Debt: Bitcoin is not a return to stateless money, it is the first currency

I just read Debt: The First 5,000 Years by anthropologist David Graeber. This book examines the history of money and debt, and how they relate to social structures, through a lens that departs significantly from the conventional wisdom of economic thinking.

Conventional wisdom paints the picture that money arises naturally as a result of people inefficiently bartering goods and services directly with each other and the problems inherent in this. Graeber sees through this story by looking at anthropological history. Primitive communities were only possible in the context of separate communities that interacted with each other, sharing resources freely with each other, maintaining a communal way of life, with little bartering occurring. It played no role in the intra-communal affairs of early societies.

Money, like commodity money, began to be used only in rare inter-community interactions over long distances. Local economies have not yet begun to use these exchange mechanisms. They used credit. It is a trust run and supervised by a government, like in ancient Sumer. This system evolved from the informal “credit” people considered when sharing resources in more primitive societies. However, it was formalized and maintained by the power structure of the Sumerian government and temples. Rather than money changing hands during exchange, people simply record debts held in temples and regularly settle their obligations with actual supplies.

Debt arose prior to the issuance of coinage, which was created and maintained at scale by the state. As large-scale trust-based civilizations collapsed and fell to warring imperialist states, commodity money was later minted and circulated again by the states. Debt and credit mean little during periods of constant war and army wandering, and there is absolutely no assurance that they will return to pay off their debts after their move.

Since then, due to modern times and the anomalies of central banking, human society has gone back and forth between virtual fiat currency and demonetization, depending on whether the era was premised on large-scale war and conquest. After the fall of the great coined empires, people created their own informal, localized credit networks, governments slowly intervened in these networks to mediate, and the rise of violent empires inevitably led to the return of coinage. The pattern has been repeated throughout the ages.

Bartar, as traditionally taught, was not actually part of this process of monetary development, and the state was invariably directly involved in the formation of monetary systems and markets.

I’m sure many people read it and were incredibly triggered. But Graeber’s case is very solid and built on actual historical and anthropological evidence, not speculation. In particular, the idea is that Chartalism has a much sounder foundation than many in the field would like to admit.

This actually makes Bitcoin more profound to me. Bitcoin is simply return to After reading about stateless money and debt, I don’t think such money ever really existed. Bitcoin is first Stateless money does not exist. To me, that is an even more tremendous achievement and historic change.

Regardless of your financial inclinations, I recommend you give this book a read. This will give you quite a bit of food for thought in the context of Bitcoin.

This article take. The opinions expressed are solely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.