Academic journal article Review of Social Economy

Hospitality versus Exchange: The Limits of Monetary Economies

Academic journal article Review of Social Economy

Hospitality versus Exchange: The Limits of Monetary Economies

Article excerpt

Abstract This paper attempts to specify theoretically the origins of money. Rather than the exchange-based view of neoclassical economists where money is seen as a transaction cost-reducing instrument (and where exchange itself is asserted to be a universal phenomenon), we argue that money is a social relationship, specifically a debt relationship, that emerges with propertied, class society. "Primitive" (pre-class) society could not generate money, as the rule of hospitality, universally practiced among such organizations, precluded debt and the self-interested behavior that is consistent with debt. Adopting the Chartalist position on the matter, we show that money is symptomatic of privilege, of inequality, of economic and political power.

Keywords: Chartalism, debt, exchange, hospitality, money, property


Early attempts to come to terms with ... a "primitive money/modern money" dichotomy ... confuse the issue by labeling as "primitive" what is obviously very much a modern phenomenon

(Gregory 1987: 555).

This paper demonstrates that money is a recent social invention that could not have existed prior to the development of propertied society: money cannot be more than "6,000" years old. Essentially, money is (or represents) a social debt relationship that rests on privately controlled productive property. By privately controlled productive property, we mean noncommunally controlled property, whereby a segment of the population claims exclusive rights over output produced by virtue of that control. This private control is not to be equated with modern private property. Indeed, early private control, such as that of the tribute or feudal society of Mesopotamia, was constrained by social obligations initially guaranteeing that private takings did not interfere with the right of subsistence of nonproperty holders. Early private control might better be understood as a private right to usufruct as long as the community was not disadvantaged.

This concern for the effects of privatization on the well-being of the community is evidenced as late as the seventeenth century in the theoretical defense of property by John Locke contained in his Two Treatises of Government (see Henry 1999). In Locke's famous argument, private property in the modern sense is permitted only if such appropriation did not work to the "prejudice" of another, and if sufficient land (property in general) remained unappropriated so those without property could produce their own subsistence (Henry 1999). By this time, however, the social separation of property holders from the community made a mockery of such concerns. Once the process of fragmentation began, privatization and money took on a symbiotic relationship, developments in one area feeding off and hastening developments in the other. Money supports further and more intensive privatization; privatization supports the further development of money. We have long existed in that period of social evolution where money, private property, and various other economic institutions are seen as normal and natural. Here, we seek a corrective to this standard view, for so pervasive are these tendencies that "there is a danger that one might try to find money in societies which did not even use it" (Wray 1998: 47).

In this paper we establish a theoretical foundation from which money can be explained, first through a cursory argument surrounding early, classless society [1] (which we shall term "tribal society"), then through a juxtaposition of the core features of such a society to characteristics of money. We demonstrate that such nonpropertied societies lacked the essential requirements that make money possible. Money is a two-sided balance sheet phenomenon that records a social debt relationship, which rests on privately controlled productive property. Money is never a physical "thing," though objects may well be used as an expression of the debt relation. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.