Virtual money was already in use in ancient Mesopotamia, around 3500 BCE. Anthropology teaches us that people were using virtual money – credit – far before the inventions of coinage or bartering. When a family member or close friend asks you for something, do you start scheming about how you can benefit from the transaction? Certainly not but classical economics would have it otherwise.Įconomic theory actually has it backwards. The Pukhtun of northern Pakistan, for example, are famous for their hospitality, but use a form of barter called adal-badal for those to whom they have no social obligations. In most modern, pre-industrial societies, bartering is only done among strangers. However, there’s no actual evidence that bartering preceded money. Money was invented only to facilitate bartering later, the idea of credit was introduced. Economic history textbooks tell us that the earliest human exchanges were based on a bartering system.
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