Some years ago, anthropologist and Wall St Occupant David Graeber wrote a history of Debt in which he debunks the “myth” of barter. In his telling, barter never exists in human history – Any transfer of property is the result of an exploitative power relationship, therefore ownership is theft, debt is slavery, and socialism is the answer.
In short, Graeber was questioning Adam Smith’s thesis that the division of labor leads to the voluntary exchange of surplus goods, which leads to the emergence of money. Chartalism vs Metallism.
George Selgin debunks Graeber’s “debunking” by pointing out that barter is an unstable system, and any population that engages in barter will quickly progress to monetary exchange or perish from unmatched needs. Anthropologists rarely encounter barter societies in the wild because it’s a temporary state.
Here we are in the time of coronavirus, where preppers and hoarders have emptied store shelves and I’m forced to violate social distancing to trade toilet paper for distilled water from a neighbor. Barter is back. Will TP become the new store of value, or shall we starve?
In California, anti-gouging laws prevent retailers from raising the price of goods to meet heightened demand. Six months ago, Clorox disinfecting wipes averaged $3 a can. Today, it’s illegal to charge more than $3.30 even though I would gladly pay twice that.
This isn’t barter; it’s demonetization. Dollars no longer serve as an accurate unit of account for Clorox wipes, especially since no amount of dollars can buy wipes that are out of stock. This is the point where essential items should gain intermediate commodity status and evolve into money.
Except that can’t happen. The FBI has a Hoarding and Price Gouging Task Force that prevents enterprising citizens from providing much-needed liquidity on scarce products. It’s illegal to even source them from elsewhere. My mother tried to buy a box of Chinese KN95 respirator masks for my brother’s hospital, but the masks were seized by customs at the border.
Even in the brief historical periods where barter may have existed, it was never really barter so much as bilateral monopoly. Do you think tribal chiefs allowed members to freely negotiate with hostile tribes? Of course not – some of the earliest traded goods were women and children.
So Graeber was wrong. Power isn’t the ability to assert ownership over property. Power is the ability to control how others assert ownership over property.