A few notes:

  • Quantification of debt and the consequent depersonalization of relationships requires money as a unit of account. Credit money may be a more likely origin than barter money.
  • Lending to someone who is not a close relative or neighbor often requires a threat of violence for enforcement (this is closely related to the “origins of the state” literature, see e.g. Charles Tilley).
  • Barter is a synchronous, low-trust, low-consumer surplus, high transaction cost event.
  • Credit is an asynchronous, high-trust, low transaction cost event.
  • Credit requires trust and stable identities (knowing who owes whom).
  • For a money economy to work, you must have a level playing field: courts police and fair weights and measures. Barter was often for commodities that were uniform and homogenous “known quantities” (a goat in the ancient Middle East, a rifle on the American frontier, etc) not for works of art. A unique value proposition is not amenable to barter. Barter goods have to be durable over time (cigarettes in prisons) since they need to be stockpiled. Even a gold ingot is exchanged based on the trust that it can later be exchanged for something else.
  • Gift economies are high context, high trust. You give without the guarantee of future repayment but with a general idea of reciprocity.
  • Human economies (the ancient practice of giving a female relative to become someone’s wife) are a perfect example of where barter or like-for-like exchange fails due to asynchronicity or asymmetry in supply and demand.
  • War is a state-making and and market-making activity. If stationary bandits want legibility and uniform currency for paying taxes, how much more so does a roaming bandit who has limited time, attention, and information. Gold, silver, and jewels travel well.
  • Coins may have first been minted to pay mercenaries. They require almost zero trust, travel easily to the front lines, and can be used there to purchase goods and services.
  • Axial religions arose at the same time as debt became commonplace, and adopted its language for their understanding of the world.
  • When you give a religious contribution in the form of a bull or some flour it cannot be used to earn interest or reproduce in knd. When you give money its fungible and can be lent out, creating a permanent endowment. Organizations like the Roman Catholic Church would not exist without this.
  • Similarly with taxation: once taxes are required in state currency you have to engage in markets (this is the meaning of “cash crops” in, e.g., Faulkner).