In Deepest Anthropologia II: The Steel Axe Cuts Both Ways
The Limits of Libertarianism--and of Social Democracy

Timothy Burke Touches on Issues of Monetary Theory

In comments, he writes about:

Tim Burke: Comment: ...the concept of gift economies and status or reputation capital, that in some societies, manufactured goods were wanted less for some sense of their material utility and more because they could be used in existing forms of exchange centering on gifts and status accumulation. To give an African example, liquor was one of the things that some African elites wanted as payment for slaves, and the common assumption on the part of Westerners was that Africans wanted the alcohol in order to drink it. But in many cases, elites just stockpiled it and never consumed it. They weren't interested in its "real" or material utility: it was a kind of gift-currency. You could give the bottles to clients and at a later date use the circulation of gifts as a way to mobilize your clients for various kinds of labor. The clients didn't usually drink what they were given, either: they had their own stockpiles. A lot of gift exchange in the Pacific worked pretty similarly historically...

But the only reason that liquor was an effective gift currency, medium of market exchange, and way to store wealth was that it was both somewhat scarce and good to drink, no? In the ancient middle east gold was, similarly, an effective gift currency, medium of market exchange, and way to store wealth because it was both somewhat scarce and could easily be worked into beautiful objects.

One could write a paragraph analogous to Tim's about how:

precious metals are wanted less for some sense of their material utility and more because they can be used in existing forms of exchange. To give a modern example, gold has been commonly accepted in payment and the common assumption would be that those who accept gold do so because they can easily work it into beautiful objects. But in many cases elites just stockpiled it and never used it--go down to the basement of the Federal Reserve Bank of New york sometime. They weren't interested in its "real" or material utility, but only as a way to mobilize resources.

When some commodity turns into money, all of a sudden its most real--its most important--use-value is the fact that others will accept and value it in gift or exchange transations. Its real, material use-value becomes subordinate to its use-value as a liquid form of purchasing power. This is a strange and magical transformation. But it doesn't indicate that people who use other things than we do for money--whether shells or liquor or cigarettes--aren't interested in its "real or material utility." It's just that the fact that it has real or material utility has, in that particular social context, led to its acquiring the additional use-value of being a liquid medium of exchange.

We economists often find this: historians or anthropologists or sociologists talking about how the presence of valuable, portable, useful commodities that are never used or consumed shows the limits of the economist's utilitarian view of the world. To us, this point is incomprehensible: the liquor isn't drunk not because "cultural" factors overcome "economic" ones; the liquor isn't drunk because the bottle's use-value as a store of wealth and source of liquidity is greater than its use-value as drink--but without its use-value as drink the economic institutions that give it its greater use-value as money would not have developed.

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