Tag Archives: origin of money

Neolithic and Bronze Age economies operated mainly on credit. Because of the time gap between planting and harvesting, few payments were made at the time of purchase. When Babylonians went to the local alehouse, they did not pay by carrying grain around in their pockets. They ran up a tab to be settled at harvest time on the threshing floor. The ale women who ran these “pubs” would then pay most of this grain to the palace for consignments advanced to them during the crop year. These...

Karl Bücher (1847–1930) was a member of the Younger German Historical School, an important 19th century and early 20th century alternative to the Classical and Neoclassical schools of economics.The German Historical School had an interesting theory on the origin of money, rather similar to that of Karl Marx.This is from Karl Bücher’s book Industrial Evolution (1901) (N.B. his language and some of his attitudes, as you’d expect, are of the 19th century, so please get over that): “… it must be...

Carl Menger’s famous 1892 article “On the Origin of Money” in the Economic Journal was based on an earlier article called “Geld” (“Money”) in the German language publication the Handwörterbuch der Staatswissenschaften (Menger 1892). This article went through a further two revised editions in 1900 and 1909 (Menger 1900 and 1909).In the third edition of 1909, Menger had expanded the article to about 55 pages from the original 27 pages in the 1892 version.In his first section of the 1909 article...

From Karl Marx’s Critique of Political Economy (1859): “Direct barter, the spontaneous form of exchange, signifies the beginning of the transformation of use-values into commodities rather than the transformation of commodities into money. Exchange-value does not acquire an independent form, but is still directly tied to use-value. This is manifested in two ways. Use-value, not exchange-value, is the purpose of the whole system of production, and use-values accordingly cease to be use-values...