Why is the barter economy predating money taught when it never existed?

External question — Economics Stack Exchange Author: user44733 Original post: https://economics.stackexchange.com/questions/56020 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. As described here , and from what I remember from economics class (this may sound anecdotal, but I think it's common knowledge, correct me if I'm wrong), a barter economy is said to predate money. But I've never heard of an ancient society based on barter. Maybe like war torn societies later have. Anthropologists say such barter economy societies never existed . So why is it still taught? Edit: from the wiki page "There is no evidence, historical or contemporary, of a society in which barter is the main mode of exchange;" Edit2: to be clear, I'm asking about examples like scenarios given in the link above, "Most thinkers on the subject, from Aristotle to today’s mainstream economists, have speculated that money emerged from a prehistoric barter economy, in which people traded goods and services directly. Such a system requires that both parties want what the other has to offer, and that they can settle on the relative value of each item. Do 30 bananas equate to one fishing net? Three nets to an ox? " Like when are they talking about? When did such scenarios happen? Such a scavenger hunt society sounds ridiculous and made up. Why would they teach that?

External answer — Economics Stack Exchange Author: 1muflon1 Original post: https://economics.stackexchange.com/a/56021 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Barter societies did existed under economic definition of barter. In mainstream economics, barter always was, and to some extent still is (except of some subfields) defined broadly as (Mankiw 2018, Principles of Economics 8th pp 605.): the exchange of one good or service for another—to obtain the things they [people] need. Under the definition above barter definitely existed. However, anthropology has different definition of barter. In anthropology, people talk about barter only if it is exchange of goods without any social component . For example, anthropologist Gregory (1982) in his book 'Gift and Commodities' offered this dichotomy: Commodity exchange [barter] is an exchange of alienable objects between people who are in a state of reciprocal independence that establishes a quantitative relationship between the objects exchanged ... Gift exchange is an exchange of inalienable objects between people who are in a state of reciprocal dependence that establishes a qualitative relationship between the transactors. For example, if there are two neighbors and one neighbor provides the first neighbor with bread and the second neighbor provides the first one with eggs, and this relationship is based on reciprocity and obligation (i.e. the first neighbor would stop providing bread if second stops providing eggs), then: in economics this would be barter because it is exchange of one good for another. in anthropology it would not be barter but 'gift exchange' because the exchange also establishes a qualitative relationship between transactors . Different fields have simply different definitions. In physics inflation means expansion of cosmos in economics inflation is change in price level. In fact the whole example mentioned in that Atlantic article as an example of those wives going requesting goods they need would be in economics broadly considered barter. For most questions that economics asks (such as what is optimal good allocation) it simply does not matter whether exchange is done between neighbors who know each other whole life or random strangers who just now met for first and last time. Also the author of that Atlantic article is neither economist, nor anthropologist but simply a journalist without any expertise. The Atlantic article makes also some absurd anti-science claims about trade or money assigning value to goods whereas values exist even Robinson Crusoe economy. My best guess is that she simply did not understood the difference in terminology between different fields. One should be always cautions when laymen write article about not just one but already two specialized fields. So to summarize ancient barter societies definitely existed according to economics definition. They do not exist according to anthropology definition because early barter was done within tribal structures where everyone knew each other and had qualitative (and almost always even familiar) relationship with each other. Anthropologists call this type of barter gift giving, economists just call it barter. Anthropologists study how humans interact on more broad socio-cultural level, so anthropologists simply need to differentiate between barter that creates some personal/social ties and pure impersonal exchange. Economists generally do not study personal ties on such level so we only need one word (except perhaps again for some specialized sub-fields). Such economy certainly predated money, in fact anthropologists agree on that just call it differently. There is separate question you might be referencing indirectly of whether money arose from barter or debt and that is more complicated as it is possible that some sort of debt barter (trading sticks that recorded debt, how much grain etc who owes who). This is unresolved question due to lack of definitive archeological evidence that can conclusively support either view. Moreover, barter models are also used not as an description of any historical economy but because they can be informative and useful models of present-day industrial societies. For example, people do construct barter models that try to model modern industrial economy where production function depends on complex supply chains. These models on purpose remove money to simplify the analysis. Money exist to simplify exchanges, because real life exchanges create problem called double coincidence of want. If you are painter and you want car, without money you need to do lengthy search for someone who has car and likes your painting. Money solves this issue because you can just sell your painting to anyone and buy car from anyone and thus you save time and expense on searching for the other person. However, in an economic model you can just assume search costs are zero, and money introduces host of other issues (inflation etc) you might want to abstract away from so you understand how economy works on fundamental (we call it real) level as opposed to being confused with nominal values and variables (once you allow for money). PS: Barter, under economic definition does not require the following, this is a straw man argument. Such a system requires that both parties want what the other has to offer, and that they can settle on the relative value of each item. Do 30 bananas equate to one fishing net? Three nets to an ox? " It only requires that two parties are both happy and satisfied after an exchange. An exchange of 1 Pikachu Pokémon card for 1 Charizard Pokémon card among children on a playfield is a an example of barter even if the children did not established prices among themselves (i.e. 1 Pikachu is equal exactly 5 cubones etc).

External answer — Economics Stack Exchange Author: Iñaki Viggers Original post: https://economics.stackexchange.com/a/56937 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Why is the barter economy predating money taught when it never existed? That is a non sequitur equivalent to asking "why are we told that a square has more sides than a triangle when it's the opposite?". On the evolutionary aspect, the abstraction of the concept of a currency and its implementation are more complex than exchanging tangible objects which are somewhat easy to collect. Historically, early exchanges of mirrors for gold between the indigenous people of America and the arriving Spaniards in the XVI century are very unlikely to have occurred via some currency. This shifts to proponents of money precedence the burden of proof if they intend to outweigh the aforementioned phenomenon and history. Furthermore, proving the prior existence of a currency should be easier to those proponents than disproving that other, more rudimentary forms of trade took place first. What evidence establishes that the economic agents devised a currency no later than the earliest trades? The other answer invokes concepts with which anthropologists' attempt to draw a distinction between transactions they concede constitute barter and those which they prefer to give a different name. But that distinction is both irrelevant in Economics (as the author of that answer pointed out) and rather flawed from a dialectical standpoint. I'm aware that you subsequently asked " for evidence within societies before money. Not after, nor between societies ". But also that is irrelevant in the teaching of Economics because concepts such as barter, competitive advantage, utility, and so forth, do not depend on whether the economic agents in the transaction are from the same society. Additionally, the presumption that no trades preceded the invention of money casts serious doubt that a conglomerate of humans can even be considered "society".

External answer — Economics Stack Exchange Author: user48776 Original post: https://economics.stackexchange.com/a/58762 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Barter economy happens all the time even today, when monetary system fails (usually because of overprinting and hyperinflation). Some people would use a foreign currency that is not failing, yet it can be outlawed. So others who don't have easy access to foreign currency may prefer barter, especially when barter is not outlawed (and it usually not). Barter also helps avoid taxes. In hyperinflation, your business is considered profitable even if your "profit" does not compensate inflation, and profit means taxes. When you exchange goods directly, you can use bogus prices in your balance sheet, and thus avoid paying taxes at least for inflationary component of your "profits".

External answer — Economics Stack Exchange Author: Aristocratic Jack Original post: https://economics.stackexchange.com/a/58764 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Depends on whether your definition of "economy" necessitates actual currency or not. Trade at some level has always existed from the very beginning of human history (including prehistory), and in fact the first governments as we know them today organized barter based systems, such as "palace" or "temple" economies. A "temple economy" or "palace economy" was where the state collected the lion's share of the resources of a particular polity, and stored them in temple warehouses. The resources would then be distributed to the general populous of the state. Many states prior to the advent of coins instituted corvee systems. Corvee is essentially a taxation system in which taxes are paid in labor, rather than money. The corvee labor was typically used for the ruler's construction projects and the ancient Egyptian pyramids for example, are products of corvee. In medieval Europe, the economies of feudal manors were a kind of barter system, in which serfs turned over the majority of their crops to and did a few days a week or month of unpaid labor for the lord of the manor in exchange for protection during the many wars that were fought. But feudal barter wasn't restricted to serfs, in fact, the entire feudal system was one of barter! The king would give land to nobles in exchange for military service and loyalty, the higher nobles would further give land in exchange for military service and a form of rent, all the way down the line.