Romy asks, “How was money originally distributed?”
Originally, there wasn’t any money to distribute. We didn’t need it until trading with other people became an important part of life. Think about it: if you can make everything you need to live, what’s the point of money?
Way, way back in the day, people lived in small hunting tribes. Women would gather nuts and fruits, men would kill big animals, everyone would share all the food. There was no money — no one would even know what to do with it!
Of course, this wasn’t a great way to live. Famines were common. Nearby tribes were always at war. Free time didn’t exist. We didn’t even have permanent homes, since we had to follow the herds we hunted. Things were distributed pretty equally, but there wasn’t much to go around.
Then, some twelve thousand years ago, everything changed. We figured out how to plant our own crops and raise our own animals. Tribes turned into peasant villages, where each family could farm enough to stay alive — or more than enough! If you had extra stuff, you’d give it as a gift to someone who didn’t have enough. Since everyone knew each other, they’d be sure to get you back next time they had extra.
This “gift economy” might seem weird to us, but it’s actually what comes naturally if you’re not taught otherwise. It’s how monkeys do it: I pick your lice as a gift, maybe you’ll get me back later. Humans have a natural sense of reciprocity. It feels good to be nice to people who are nice to you.
Unfortunately, the gift economy only works on a small scale. As villages get bigger, it gets harder to remember who’s been nice to you, and how nice. Eventually, “I owe you one” turned into “I owe you one cow.”
But still, these debts were personalized. Different people owed you different stuff. You couldn’t sum it all into a dollar amount — that wouldn’t make sense.
That is, until someone new came along: the merchant.
A merchant is just someone who buys and sells everything. Whatever extra stuff you had, you could give to the merchant. Whatever you needed, you could get from the merchant. Instead of going to the potter for bowls and the weaver for baskets, you could go to the merchant for both.
Since the merchant traded with everyone, he had a lot of debts to keep track of. So he invented a tool. If you gave something to the merchant without taking something in return, he’d give you a coin with a special design. That way, he’d know he owed you one.
That’s how money was originally made. So how was it distributed?
We don’t really know. And it doesn’t really matter.
See, money and trade were still not super important. You farmed what you needed. All that merchant stuff was just extra. Even after markets had been around for a while, they were still on the sidelines… and people hated them! Take it from Aristotle:
[Market activity is] a kind of exchange which is justly censured, for it is unnatural, and a mode by which men gain from one another.
Trading land for money was unthinkable. Working for money was rare. Buying something and selling it for a profit was considered evil!
Inequality wasn’t a question of who had money, like it is today. It was about those basic needs that money didn’t cover. Social class wasn’t a matter of rich versus poor. It was warriors and priests versus slaves and peasants.
The idea that money could measure everything — that a social hierarchy could be based on how money was distributed — would have seemed positively kooky for most of human history.
More on this: Rondo E. Cameron, A Concise Economic History of the World (Ch. 2)
More from Romy Asks:
Originally published at milobeckman.com on October 31, 2014.
