Re: [OPE] Dialectics for the New Century

From: Dave Zachariah (
Date: Tue Apr 08 2008 - 17:31:24 EDT

on 2008-04-08 14:04 paul bullock wrote:
> I know of no evidence that money was issued by any state in the 
> absence of some form of commodity exchange. 

Hi Paul B,

Note that this is not what is at stake. The issue is the origin of 
money: whether money emerged from commodity production or the 
pre-capitalist state. The former case belongs to the 'commodity theories 
of money', in which a specific commodity --- gold or some precious metal 
--- emerged as a 'universal equivalent' or numeraire.

The evidence for the state theories of money is gathered quite recently. 
Paul C has given some references, previously so I'd urge you to check 
the details there. (See for instance Wray 2004, At present I can only 
reiterate some of it from the top of my head:

The first money-calculating societies were agrarian command economies of 
the ancient Near East. Payment could be in a staple of barley or a 
silver equivalent --- *an equivalence established by the state*. And the 
money of account was primarily used for taxes.

Whatever unit that the state could demand taxes in would suffice and 
once the tax credits were transferable among its subjects, money was 
established. The physical properties of the money used or whether it was 
a commodity or not, did not matter as long as it could not be forged.

Issue worthless pieces of metal to your royal entourage and soldiers. 
Then demand that all of the subjects in your kingdom shall return such 
metal pieces to you or else they will be punished. Where will the 
subjects get these pieces? By exchanging the fruits of their labour with 
the agents that happened to hold them --- and the agents included the 
state itself which had issued the pieces in the first place! This 
provided a new way to appropriate labour from the population.

This becomes clear when one considers the introduction of money in 
African colonies. See Forstater's "Taxation: a Secret Of Colonial 
Capitalist (So-Called) Primitive Accumulation",

//Dave Z
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