The History of Paper Money - Origins of Exchange - Extra History - Part 1

The Brothers Gracchi and how republics fall, Part 1 - Extra History
Rome had expanded rapidly during the 2nd century BCE. It now stretched from Spain to Greece, with holdings in Africa, and showed no signs of stopping. At home, this growth destabilized the entire economy. Slaves from captured lands became field workers for the wealthy. Common soldiers who used to own land could no longer tend it during the long campaigns, and returned to find themselves either bankrupt or forced to sell to the large slave-owning elites. Now these displaced landowners flooded Rome looking for work, but many of them remained unemployed or underemployed. In the midst of this, two boys named Tiberius and Gaius were born to the Gracchus family. They were plebeians but of the most distinguished order. Their mother, Cornelia, was the daughter of Scipio Africanus. Their father was a two-time consul who'd celebrated two triumphs for winning great campaigns. But their father died early, so Cornelia raised her children alone and made sure they had a firm grounding in the liberal arts. As soon as he could, the elder boy, Tiberius, ran for office as a military tribune and joined the final campaign against Carthage. There he earned great honor for himself and learned from the Scipio Aemilianus, his half-brother who also happened to be the leading general. Upon return to Rome, he ran for quaeastor and was sent to serve in the Numantian Wars in Spain. This time, the general he served under was struggling and suffered defeat after defeat. At the end, he tried to flee, only to be captured by the Numantians along with the entire army. The Numantians insisted on discussing surrender terms with Tiberius Gracchus, whose father had long ago earned their respect, and he successfully negotiated the release of 20,000 captured soldiers. In Rome, however, the elites looked on his treaty with scorn: they felt his surrender made Rome look weak. The families of the soldiers had a far different perspective: they celebrated Tiberius, and even saved him from punishment at the hands of the Senate. He had learned that power could be found in appealing to the people.
* Watch Extra History ad-free & get 1-week early access on NEBULA go.nebula.tv/extrahistory
* Suggest & Vote on our next episodes, get exclusive content & 24-hour early access on PATREON bit.ly/EHPatreon
* Show off your fandom with MERCH from our store! extracredits.store/
Interested in sponsoring an episode? Email us: [e-mail]
TWITTER: bit.ly/ECTweet I FACEBOOK: bit.ly/ECFBPage
INSTAGRAM: bit.ly/ECisonInstagram I TIKTOK: bit.ly/ECtiktokz
BLUESKY: bit.ly/ECBlueSky I TWITCH: bit.ly/ECtwitch
GAMING: / @extracredits
Miss an episode in our Brothers Gracchi Series?
Part 1 - • The Brothers Gracchi -...
Part 2 - • The Brothers Gracchi -...
Part 3 - • The Brothers Gracchi -...
Part 4 - • The Brothers Gracchi -...
Part 5 - • The Brothers Gracchi -...
Series Wrap-up & Lies Episode - • The Brothers Gracchi -...
♪ "Air & Light" by Sean and Dean Kiner - Available on Patreon! - • ♫ "Air and Light" - Se...
Thanks for the high-quality conversations & for following our community guidelines here: bit.ly/ECFansRNice
Artist: David Hueso I Writer: James Portnow I Voice: Daniel Floyd I Editor: Carrie Floyd I ♪ Extra History Theme by Demetori: bit.ly/1EQA5N7
#ExtraHistory #Money #History

[@LittleJimmy835]

The vending machines on the island of Yap must be ENORMOUS!

[@Max-bg7oo]

Lol

[@riegerthome8832]

You are so right

[@kzrockstar9717]

Just think of the size of the gumball dispensers.

[@Chinaball-fx7gi]

@@kzrockstar9717 Huge coins, small balls

[@va960]

Pfff... those crustaceous cheapskates......

[@michaeltnk1135]

Isn’t there a spongebob joke about Mr Krab’s first dime being a giant limestone coin

[@bigshoelmfao]

yeah

[@kingofthings7929]

He’s been in business a long time.

[@lilperidot8783]

Oh yeah... it's all coming together...

[@SovietWomble]

That was a good episode. I liked it. Something I'd not really thought of before with a very interesting tangent. Extra History is absolutely your strength guys, keep at it.

[@aniellord7088]

I'm kinda late here but. Hi SovietWomble! I also love your videos! Hahaha

[@troglodytes3041]

Badgers

[@raviothethief8292]

SovietWomble where did you come from!

[@AGenericAccount]

waaaaaaaaaaaaaaaait. Amazing.

[@jeffrykristianto5125]

Wtd

[@Shutendoji]

Fun fact, the Chinese character 貝 that means something precious are part of a lot of compound characters related to trade and finance like 賬 "account" 資 "capital" 財 "wealth" 賦 "tax" 費 "expenses" 買 "to buy". And what is 貝 exactly? Well, it's a stylised image of a cowry shell, the jagged lines of the shell's opening having turned into straight lines throughout the millennia. So in the very written language, we can see that cowries were indeed a precious commodity in ancient China.

[@m.m.1301]

The use of cowrie shells was so wide that the word "money" comes from latin "moneta" which indicated a type of cowrie

[@marloyorkrodriguez9975]

The more you know

[@r7ahtesham885]

No wonder China is still Capitalist.

[@genesis6567-]

🦠stay safe everyone

[@jp4431]

@@r7ahtesham885 no one will ever say no to less money

[@BuddyWhite616]

The fact they counted the stone at the bottom of the ocean is awesome

[@papagaiofilmes6642]

They shouldn't. It is Mr. Krabs' first penny now.

[@amellirizarry9503]

The most interesting part is that's cases like this, of people using intangible credit arrangements for transactions are not rare at all in the anthropological record, some argue that historically they've been more common than commodity based systems, You should check "Debt the first five thousand years" by David Graeber, he was an American anthropologists and in that book he describes a lot about cases like this, and argue for some interesting alternative monetary theories

[@brycevo]

I mean, some people drink their paychecks away, but this takes it to a new level

[@leonardocleaningllc1952]

I pay people sometimes in beer.

[@jxc1640]

I've heard of some people in USSR/Russia being paid in alcohol, kind of doubt that but then again it's Russia so maybe it's true

[@imveryangryitsnotbutter]

4:14 - 4:19 "This is a dime??" "I've been in business a long time, boy."

[@duckquack8562]

Lol that took me a second to figure that out

[@liamweaver2944]

Yay! I’m not the only one who noticed! “LISTEN YOU CRUSTACEOUS CHEAPSKATE! SQUIDWARD’S BEEN LIVING AT MY HOUSE DRIVING ME CRAZY. AND YOU’RE NOT GONNA HIRE HIM BACK ALL BECAUSE OF A STUPID DIME?!!!"

[@liamweaver2944]

@Age Restrictions What's that?

[@mmmirei]

Salt was money. The more salt you had, the richer you were, cause salt was really hard to find. The word salary came from salt.

[@tomlxyz]

A time when being salty was a good thing

[@henrygustavekrausse7459]

Not in most places only the saltless ones.

[@agiri891]

@Hell Fire3 he just asked for a source lol

[@Descension.]

Dude.. I could have been a millionaire by now... damnit

[@icraftcrafts8685]

and there's a saying “worth its weight in salt" for the value of something, related to your info

[@Duke_of_Lorraine]

I have my own theory about why we switched to paper money : you cannot roll gold to form a straw to take cocaine.

[@Necrapocalypse]

Sounds like the mentality of a quitter

[@wahlex841]

Well, if you try hard enough ...

[@RoberttheWise]

That sounds frighteningly plausible.

[@Necrapocalypse]

I mean, pure gold is pretty malleable right?

[@Ergogre]

If the gold was completely pure you actually could, but then you can't really use it as coinage. Also it would be confusing for what good to cut for half and sell on.

[@adamblakeslee5301]

If I remember right, many early societies would actually use credit for their neighbors and friends. People would keep track of who owed what and simply trust that they would pay when they could. Outsiders were the ones that paid up front.

[@RiotGearEpsilon]

Yes!

[@charx225]

This. The idea of a barter society bringing about a currency-based society has existed for a long time, but doesn't really have too much supporting evidence. The idea that a fisherman can't gift food to a farmer, expecting to one day be compensated, is ignoring history.

[@garethsmith3036]

***cough**thisvideoshaftedavidgraeber***cough****

[@shakiMiki]

The video has got it wrong. Money was developed as a way of storing debt not to deal with the problems of bartering. Debt: The First 5,000 Years of DEBT by anthropologist David Graeber published in 2011 is the seminal study.

[@Theo-oh3jk]

@@shakiMiki I've been meaning to read that book. The idea seems odd to me: how does money (something with value) store debt, instead? Could you give me a brief summary? Thanks! :)

[@seafoamtaide]

The stone circle system sounds like an amazing story and I love it, especially because it puts such a spin on money that makes me go 'wait why is this weird paper stuff our currency again?' It's great.

[@memolano100]

“You could literally drink your paycheck” 🤣

[@jetboy_]

dude i was looking to see if anyone else has been gotten by that, i had to stop the video until i was finished i was so hysterical.

[@starleigh6680]

liquefied assests

[@starleigh6680]

@Rayan Assouli wowwowwowdfx

[@starleigh6680]

@Rayan Assouli you send the request if you want to firend

[@Derekivery]

You could literally piss away your bonus

[@DragoniteSpam]

James talked about this one right after the South Seas story, and I have been waiting for it ever since. It is finally here. (Oh yeah and the Walpole ties should be good, too.)

[@timothymclean]

I wonder if they'll only do the one.

[@robertwalpole360]

They always are. ;)

[@hanoufnouf5278]

Who's walpole

[@fgregerfeaxcwfeffece]

I think the anime "spice and wolf" did a good job at explaining this economy stuff.

[@kinghumanity]

S&W went more in depth about stock trading and manipulation, and currencies was just mentioned in-passing. Still, a very good show that's worth watching.

[@erichouser2434]

It did an even better job of illustrating reverse sexism too.

[@awdrifter3394]

The anime C also touched on some of these concepts.

[@MrTooawesomeforaname]

Still waiting for season 3..

[@DDdreamer90]

@Eric houser: Reverse sexism? Isn't that just plain ol' sexism anyway? xD In any case, what exactly are you referring to. I'm a big fan of S&W myself and don't quite see what you're getting at.

[@user-ws9ko1pu1y]

"How did humanity come to accept rectangular pieces of pulped trees as something to spend eight to ten hours a day working for?" When you put it that way..

[@AatiNiiranen]

well i mean like uuhh

[@yesyes13123]

to pay bank's debt and pay you bills

[@ahmedace4911]

Best intro everrrr !!

[@soulless466]

"I will trade you 10 cows for.... your whole country, your life, your wife(s), 50 cows and ofc a link to never gonna give you up" Me: "Hmmmmmmmmmmm you sir have got yourself a deal"

[@GoogleAccount-sk2ry]

1:48 I laughed out loud at that "if I don't want you stupid food". It was so unecessary and out of nowhere hahah

[@extrahistory]

It's awesome to see the questions about barter coming up. I'm planning on talking about this in Lies, but how goods exchange worked before commodity currency is...contentious. And it doesn't help that Adam Smith sort of made up "Barter" since he comes with all sorts of baggage in the academic world. From what I've read, basically "gift exchange with haggling" seems like the most like origin point for exchange of goods, but that whole debate is waaaaay more than I had time to get into here. To give you another preview of Lies...when we get to the last episode you'll probably notice that this series ends right before the point in time where we'd be talking about the idea of the petrol-dollar...which is hugely important in the ongoing argument about whether we have a true "fiat" currency...and so also going to be covered in lies ; ) -JP

[@JonathanWJ]

For the record, I would be just as interested, if not more interested, in the development of the petrodollar than the development of paper money. Really interesting subject.

[@larspeloquin6493]

Respectfully, I think you should consider the research of the Cambridge anthropologist Caroline Humphrey who tried and failed to find any real-world examples of barter economies. She wrote: “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.” That includes the ancient Greeks, Indians, and Chinese who independently invented coinage. And the idea that the Sumerians had a barter economy is inconsistent with your video on the origin of writing. I think it would make more sense to say that debt, credit, and a variety social and prestige currencies all existed on a continuum of what we today call money. And until any evidence of a barter economy arrives, we should consider it to be a myth.

[@Timberhawk]

Sounds like someone may've read "Debt: The First 5,000 Years". :D

[@dangime]

I'd worry more about how it currently looks like you're promoting fiat currencies as a method of stealing purchasing power from people to fight larger wars? Let's face it most wars aren't good vs evil, and anything that kept them smaller, like people not wanting to waste their money on them, would be a good thing.

[@mkvenner2]

+Frank JohnsonIn war you fight to win and you use any means at your disposal to do so including money.

[@kevindowney5256]

Just gotta say, EC is a really fun series. You do a great job at creating a not-as-simple-as-it-sounds narrative by addressing just the right points.

[@calijones6023]

I just wanted to say that I'm taking a macroeconomics class and I watched your video long before I took this class. I find it really awesome that you use the exact terminology and make something that I probably would have had a problem conceptualizing into something easily digestible for me. THANK YOU!

[@rmsgrey]

Barter-system == video-game fetch quest

[@AegixDrakan]

Where a Yoshi Doll you won at a crane game is eventually worth as much as a new magic sword. ...Or something like that. I might be confusing my Zelda games here.

[@Theraot]

Yoshi doll to Magnifying Lens, that would be Links Awakening. The Noble Sword is the Oracle games, from a Cuccodex in seasons and from the Poe Clock in ages. No, I didn't remember either, I looked it up.

[@GeneralLuigiTBC]

My thoughts exactly.

[@AegixDrakan]

***** Thanks for reminding me. It's been around 7 to 10 years, I think, since I last played the Oracle games. XD

[@kimarous]

I'll hatch the egg to get the cucco to trade for a blue cucco to wake the man to bring the mushroom to be turned into powder that will be traded for the saw that will be exchanged for the broken hilt that cannot be fixed unless you bring the prescription to get the eyedrop frog that gets turned into eyedrops so the smith can recreate the sword in three days.

[@preoklenthe]

Is it just me or that picture of Dan with a formal hairstyle looks really neat?

[@WannabeCanadianDev]

He looks Dapper.

[@robin-vt1qj]

thats brave in dutch

[@WannabeCanadianDev]

robin van Sint Annaland The language that's so hard even Germans are like "Fuck no."

[@blake-81]

If you remove Dan's bow, he looks surprisingly similar to Kraft Lawrence from Spice and Wolf.....

[@WannabeCanadianDev]

Blake 81 That would be amazing.

[@imarginacionmxd]

I like your content

[@iron4517]

Ah yes a video about money

[@abbynady]

who doesnt

[@jirijindra7121]

I want to say thank you! You really helped me with the outline of my uni assignment. I had to use some books too, but your video kick-started my work. Great video, keep up the great work!

[@dr.zoidberg8666]

I was surprised that they didn't address people's solution for the coincidence of wants before intermediary 'currency' started to exist. Just so everyone knows, people didn't sit around starving for thousands of years because they couldn't trade a fish for a corn in the winter. No, instead people developed a kind of credit system. So, a farmer who wants fish from the fisherman but doesn't have their harvest in yet would instead do favors for the fisherman which they would both agree amounted to the value of a fish. In fact, people would do these favors in advance, & simply keep track in their head who had done favors for who. So, maybe I need a fish & I had helped you rebuild your hut a few months ago after it was knocked down in a particularly bad storm. I could call upon the value of that favor & cash it in for a fish.

[@RiotGearEpsilon]

Yes!

[@DxTr9]

Exactly. Bartering as a precursor to currency is mostly a theory developed in the 18th century in Europe, with no actual evidence in the real world. Bartering became more common when Europeans traded with distant people in distant places that didn't have currency (or didn't accept gold/silver as currency).

[@michaelpattie9248]

On a side note, the bartering in North America basically treated the beaver pelt as a unit of exchange. Not a currency, but a common commodity to be measured against, so a lantern might be worth 3 pelts and a rifle worth 2. If I were trading you a lantern, I would expect more than just a rifle to account for that third pelt. Granted, when most people came into a frontier trading post on the Canadian frontier, they came to trade fur for supplies, so the rifle for lantern example wouldn't come up much.

[@DarkarDengeno]

This is just what I was thinking of. In fact, I remember seeing an anthropologist use this fact to set a hard limit on the size of pre-writing communities: if you can't personally know everyone you trade with on a regular basis, you can't remember who owes you what.

[@dr.zoidberg8666]

Darkar Dengeno Was that in a KZbin video? If it was, would you please link to it? I'd like to see what they have to say.

[@Silverraptorvideos]

This brings me back to my economics class. Except much better told, well done!

[@jaeyounglee5410]

I did a dbq yesterday and it was about silvers political and economical effects on the world and i talked about inflation. I feel smart now

[@Atratzu]

I haven't thought about this aspect of economics in forever! This was fantastic, great video!

[@rngwrldngnr]

Hilariously, according to Wikipedia the Rai Stones (Yapanese currency) started as much more portable beads. They go so large when trade was established with outsiders and common metal tools made excavating the beads far too easy. So it was a way to stave off hyperinflation.

[@Kapuist1]

I think it's great that you guys focus on these slightly less glamorous aspects of history, or histories of ideas, technologies, etc. rather than just the usual stuff (wars, battles, and the like). It's good to have some balance.

[@melimel4275]

I’m so happy to have found this channel! I’m going to be using these in my homeschool lessons. These look a lot like Spirit Science. I love it!

[@sarahgill8327]

Hey, great episode as always. There is something you may want to look into for the "Lies" episode for this: the barter system, described by Adam Smith and used in many Economics classes to describe the history of money, may never have existed. For instance the esteemed anthropologist Caroline Humphrey wrote: "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" (Humphrey, qtd in Graeber, p.29). Graeber, David. (2011). Debt. New York: Melville House Publishing Humphrey, Caroline. (1985). Barter and Economic Disintegration. Man, 20(1), 48-72.

[@Donutgames00]

So that's how mr.krabs got his 1st dime

[@et496]

Donutgames00 lol

[@justmovedin]

This helped me a lot since I just started studying Economics! Thanks Extra History!

[@johnmyers4555]

I had a test this spring about the development and use of money and so, I sought out videos to try to help myself make sense of the big picture. I'm so glad I came upon this video because now, I've watched every extra history series you've put out.

[@Patrick-ud3vu]

Lol @ the dragon sitting on the gold because it's a draconian concept. 😂

[@monkeydetonation]

Why let bankruptcy get in the way of a good crusade?

[@chloechin3412]

lol

[@niccatipay]

Ikr, just print more money. ~ Federal reserve

[@OctopusWilson]

This episode is why I love Extra History

[@KnakuanaRka]

2:10 I love that “Well, there’s gonna be trouble” bit, especially the image. Image at 5:49 is pretty good, too.

[@Pastshelfdate]

Again, TARDIS - thanks! And the cowrie shell: I would have guessed a precious metal, also. I guess the cowrie was wider spread, but still sufficiently difficult to acquire. I'm glad cowries weren't hunted to extinction. And always I love the art, including the reference to Marvel's Havoc. :)

[@hagamapama]

On the subject of odd currencies -- my native New England was the source of one. Nutmeg. We weren't a source of nutmeg of course, but we were a source of Yankee peddlers, called Nutmeggers, large groups of itinerant wanderers plied the American backwoods trading small items and exploring, and always with a small package of the valuable spice tucked somewhere in their luggage. Early American cooks used nutmeg for everything so nutmeg seeds were in enough demand that a Yankee peddler could usually count on being able to trade them for the supplies he needed to continue his travels, or for a roof over his head if the weather turned bad. However, like with anything else, there was a problem, and the problem was counterfeiting. It says something about how valuable nutmeg was back then that there was a problem with counterfeit nutmeg, but there was -- nutmeg seeds carved out of wood, passed off to unscrupulous people who don't do their due dilligence on the good they're trading for. Eventually that, combined with some financial chicanery on the East Coast that's a story all by itself, was enough to collapse the nutmeg market, but because he happened so early in our history, the Yankee nutmegger still lingers around in the back of the national consciousness.

[@hmelnyczuk]

You should read Debt by David Graeber, he refutes the prehistory of money being based on bartering since there is basically no historical evidence that societies worked on the strict satisfaction of coinciding wants until after the invention of money and coinage.

[@pinkdogroslyn8832]

I love how you use RDR to represent a “lawless land”

[@Twisted_Code]

Yap's monetary system is quite remarkable. Thanks for educating us about it!

[@rossmallo]

4:46 - 4:54 Well, that just made shell-collecting in Animal Crossing make a lot more sense all of a sudden.

[@deldarel]

"and no, it's not gold" Haha, I'm smart. I know it's salt. "It's the cowrie shell" WHAT?

[@deepakgurung5672]

Animations on every presentation on this channel is so much to the point that it requires no imagination and it's self explanatory.

[@kentuckycrittercamera9407]

I love your work, it’s very informative and entertaining.

[@Jembii]

"Oh, how will I pay? I've got one donut rock at the bottom of the sea. It's your's now"

[@EGV88]

Awesome idea to put a Smaug reference there!

[@aidanwansbrough7495]

Love your videos! The way you explain things is so interesting!!

[@Peptuck]

I loved the fact that the infographic at 3:13 used teeth as an example of possible money. Makes the Ork fan in me proud.

[@theperpetual8348]

"join us next as we-" AAAARGH MUST I WAIT?!

[@Noelle808]

Oh no, I can hear the gold standard people rushing in already.

[@AgusSimoncelli]

Aaaaaaaand they're here

[@Theraot]

Why let a little shortage get in the way of a good gold standard?

[@abyssaljam441]

No... Sliced bread Standard's where it's at!

[@Thraim.]

I love them. They refuse the idea of giving imaginary value to pieces of paper in favour of giving imaginary value to pieces of metal.

[@ShneekeyTheLost]

The high value on gold is arbitrary. It has actually very little intrinsic value, mostly in electronics and wiring. It is a poor tool metal, comparable to lead, has a high density and so weighs far more for comparable volume, meaning cumbersome and awkward to carry around. The only reason gold has such a high value is because people assign it a high value as a commonly traded third-party commodity, which is no different than assigning a high value to a piece of paper for the same reason. The only difference USED to be that you can always print more paper, but you can't just print gold. However, when devaluation became a thing, that argument went out the window.

[@evanrudibaugh8772]

I love the idea of people in Yap arguing about the value of physical stone circles and semi-imaginary underwater fiat stone circles.

[@vjjoshua83]

SO CUT AND CLEAR IN THE EXPLANATION.. SO GOOD FOR ANYONE TO UNDERSTAND

[@sofer2230]

3:47 Mr. Krabs's first dime!

[@jmiquelmb]

When I was young, Zelda's chain of item trading quests showed me how useful money is

[@Orrphoiz]

I'm glad you guys decided to do this episode. The current monetary system is broken, and it's broken everywhere. Looking back on exactly how it came to be is an important step in trying to fix it.

[@justkubo]

The fact that you can makr a whole series is even better

[@HypnotizeCampPosse]

7:33 wow, this is the first time i have ever heard someone acknowledge this fact

[@DroidFreak36]

I always thought that the "cowrie shells" used as currency in Mata Nui Online Game 2 were just some made up currency. Turns out some clever designer knew about real life cowry shells. :P

[@Jamum100]

Yapese stone money! It was the first thing that popped into my mind when you were introducing the tangent lol. Being from there, it brings warm fuzzies to see us mentioned :)

[@user-cd4bx6uq1y]

Alright so I went from oversimplified to fun stories to fun bureaucracy to fun things in science to actually important things to here. Man, hoi4 opens up so many opportunities

[@brokenrecords123]

"Is that (toilet)paper?" LOL

[@jimmynyarlathotep6857]

I'm not sure about the early part on Coincidence of Wants. Historic consensus for a goodly while (Based on anthropological research of contemporary groups) has shewn that 'barter trade' as discussed only existed between two sets of foreigners, or in situations where mistrust had occurred. the bulk of trade in 'primitive societies' used favours, debts and other forms of social capital as 'money'. Monetary tokens as described in the second part (after 3:20) were the eventual quantification and simplification of this complex favour-nexus.

[@djprogramer973]

Don't know why but I watch this whole series atleast once every few months

[@spogansamsamsamsamsam5480]

To expand on: Coincidence of wants (or lack thereof) only really becomes an issue in trade driving the necessity of an intermediary good of established value when the groups of people trading with each other become too large to all share intimate relationships. Within the realm of up to, say, 200 people, possibly slightly less but likely a fair bit more, each individual is indebted to many others within the community. eg "It's not an issue that George won't have grain to pay for my fish until the harvest season, because I know George and he's not going anywhere. So for now, I'll share my fish with George, and when the harvest comes George will share his grain with me." Trade systems only require an established staple when traders can no longer share close relationships and trust with each other. (When trade systems begin to expand beyond smaller communities) Thanks so much for making some awesome educational content, I love all this team's work so much! Ps to my etymologically inclined friends, you know why George is the farmer here!

[@grfrjiglstan]

My question is, how do you make change for a shell? For coins, you can just make a smaller coin for a lesser denomination, but with shells, you're stuck with a single denomination for each. Same with cattle - do you make change in calves?

[@thetruerift]

Carried credit, actually. Crash Course did a piece on credit and barter in their second world history series

[@timothymclean]

I'd imagine that either change would be made in lesser goods ("I'm not willing to give up a whole cow just for that nice dress...throw in that necklace over there and we're good") or just ignored. A good number of pre-currency societies were composed of a small number of people who all knew and (hence) trusted each other, in a way that tribes and cities with population in the tens of thousands couldn't.

[@Slash-XVI]

This problem basically persists until you include electronic currency. There always will be a smallest possible unit of currency, whether that is a cattle, a shell or a penny, if you wanted to purchase something which has less value than that, you are gonna have some problems. Sure if you do have coinage of sorts you could make a smaller unit but at some point it starts to get unreasonable (not enough use cases, too heavy for its worth, too expensive to produce). Think of something you need to buy nowadays that is actually very cheap (per unit): Electricity. You can get a Joule of electrical Energy for less than a cent, so how do things work: you just pay for the larger amount of electricity you need for a year. The same principle could be applied to different trades aswell (though I am not a historian,so I am not certain what the actual practice was)

[@Slash-XVI]

TheRezro "No. Electronic replaced paper as data storage but it is still this same." In theory there is no problem in paying 0.00001 cents in electronic currency, in fact most cases of interest are calculated way more accurately than to the cent, they are then rounded. Electronic currency does solve the problems of having distinc money sizes, because it is both easy and inexpensive to portray a smaller amount of money. In the second part I was trying for a parallel between, I need potatoes, but all I have is a cow and something that is a more usual comparison with modern monetary means. As you have pointed out the advantages of electronic currency do show. I never intended to suggest electricity as an alternative form of currency (it would be aweful at that)

[@RoberttheWise]

Not exactly. Electronic currency still has limited precision as you don't have proper Real Numbers in a computer but just an approximation to a certain degree of precision. The problem is the same as with regular currency, gold backed or not. You have to break it down small enough that nobody cares. It is only that doing so by increasing the precision of your number representation in the accounting software is much more easier and cheaper than making smaller physical currency units. But modern currencies are actually already subdivided to much for the most use cases. In both € and $ the single cent coin denominates less than the production costs and is too much hassle to use for people to care. Hence the initiatives to abolish pennies and round up to the next 0,05 $/€. Electronic currency gets away with higher precision but there is also a practical limit at which the rounding errors are just let be.

[@truetrash5164]

Sometimes I hear paper money and I'm like "what? We use plas- oh, right I'm Canadian.

[@Desintyx2]

True trash same for us in Australia

[@MonzennCarloMallari]

Listened to the episode a week late, was concerned that the barter system was discussed without the context of the credit system, but then saw the responses and James' response as well. Wasn't disappointed :)

[@djprogramer973]

You know that you're making great content when you start to crave educational videos

[@bennani4431]

can you do a video on the history of banking pleasee !! it's just the whole process of banking is blurry in my mind

[@TheOhgodineedaname]

Alright I give you one twentieth of my cow for your hat and i'll save up the other part of the cow for future purchases! It might have been nice if the video mentioned how coins made of precious metals are easily dividable and how the stamp on it is a government guarantee of metal content.

[@Grizabeebles]

Finally! Now I'll have a convenient answer for all those people who want to switch the dollar back over to gold! Best link ever!

[@nicolasdunaway9415]

As a kid, I always wondered why we use money. Then I learned exactly this when I grew up. Keep up the good work fellas, can't wait for our next delicious piece of history

[@nicolasdunaway9415]

And it's kool to know what started money

[@Znes97]

Que buen vídeo, me sirvió un montón!!, que bueno que esta en español y la traducción esta excelente.

[@josephattwell1006]

6:31 Don't you mean DEflation? Inflation is when the value of any unit of currency goes down, normally from the supply of money being higher than the demand. Deflation is when the value of any unit of currency goes UP, normally from the supply of money being lower than demand.

[@ShaiM182]

there is so many things wrong here... it's hard to focus just on one thing.

[@Kridr1]

______/ Move feet away

[@pallingtontheshrike6374]

I'm pretty sure inflation because they're making so much alternate money like paper money to where inflation occurs

[@MyTomServo]

Of the gold/silver in the coin or the commodities they were intended to buy? Inflation of the gold/silver, deflation of the everything else bought with it.

[@Skooteh]

+ShaiM182 do you mind elaborating? I'm legitimately interested. All their content suffers from oversimplification but I haven't caught anything (else) that's wrong. I definitely don't know much about this stuff though.

[@swadow1497]

This is probably one of the best songs (the outro song) that ever existed in an extra history series.

[@JoeMazzolaTheFirstPersonCook]

I'm normally too poor to care about economics but you guys are entertaining enough that I'll keep watching

[@alexiswilliams4489]

When he says that so much silver ended up in China, it caused inflation in Europe, shouldn't that be deflation?

[@kryptonianguest1903]

Only if the Europeans were using silver as money.

[@kot1pelto]

You, my friend, are asking the correct questions. I enjoy this channel, but I still verify all content.

[@neeneko]

Hrm. I always got the impression that the 'barter economy' thing was more of a modern myth/retcon and currencies were something that came about in order to facilitate taxation.

[@SurmaSampo]

Their imagination. The easiest example for most western people to find is in the Torah where taxes where paid to the church in goods. Also there are many documented instances of standard commodity currency like cows, shells, grain, salt, etc, that feature in numerous barter systems. Fun fact is that writing was invented to track and manage taxes, that's right human created writing so that reliable tax accounting could be done, not to keep histories or facilitate artistic expression.

[@DemagogueBibleStudy]

The Illuminati did it! AAAAAAAAAAAAAAAHHHHHHHHHHH!

[@neeneko]

Well, one pop science example would be: www.theatlantic.com/business/archive/2016/02/barter-society-myth/471051/ Over the years, pretty much every anthropologist I have talked to has been annoyed at how wrong the common images of early civilization are. The image of the 'barter economy' came out of people pushing capitalistic systems wanting to contrast their improvement yet highlight how fundamental the thing they are addressing is. It was the economic equiv of the raw food or paleo diet.

[@SurmaSampo]

neeneko So, I hate to tell you but all the descriptive tools used to explains systems of trade or exchange in econ 101 are crude models. Economics doesn't care about the various cultural trappings around the exchange and the "gift" economy or status economy is a feature of communism or communal ownership of production. The fisherman gives the fish because that is his role within the community to be able be part of the community and benefit from it's collective efforts. It doesn't matter if barter only occurred between communities rather than within them or if there where rituals involved. Also the idea that transference of debt isn't a feature of barter is nonsense. Anthropologists in this article are presenting a straw man because they don't unde4rstand the discipline, and it should be noted that barter still occurs today, even between large corporations.

[@neeneko]

Speaking as someone who works with economic models for a living, I found their understanding to be just fine for the narrative they were addressing.

[@Master_WannaBe_]

Could we please have more videos like this for Extra History? Not just lessons about events or people, but also about ideas. Like how has politics, war, religion, or media evolved through out history

[@caffeecup5319]

Gotta love our ones and zeroes!

[@ElNeroDiablo]

Allonsy Extra History! :D

[@markmayonnaise1163]

I would like to donate a hyphen

[@montylemon9445]

+Mark Mayonnaise and ill buy a vowel

[@markmayonnaise1163]

LevelUpGaming Why? And I would like to donate an apostrophe.

[@Archgeek0]

3:34 -- why is that guy burning the filter of his cancer stick?

[@nathanbrown8680]

The better to get cancer from it.

[@wu1ming9shi]

probably drawn by someone who doesn't smoke. XD

[@Ibushi]

Maybe it's the type that you burn on both ends and have the ember in your mouth? My great grandmother used to smoke them (She lived to over a hundred. Take THAT, surgeon general!).

[@HeatherMcNabb]

You guys caught me- not only don't I smoke, but don't even know anyone who does so...mistake there

[@wu1ming9shi]

Heather McNabb haha, i didn't imagine the animator herself would comment on this. Anyway you're doing aa great job here, with some minor errors like this one. But hey, see it as something personal. An animator can only draw what he or she knows right?

[@metalman895]

Well, you got me. I'll watch Extra History too, Dan and Crew. I hope you're happy! Also, I was thinking about caps from Fallout the whole time! :)

[@sixpomegranateseeds6893]

I love the opener. Money only has the value we give it. It's not rare or special, it's everywhere. But somehow, one piece of paper with different printing has more worth than the same type of paper, with just a few less zeroes. Strange.

[@clownleecloud1294]

4:56 enemy sniper inbound

[@paulpeterson4216]

The "barter" economy described in the opening section of the video never really existed, because of the problems described. What did exist is now called a "gift" economy. I have these fish and I give them to you...later you have that grain and you give some to me. Ultimately the medium of exchange was status. If I give more than I get, I am seen as higher status. Paul Ryan would call me a "maker." However, status only counts among people you know, so there is a need for a medium of exchange that would be recognized across a wider group.

[@SurmaSampo]

So you are arguing that deferment of payment, often according to terms set at the time the barter transaction is made, makes it not barter?

[@zayag3543]

No he didn't say that.

[@SurmaSampo]

Isaiah Gilliland I am pretty sure he did and that the "we" he refers to being a part of aren't economists, but more likely anthropologists. For the purpose of the exchange the status of being seen as wealthy enough to be able to wait for payment is a by product of the exchange and not an intrinsic element of it. A true "gift" economy would allow you to gift the fish to the farmer and then have other people then gift to you in recognition of your generosity in turn without expecting payment. A trade involving the exchange of goods and services for a transfer of social status.Like being able to use up votes and likes to buy a car. This is better known as philanthropy and for a number of reasons isn't a sustainable economic model.

[@paulpeterson4216]

Surma Sampo "Gift economy" is what the sociologists call it. It's not something I made up. The "Barter economy" is something that 18th century economists assumed must have happened; however, currently available evidence suggests that there never really was such a thing. Also it was not philanthropy, it was more on the order of incurring a debt/someone owing you a favor. It's really not all that hard to keep track of within a fairly small group of people. And if you are a net provider, then you gain status, which has a value all its own. You can assert that it isn't a sustainable economy, but it seems that it managed to sustain for thousands of years.

[@keiyakins]

And they mention that offhand. In small communities that works, but it doesn't scale.

[@__________________________9367]

I recommended you guys to my social studies teacher and he has not got back to me but I know he'll enjoy

[@mounne13]

4:02 Mr. Krabbs's first dime he earned was a limestone donut. that's cool

[@briapryor1709]

When you already knew about this stuff because your a history nerd, and you accidentally found stuff about money and just kept going.

[@retards_play_games5032]

Watched this video series 4 times now but youtube keep reccomending it to me so I guess I have to watch it again

[@RuneChaosMarine]

@3:14 i love that you put the rope strings with knots on it, in this picture. though there is some debate on what that is for.

[@twogoatsofdoom]

There exists a counter argument that credit has a longer history then commodity money.

[@roguedogx]

okay so I finally have an argument for when "that section of the internet" decides to start going on about how we should go back to the gold standard.

[@matthewegan5281]

So the "Coincidence of Wants" is basically the basis for all video game fetch quests? Awesome!

[@masibuleleanele5824]

on fridayi was dooing my first economics classabout economic growth and pursuts found my self uing infomrmation i learned from this segment.. so im here to offer my apreciation

[@foxinthestars]

The book "Debt" by David Graeber (an anthropologist) offers a possible counterpoint to the idea of money solving the problem of bartering. As I recall, he claimed that social expectations could pretty much take care of that stuff on the local level (in fact everyone owing everyone a bit of this or that could be a form of social bonding), and that the introduction of money had more to do with government functions like fines, taxes, army wages, etc. Graeber is also an anarchist with his own viewpoint, and I haven't done enough research to say for sure if he's right, but it's an interesting perspective.

[@jimsykes6843]

Yes, see also this article which sums it up: www.theatlantic.com/business/archive/2016/02/barter-society-myth/471051/