and were the reason for their creation.
Actually, It’s Worse Than That
Scott explains why eloquently in his poignant piece about the toxicity and dishonesty of the Tarzan worldview.
For Enlightenment thinkers, it was appealing to start from the perspective of fully grown adults, because it enabled them to present society as being preceded by individual rational choice: from this perspective you can begin to claim that people have individual reasons to ‘create society’ or enter into market exchange, for example.
This model lives on prominently in modern economics. An economics text book never begins with children being cared for by mothers. Rather, it begins with fully-grown Tarzans swinging into forest clearings to contract and exchange with others, a starting image that is then used as an explanation for why certain social forms will subsequently emerge.
Seriously, read the entire essay. It helps explain how even the most socialistic of Westerners talk about money, taxation, and public finance in a way that accepts fundamentally libertarian premises, why the barter myth and “taxpayer” thinking are tools of white patriarchy.
Conservative commentator George F. Will put it so in his column asking if the individual was obsolete:
Conservatism understands society not as a manifestation of government but as the spontaneous order of cooperating individuals in consensual, contractual market relations.
The first thing to note – and to get out of the way – about that passage is that it’s a bit of a strawman, a bit of a false choice; not agreeing that society is a “spontaneous order of individuals” does not mean that one thinks of society as a manifestation of government, but it’s telling that that’s how Will wants you to view the options.
That said, the more important thing to note here is that Will expresses a belief that society is a spontaneous order of cooperating individuals, that the order is spontaneous. As Scott has noted, this is the belief, made possible only in the context of modern nation states, that individuals precede human networks.
But modern liberal and progressive mythology validates this premise when it speaks of the public good as stemming from taxation of money that, as Margaret Thatcher said, originates with people, that we come together as “taxpayers” to create and fund society; they disagree only with the outcome, not the fundamental premise, of libertarianism, and that’s why we can’t make advances. We play their game.
Stop The Smarm!
When we ask – even when we demand – that well-to-do entities “pay their fair share,” we are treating them as though they are autonomous free-floating beings who were created by no one. It’s a message from a position of weakness, extremely smarmy, and that it puts plenty of impressionable voters off should be no surprise.
A much more affirmative message would be that concentrated power is corrosive to society, that nobody should have that much power in the first place, and that, if we must use the “fair share” phrasing at all, the real issue is that no one should take more than their “fair share.”
Concepts like
“the taxpayer”
and
"pay their/your fair share"
and
"pay into"
and
taxes "going to" various things
stem from the barter myth and only reinforce the reactionary notion that the government is merely an after-the-fact usurper on some preexisting 'market' society. Notice that I said "concepts," because it's not the words that are the problem; it's the concepts that they represent.
The Barter Myth’s Present-Day Implications
Here is how Doctorow succinctly and incisively put the profound implications of the barter story of the origin of money.
In this story, money came from the people, a bottom-up consensus phenomenon in which we all agreed to a coinage and therefore money comes from the people.
This story has a corollary. If money comes from the people, then taxes represent an incursion upon the people by governments, who impinge upon the private space of consensual, bottom-up trading activity with a top-down disruption.
There you have it. That’s why the barter myth matters. That’s why debunking the barter myth matters.
That is both how and why the barter myth fertilized the field for neoliberalism, from which sprouted the poisonous weeds of taxpayerism, and we cannot fight either taxpayerism or neoliberalism without cleaning the soil of that fertilizer and attacking the fertilizer plant.
If the barter myth is in fact, if it's true that money somewhat spontaneously emerged from interpersonal barter, then public wealth and the public purpose stems from and, as such, can be perceived as thieving drain on private wealth!
This is the mythology that fuels both the Conservative Movement and the Libertarian Movement. This is the mythology that fuels the modern Republican Party and Trumpism.
It’s also the mythology accepted and even promoted by the political party that purportedly stands in opposition to Trumpism!
What do we think that we are accomplishing by interrupting Trump to claim that money allocated to farmers – who undoubtedly think of themselves as “taxpayers” – came from “taxpayers”?
What does supposedly liberal supposed fact-checker Daniel Dale think that he is accomplishing by saying that what Biden said there was true?
All that it does is encourage people to think in a very libertarian way. To repeat what Doctorow said, “If money comes from the people, then taxes represent an incursion upon the people by governments, who impinge upon the private space of consensual, bottom-up trading activity with a top-down disruption.”
All that Biden, who is against universal healthcare, and his supporters accomplished with that interruption was to further erode the concept of the public good, to promote the concept that universal healthcare, universal child-care, high-speed passenger rail, and mass transit system represent an incursion into your wallet.
Money Is, Fundamentally, A Social Relationship
Thinking of money and social relations in this way encourages us to think in terms of hierarchy, and I believe that this is one factor in why many working-class people are siding with the Republican Party now. The Democratic Party has recently become the party of the professional-managerial classes, leaving its real blue-collar roots behind, even if most non-white blue-collar people still vote for it.
Talk to people, and they'll talk about their taxes "paying for" stuff, but, as I have mentioned before, the hidden message there is that they reject policies that would help them because that would mean that they would become the shameful "taxeaters," because that's how those preening professional-managerial-class Democrats have decided to characterize public spending!
There are plenty of US residents who think the following: "I need my healthcare not tied to my employment, and don't try to take my guns." They want to know how that can work. Democrats say, "don't worry, we won't tax you to pay for your healthcare; we'll tax the wealthy to pay for it." In making arguments like this, you ask people to accept being in the position of the "taxeaters" whom they have been conditioned to hate their whole lives!
Reject this stupid, disgusting, dishonest framing! Don't complain that people are "voting against their own best interests" when you encourage them to do just that!
Accordingly, then, the barter myth seems to be promoted for a few interrelated purposes:
To conditions us to conceptualize individuals and individuality as preceding human networks
Thus, to condition us to think that exchange, even for non-physical, non-transferrable, non-rivalrous goods that are helpful to the community, like education and healthcare, is the default mode for accessing resources
To condition us to think that the public sector stems from the private sector, not the other way around, thus, to condition us to think of ourselves as “taxpayers”
Thus, to condition us to think of our fellow human beings in a hierarchy of “taxpayers” and “taxeaters,” the latter a drain on the former
Thus, to condition us to, upon being prompted to imagine the public provisioning of needed goods and services, like universal healthcare or higher education or even mass mobilization against climate change, first think “who is going to pay for that?” and subsequently guard our wallets
Thus, to condition us to think of poor people benefiting from government goods and services as legitimate thieves
Thus, to condition us to “vote against our own interests,” because we absolutely do not want to think of ourselves and have others think of ourselves as taking “their” money and do not want to become “taxeaters”
As I have said, every “progressive” who accepts these premises is just pissing into the wind, including and especially this guy whom I am halfway convinced was created in a lab in order to embody a conservative caricature of “progressives.”
This supposed “progressive” is conditioning people to think that poor people are costing them as “taxpayers”! The result of that is much less likely to be a call for raising taxes on corporations and much more likely to be a call for cutting off benefits to those leeching poor people.
This toxic, dishonest manner of thinking is peppered throughout an oft-cited report from the Brookings Institution arguing against canceling student debt because “that money” could be better used for other progressive purposes. Author Adam Looney starts his disingenuous concern trolling with the opening line of the piece.
Even modest student loan forgiveness proposals are staggeringly expensive and use federal spending that could advance other goals.
He starts with a portrayal of a nonexistent either-or choice between canceling student debt and achieving other progressive goals. The entirety of his essay is based on that premise, which is based on the premise of the “objectness” of money.
As you can see, the barter myth and the attendant “taxpayer” myth exist to divide the masses against each other.
There are better ways to spend that money that would better achieve progressive goals.
There is no “that money.” Canceling student debt just means canceling student debt.
Increasing spending on more targeted policies would benefit families that are poorer, more disadvantaged, and more likely to be Black and Hispanic, compared to those who stand to benefit from broad student loan forgiveness.
See the pattern? See the divide-and-conquer approach of the commodity-money myth?
Indeed, shoring up spending on other safety net programs would be a far more effective way to help low-income people and people of color.
He wants you to think that it is an either-or choice. That so many do think such is a function of the barter myth taking hold in people’s heads.
Prioritizing spending on targeted programs would therefore be a more effective way to achieve progressive goals. Biden’s proposal to make the child tax credit fully refundable, for example, would exclusively benefit children living in poverty. Twenty six percent of beneficiaries of that policy would be Black and 29 percent Hispanic. That is a progressive change that would lift the incomes of millions of very poor children. It would also benefit many student loan borrowers—as well as many who don’t have student loans.
There it is. He wants you to think that that there is an either-or choice between the measures that he described in that paragraph – like the wonderful child tax credit – and canceling student debt, and the way that he convinces people of that is the “taxpayer” myth, which is a function of the commodity-money myth, which is a function of the barter myth.
You can see some version of this on any social-media platform or any political discussion forum, where people who are promoting the funding of one social-welfare cause (or the cancelation of student debt, which doesn’t actually require any funding but does mean that the government won’t “collect” money for which it has no use anyway) and people who are promoting the funding of some other social-welfare cause are arguing with each other because they have been brainwashed into thinking that they most compete with each other for funds, which means that the working-classes are perpetually divided.
The division between different types of people is only exacerbated, people suffer and die as a result, resentments grow, and fascism fills the void.
A statistic that needs far more attention is that, in the 2020 election, among black people who voted for Trump, more than two thirds were men. The men/women-for-Trump ratio was not as high for other non-white groups, but, more broadly, Trump increased the GOP's share of the nonwhite vote.
You heard that, the most openly-racist President in generations increased the GOP's share of the non-white vote.
How?
One way is misogyny, but taxpayerism accelerates racism and misogyny, because the barter myth encourages men to think in terms of being burdened breadwinners.
Note that, until relatively very recently in human history, most women could not claim to be “taxpayers.” Domestic labor is not paid and, thus, not taxed. Note, too, that until recently, black people in the United States labored for free and, as such, paid no taxes. It was during Reconstruction that the term “tax payer” was brought into public discourse as a way to generate resentment among lower-class white people at newly freed black people whom they were told they were “paying for.”
Democrats Are Republicans’ Best Enablers
We see this coming full circle now that the Democratic Party has become the party of “taxpayers” while non-white working class people are increasingly voting for Republicans.
Yes, Democrats “work for taxpayers,” which is why we don’t have universal healthcare, universal childcare, tuition-free higher education, and a high-speed passenger-rail system.
Non-white working people, especially men, may want better services, but they do not want to perceive themselves as being recipients of "other people's money." Republicans spent years drilling the "other people's money" thing into people's heads, and Democrats validate it! Democrats basically say "yes, that is how you should think of public finance," and then they wonder why people "vote against their own interests"?
It all stems from acceptance of the toxic barter myth and everything that stems from it. Progressive advocates, social-welfare advocates, who accept this myth have already ceded the game to our opponents and helped those opponents recruit people to their cause. I should know, since I grew up conservative and spent my early adulthood in the US libertarian movement.
Words Matter
Since money is a codification of social relations, how you talk about money, how you talk about the nature of money, how you talk about public spending, how you talk about taxation, and how you talk about the origin of money is how you talk about social relations, and the barter myth promotes a hierarchical and atomized vision of society.
To take it to the logical next step, the myth that money emerged as a bottom-up phenomenon from the people that governments collect only after the fact gives life to the political identity and archetype of "the taxpayer," which promotes a profoundly fascistic and anti-communal mentality.
The political identity of the "taxpayer" is inherently classist and bigoted and has a racist history, and it logically stems from the barter myth.
Too many people stubbornly think that they are advancing a progressive or socialist worldview when they assert that we pay taxes to fund the public good when what they are actually doing is advancing a profoundly conservative-libertarian premise, and by advancing a fundamentally conservative-libertarian - and dishonest - premise, they are ultimately advancing a conservative-libertarian worldview.
In other words, the progressive and liberal and even socialist narrative about taxation and the public good takes the barter myth, which is vigorously defended by libertarians, as it's starting point! It means that progressives, liberals, and socialists are fighting conservatives and libertarians on conservatives’ and libertarians’ ground, which is to say that, for the former, they are fighting on quicksand.
This is why you will often hear me say that modern Progressive leaders aren't so much Progressive as they are conservative and libertarian caricatures of what it means to be progressive. Almost to a person, they agree with the idea that they're going to pull money from other people to fund universalist goods and services, that we are impotent to solve any problems without “other people’s money,” and that people with money are the solutions to our problems.
They agree with promoting the idea of public goods within the realm of exchange. In doing so, they accept and propagate the barter myth, which advances the notion that exchange is the natural mode of human interaction.
If universal healthcare would be "paid for by our taxes," then what we are not saying is that we should simply declare that health-care resources should be seen as part of a public commons – which is to say that we are removing healthcare services from the realm of something that barter supposedly facilitated: exchange.
Either health care is a human right, or it's paid for by our taxes. It can't be both.
If universal healthcare would be "paid for by taxes," then everyone above a certain level of wealth can claim - whether he is for or against universal healthcare - that he is being burdened by having some of his rightfully-earned property taken from him.
As such, he can make personal property claims of the bodies of or services of healthcare workers or the bodies of people who most need healthcare - "that's MY money funding your healthcare, boy."
And people who know that they need healthcare but also know that they would be receiving more money’s worth of care than they would pay in taxes – because they have been encouraged by taxpayerism and the barter myth to think that way – would rather avoid the shame of becoming a “taxeater.” The word “taxpayer” does not mean “person who pays taxes”; it means “person who is a net payer of taxes compared to the government benefits that he receives,” and universal healthcare would mean that a bunch of people who pay taxes would go from being “taxpayers” to being “taxeaters.”
If we stop playing this stupid game, we can just not allow anyone to make such a harmful claim in the first place. We can say that healthcare resources are no one's property and are not funded by the proceeds of anyone's property, that healthcare resources are part of a commons.
Conservative movements gain support from people whose brain wiring makes them think in terms of hierarchy and of not wanting to be in a submissive position in that hierarchy. Progressive and liberal people can stop encouraging them to think that way!
The way that we stop encouraging people to think that way is to reject the mythologies that encourage people to think that way, and that includes rejecting taxpayerism and the barter myth.
We live in a society. We have always lived in societies. The barter myth promotes an atomized, anarcho-libertarian conception of society that has harmful outcomes, and much of our common language about money, public finance, and taxation validates the barter myth even if done so unconsciously.
If we want a more inclusive, safter, just society, we must kill not just taxpayerism but also kill its root system, the barter myth. Lives depend on killing this myth.