Quote from: dinofelis on January 18, 2015, 11:05:49 AM

Quote from: twiifm on January 18, 2015, 09:50:21 AM

The simple reason is they used metals because it had the properties they needed. But the money aspect came from the Kings issuance so he can collect taxes. Kings use gold for coins so gold became a valuable commodity.

I guess this is why paper is expensive these days :-)
Taxes were very often collected not as money, but as commodities. 1/10 of the harvest and things like that.

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Keynes is wrong about this one.

Keynes was wrong, von Mises was wrong, Hayek was wrong, Rothbard was wrong, but one contested book writer is of course right :-)

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Before money existed people used credit. Then they used tokens. Coins just happen to be a shiny metal token. Just read Graebers book on 5000 years of debt.

You have to understand that debt and money are two different concepts. Thinking they are the same is a fundamental error in reasoning.
The fact that debt existed (which is most probably right, I have never studied that, but it sounds perfectly reasonable) is no proof that money rose from debt.

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Your understanding is based on outdated knowledge. It came from economists making assumptions without empirical evidence. Graeber is an anthropologist and his theories come from archeological records not assumptions

Sure :-)

But OK, if I have time I will give it a read.

The point is however, that in "international" trade, the concept of "IOU" doesn't mean much. IOU is perfect in tight social circles. Social control balances informal IOU. But if you come with a ship full of amphora of wine for more than 1000 miles, you don't care about any IOU from the guy buying the wine. You'll maybe never see him or his countrymen again. You want something in return that is also accepted by people that have nothing to do with the countrymen of the wine merchant. So his country, his king, his state, you don't care about. You want something of value independent of that king and country, that you can trade for something in *your* country. An IOU from a distant king and country, your fellow countrymen don't care about !

Im not saying money and debt are the same thing. I'm saying that money system arose out of credit systems. Economies only need a ledger to keep track of what anyone owes to anyone else. Early societies operated on gift economies. Barter was something that happened with outside tribes akin to international trade.

But within the tribe they could just remember who owed who something using a ledger like system. If tribes got too big to keep track of IOUs then token money would be the technological breakthrough. When there were rulers/ kings, the king collected taxes so whatever the medium the taxes were that's what's people used as money.

I agree that in the past gold solved the problem of international trade because there was a global market for gold. So holding gold you could always find a buyer somewhere.

Keynes is wrong in that quote about kings put their faces on coin for vanity. Perhaps it's part of the reason but not the primary one. The main reason is so people knew it came from the Kings mint. However, Keynes was no gold bug. Quite the opposite. I really don't know why you posted that quote from Keynes

I don't even remember what your argument is. You think money needs to be commodity to work? Or do you think that economies don't run on credit?