Reading "Debt: The First 5,000 Years".

One take-away: the stories that (a) money evolved from barter and (b) credit evolved from money are both wrong.

Credit came first (invented by large organizations as a way of tracking resources) then money (which was, if I understand right, mainly used within and between said large organizations).

Barter is only used among people who are already familiar with money. Trade in non-monetary societies tends to be very ritualistic and just one or two steps away from combat; internally, resources are allocated in a way that sounds more like socialism (you need shoes? the council will get you some shoes from storage.)

Another takeaway:

Let's play a game.

I make a lot of playing pieces, some which I will give to anyone who can give me things I want.

In order to make you want to have some of my pieces, I will demand that you give me back a certain number of pieces every year. If you can't give me enough, I'll put you in prison.

The playing pieces are money, the yearly payment is a tax, and this is how rulers create money and markets... and acquire the necessary supplies to run their empires without doing the necessary work.

"Markets" exist only as a side-effect of taxation.

Modern economists pretend not to believe this (it's considered essentially a conspiracy theory), but their advice aligns with it completely.

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Lemme say that again, only shorter: "markets" only exist because of government coercion.

Tell that to your favorite free-market fan and let me know how it goes. ^.^

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@woozle I would be very skeptical of "only", but they certainly play a key role.

@clacke Well... "primarily", perhaps. But the evidence does suggest that markets, the larger economic sense, only happen when governments act to create them.

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