Banks need Boundaries! Banken in die Schranken!

Banks need Boundaries!

"As a rule, political economists do not take the trouble to study the history of money; it is much easier to imagine it and to deduce the principles of this imaginary knowledge." - Alexander Del Mar in History of monetary systems (1895)
...on which Benes and Kumhof expanded: "An excellent example is the textbook explanation for the origins of money, which holds that money arose in private trading transactions, to overcome the double coincidence of wants problem of barter. [...] not a shred of evidence to support this story." - Chicago Plan Revisited (IMF Working Paper 2012)

In plain English: Instead of learning about the origins of money, we prefer to invent a story, and believe that instead.

"[The myth of barter] is the founding myth of our system of economic relations. It is so deeply established in common sense, even in places like Madagascar, that most people on earth couldn't imagine any other way that money possibly could have come about. The problem is there's no evidence that it ever happened, and an enormous amount of evidence suggesting that it did not. For centuries now, explorers have been trying to find this fabled land of barter – none with success. Adam Smith set his story in aboriginal North America [... But there,] most goods were stockpiled and then allocated by women's councils, and no one ever traded arrowheads for slabs of meat. Economists simply ignored this information." - David Graeber, Debt. The first 5,000 years. (2011)

Beyond this historical view of where money comes from, we also urgently recommend studying where money comes from every day – and where it vanishes to!

Compiled by Banks need Boundaries!

For more on Adam Smith, see our blog's jokes department.

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