The Myth of the Myth of the Myth of Barter

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.

7 thoughts on “The Myth of the Myth of the Myth of Barter

  1. Tribal chieftains operate on the basis of consensus, not force. Tribe members ask for and respect their input but don’t feel obliged to follow their suggestions unless they make sense to them. In fact, tribal societies are far more meritocratic than supposedly more “developed” ones. In a tribal environment individuals like the current crop of elected and potential government leaders would all be packing water and cutting wood for the rest because in tribal societies people are very familiar with one another during their entire lifetimes and don’t need political parties and the media to advise them on who their leaders should be.

    1. Consider the smallest possible tribe: Two parents and their children. Suppose one of the children wants to attend a Frank Zappa concert using money he earned from his paper route, and the patriarch steps in and says HELL NO. Is that consensus? Force? Dictatorship?

    2. You nailed it. Moreover in a tribal zone one can much more easily discreetly disobey, or leave.

      Elaine: AFAIK a family isn’t a tribe, and there cannot be any change of leadership triggered by an action: parents order, the child obeys (he cannot leave nor try to take control).

      1. “discreetly disobey, or leave” — do you have any examples of this? Look at modern day tribal zones in the Middle East & West Africa – anyone who attempts to leave will quickly be killed by the militants that run the area. See also: Prison gangs, Mexican drug cartels, Crips & Bloods, etc. Tribal societies are not like the happy musical groups you see in Disney movies.

          1. Gangs and drug cartels are socioeconomic groups that exist without a political state. If you don’t like those examples, then look at the Sentinelese or the indigenous people of the Amazon. Political groups are a totally unrelated thing.

  2. Economists like to talk about monetary systems emerging from barter systems. This is utter bullshit. None of the monetary systems described by science evolved from barter systems. Barter systems emerge from the collapse of monetary systems. The monetary system comes first. If you weren’t raised in a monetary system, the vary idea of bartering seems weird and counterproductive to you.

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