A new study by archaeologist Dr. Mikael Fauvelle introduced the Trade Money Theory, proposing that money primarily emerged to facilitate long-distance trade between strangers and across borders in pre-state societies. This theory suggests that money was used to solve the problem of exchange networks that could not rely on trust-based relationships, according to Phys.org.
Traditional theories on the origins of money include the commodity theory, which proposes that money was created to facilitate internal trade between members of a community, and the chartalist theory, which argues that money was created by a central authority to standardize units of account and facilitate taxation and tribute collection. However, both theories have been criticized for their limitations in explaining the emergence of money in ancient societies.
“The commodity theory is based on the idea that trading one good for another is inefficient because the trading partner may not have the goods you want, or they might not want the goods you’re offering,” reports Phys.org. While this theory suggests that money mitigates the problems of inefficiency and unreliability in barter systems by providing a common medium of exchange, studies have shown that pure barter systems are rare. Many experts now consider barter economies to be a “myth,” which indicates the need for alternative explanations.
The chartalist theory, on the other hand, links the emergence of money to the state, which used money for taxation and tribute collection. However, it does not adequately explain how money would have functioned in ancient societies lacking a formal tax system or tributes. “Throughout the world, we see that many different traditional non-state societies have used money for exchange. I think that the comparison of these cases clearly shows that money does not necessarily come about through state control and taxation,” said Dr. Fauvelle.
Dr. Fauvelle supports his hypothesis with two archaeological case studies: the use of shell beads in Indigenous North American societies and standardized bronze objects in Bronze Age Europe. These case studies demonstrate that monetary economies predating the development of ancient states existed, supporting the idea that money emerged to facilitate trade over long distances where trust-based relationships were impossible.
In Western North America, many Indigenous societies used shell beads as a universal medium of exchange for thousands of years before European arrival, facilitating both everyday transactions and long-distance trade. These shell beads were often standardized in size and shape, allowing for use in extensive trade networks that extended for thousands of kilometers. Spanish explorers documented the transport of shell beads over more than 600 kilometers from the Pacific coast to the interior regions of the continent.
Trade networks in North America extended from the Pacific Coast to the Mississippi River, sometimes requiring thousands of miles of travel. Along the way, traders would encounter strangers with whom they needed to trade, necessitating items of shared value such as shell bead money. “Even with well-established trade networks, it is unlikely traders could have relied solely on delayed reciprocity to facilitate their travels.”
Similarly, in Bronze Age Europe, bronze and copper ingots, rings, and axes were standardized by size and weight, serving as objects of standardized value and facilitating trade across cultures and regions. Archaeological discoveries reveal that bronze and copper materials circulated abundantly, connecting regions from Scandinavia to the Mediterranean over distances of more than 1,000 kilometers. Standardization made these bronze items convenient for trade between regions.
Scandinavian rock art depicts conical hats, chariots, and ox-hide ingots, indicating trade and movement across Europe. Norse objects such as folding chairs and razors depict Mediterranean motifs, showing cultural exchange. These findings suggest that standardized bronze objects could be used as a form of money that held value across cultures and regions, as simple barter systems could not be relied upon to acquire such resources.
Dr. Fauvelle’s Trade Money Theory posits that money emerged as a practical innovation motivated by the necessity to trade with strangers in long-distance exchange networks. “The use of money would have greatly increased the efficiency of long-distance exchange systems and would have likely led to increased levels of inter-regional interaction,” stated Dr. Fauvelle.
The emergence of money in these contexts likely contributed to the development of social hierarchies and the accumulation of wealth. “This, in turn, could have funneled more wealth into the hands of regional elites. This is indeed what we see in ancient California with the formation of chiefdoms on the region’s islands and coasts,” said Dr. Fauvelle.
Dr. Fauvelle concluded that regular and sustained trade between strangers and across borders can explain how monetary systems developed in many regions of the world in the absence of state control structures. He emphasized that the emergence of money was a complex evolutionary process influenced by economic and social factors. “It is quite possible that there are other examples out there of similar processes taking shape in other world regions, and that would be an excellent topic for future research. Ancient Mesoamerica or the Pacific Islands might be two areas to look at in the future,” he stated.
The article was written with the assistance of a news analysis system.
This article was originally published at www.jpost.com
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