The Dark Origin of Money: Not for Trade or Bartering

Kevin Lankes
Jul 21
8 min read

Watch on YouTube: https://youtu.be/eIL6NVrSF9o

The world revolves around the idea that money is valuable. Gigantic moments in history, major upheavals, incredible exchanges of power, single monumental changes in the world at a global scale, all of these caused by money or the effects of money. Publilius Syrus of Rome wrote that, “Money alone sets all the world in motion.” But money is just paper. Or it’s numbers on a screen. Gold is a rock. How did we come from understanding that none of this had any value, to suddenly injecting all the importance in the world into the concept of money?

I’m Kevin Lankes and today we’re going to investigate the origins of money, where it came from, and why. For about 250 years, we’ve been taught that money came out of a bartering economy. The idea was that before we had money, people had to exchange goods and services to get what they needed. So if you were hungry you had to make something that a hunter or caveman Bobby Flay was interested in and hand that over. The person who had the food you wanted had to also like something that you had, and if they didn’t you had to find someone else with other food somewhere and see if they wanted your stuff, maybe caveman Guy Fieri. Then you had to decide on what the value of each thing was and come to an agreement on a fair exchange.

Money supposedly came in to simplify all this. It was a stand-in for what you possessed but couldn’t exchange because someone else didn’t want it. So instead, you could give them something that represented the value of your goods, and that’s where physical money is said to have come from. The other possibility in this case is that it was an IOU system that proved you would hand over goods or services at some future point.

However, and get ready for this because it’s a doozy. In the anthropological record, there is no evidence that money came out of a barter economy, and more shocking still, there’s no evidence that a barter economy ever existed in any human culture at all. Ever.

Cambridge anthropologist Caroline Humphrey once wrote that, “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money. All available ethnography suggests that there never has been such a thing.” Crazy.

So the whole thing where we talk about how early humans traded goods and services for other goods and services, and that’s how the early human economy worked and how we survived back then, well that’s all complete nonsense. It was totally made up by the father of free market capitalism, Adam Smith, in his book The Wealth of Nations. Ever since he published this tome in 1776, we all just went with his ideas about money. And they became the prevailing theory of the economic evolution of human society.

The evolution of my personal economic status is that I’m very poor. You know, donating to my Patreon or buying some super cool LDSFG merch from the website could help change that around. At the very least, please make sure to like and subscribe if you enjoy what I’m doing here so that I can keep building the momentum.

The only time we know of that barter was a large part of trade, and not anywhere near exclusively though, was during giant social cataclysms like the fall of the Roman Empire. Access to coins would decrease at those moments and so people sometimes bartered in order to get what they needed. Same thing would happen if there was some kind of apocalypse here in the U.S. We’d start trading in goods and services, but lots of people would still use paper money because it’s what we’re used to and what we’ve all agreed has value. Even though it has no intrinsic value on its own.

So then, if not barter, where did money really come from?

Well, in a literal sense, the first physical coins we know of popped up in the kingdom of Lydia, now part of Turkey, in the seventh century BCE. Before that, we commonly find that ancient humans used shells to represent money, or precious metals. Paper money first came about in China somewhere during the early Song Dynasty. And I really like that the article from the encyclopedia Brittanica where I found this fact goes on to state that paper money was first made from mulberry bark, and it actually makes the joke that technically money really did grow on trees.

Conceptually, there’s one really cool theory I like about why money was invented that’s pretty dark, and that I’ll get into in a second, but the truth is that nobody knows. The concept of money predates written records. In the Uruk period of ancient Sumeria, we already have all kinds of cuneiform tablets that document everyday transactions. The Sumerians were super detailed and organized about their record keeping, so we have tons of boring accounting documents.

One of the most fun is a 5,000-year-old cuneiform tablet excavated in 2016 that details how many beer rations workers were getting for from their employer. So a payslip in beer, which is pretty cool, and I suddenly feel like I’ve been missing out. We also have the oldest customer complaint on record in another cuneiform tablet from 1750 BCE. It’s from a reseller complaining about how a supplier shipped him shitty copper instead of the good stuff he thought he was buying. Funny story, but we also found that exact merchant’s house, and there were other tablets in there complaining about his copper and his delayed shipping times, too. Imagine making a clay tablet with a hollow reed and shipping it off to Jeff Bezos when your Prime two-day delivery is taking three days instead.

Okay, so lots of early writing that we have access to already assumed the concept of money was widespread. Sadly, that means we may never know where money came from. But the evidence we do have suggests that bartering economies never existed and trade didn’t come about the way we were taught. Valuables were exchanged for all kinds of reasons.

Early human cultures were much more operationally needs-based and communally focused. You had to be, or you’d die. It’s only nowadays that we can afford to be selfish. And we had one selfishly minded philosopher in Scotland write a book in 1776 that then became the foundation for the global economy, and he reverse-applied that sense of selfishness to our ancestral peoples in a way that’s just not remotely true or fair in any way. Indigenous peoples of the Americas, like the Iriquois, for example, they stocked all of their goods and supplies in longhouses, and all female councils would allocate those resources when it was necessary to do so. It wasn’t about quid pro quo like the revisionist capitalist dirtbags want you to think so you don’t punish them for their wealth-hoarding mental illness. It does appear from the evidence that societies were needs-based early on.

You also saw more favor-based economies, and I’m not sure anyone back then would have said they even really had an economy at all, they just did things for people as needed, because otherwise, again, death and sadness. Trading things of value was also discovered in the mating rituals of indigenous Australians by anthropologists in the 1940s. Men of visiting tribes would be dragged into the bushes by the women who lived in the village, and then the men would give the female villagers gifts afterwards, and the women would keep some and then also give some to their villager husbands. So money didn’t really have anything to do with trade or bartering in those cases, it served a more ritualistic purpose. And it felt much more like a colorful bird flashing its feathers at a potential mate. And, though it’s not an exact parallel, because it’s much less complicated and a little creepier than the Australian example, the dowries of more modern times in the western world come to mind in comparison. Kind of a similar vibe, although dowries have much more to do with financial transactions and ownership of women.

In terms of the original use of money, there’s one particular theory that makes a lot of sense to me, and that’s the idea that money originated because of something called weregild.

The word weregild translates from a proto-germanic dialect to “remuneration for a man.” It shows up in various forms after that in old Norse and old English, and other germanic languages and means the same thing throughout. Weregild was a fine that someone had to pay if they materially injured or killed another person. In Germanic nations from the middle ages where the word comes from, there was a complex legal system developed that sprang up around it. Different values became assigned for different people, depending on their class and rank in society. We have the weregild values from the Anglo Saxon kingdom of Northumbria, and I’ll put those up here.

During the tenth century in Europe it became too logistically complicated to enforce weregild, so criminals were instead subject to local authorities. And that’s when we see more classical corporal punishments like physical torture or death.

We can’t know for sure without discovering some ancient writings we’ve previously missed that account for this, or perhaps if somebody gets a hold of a time machine, but some precursor mechanism to weregild that served the same purpose may have spurred the creation of modern money. If caveman Jim got drunk on fermented tiger eyeball juice, and in a rage, pushed caveman Todd off a ledge into the sea, then there would need to be a system in place to both punish caveman Jim and make sure that caveman Todd’s family was satisfied and cared for. After the advent of agriculture and animal domestication, it’s theorized that fines may have been paid in livestock. But more importantly than what specifically was exchanged, the items or objects may have eventually been substituted for a standard currency. Because what if you didn’t have anything the other party needed? Then a substitute item could carry a certain attached value that everyone would agree on. Everybody agreed that caveman Jim only owed caveman Todd’s family just four pieces of shiny cave rock glitter because caveman Todd was kind of a dick, after all. Nobody was denying that.

The argument I’ve heard is that weregild payment was important because it settled early conflicts without further violence. Without weregild, you might have seen a lot of longstanding conflicts and blood fueds that just went on and on, like the famous one between the Hatfields and the Mccoys. Of course, those did happen, and we have evidence for countless blood fueds throughout history, but this is after the creation of money, and maybe money was what prevented those in early society.

Sadly, we’ll never know, but I think that weregild could be a solid explanation for the creation of something we all take for granted. Unfortunately, this thing that has no real value on its own is responsible for so much grief and pain today. It’s important that we understand the complicated history of money and its effects on humanity over time. Analyzing this will help us figure out the questions we need to ask to become the society we want to be. And it’s important that we don’t blindly trust the “common sense” economic narratives of our formal educations, especially because they simply rehash ideas from hundreds of years ago that have nothing to do with our current circumstances. Conservative economic philosophy is based on a projection of a system of trade that never was. It’s nostalgia for a nonexistent past. And there are two economies out there, one of the rich and one for the rest of us. And I did a video on that if you want to check it out.

Even though many things are bullshit it’s important not to fall into the trap of conspiracy either. Just stick to the real data and evidence, always. And let’s do some f*cking good about rational policy decisions based on actual reality. Analyze and discover factual evidence. Don’t just take things at face value. Unless it’s the face of Brutus, because the coin he minted after the assassination of Julius Caesar goes for like $4 million at auction. So yeah, his face is good.