Re: Putting Chartalism In Its Place?

["Forstater, Mathew" <ForstaterM@xxxxxxxx>]

Barkley -

To address just one example, cowrie shells.

Up until now I either didn't think of cowries as "money," or not in the
modern sense.  But I stumbled onto some interesting stuff.

Paul E. Lovejoy, in his article on "Interregional Monetary Flows in the
Precolonial trade of Nigeria" writes:

"Dependencies of such emirates as Nupe paid their levies in cowries as
well, so that the taxation system effectively assured that people
participated in the market economy and used the currency, a policy
remarkably similar to the one which the later colonial regimes pursued
in their efforts to see their own currencies accepted." (1974, p. 581)

Robin Law, in "Slaves, Trade, and the Material Basis of Political Power
in Precolonial West Africa" concurs:

"The apparent preference to the payment of taxes in money-cowries or
gold-is especially interesting.  It must be assumed that the spread of
the use of cowry shells as money in West Africa depended upon state
initiative-this was certainly the case with the introduction of the
cowry currency in Bornu in the 1840s." (1978, p. 49)

What about the fact that monopoly issue, then?  If anyone can gather
cowries, it would mean that the state had no monopoly, no?

In the same article and again in THE OYO EMPIRE, c. 1600-1836, Law
informs us that "it appears that the issue of *strung* cowries was a
monopoly of the palace" (1978, p. 49).  This refers to strings of
specific numbers of cowries, and specific numbers of strings collected
in a "head." (1977, p. 209).  Also, the areas that used cowries were
often areas where they were not available-far into the mainland, and
even areas where cowries were not available even in the sea.


Lovejoy, Paul E., 1974, "Interregional Monetary Flows in the Precolonial
Trade of Nigeria," Journal of African History, Volume XV, No. 4, pp.
563-585.


Law, Robin, 1978, "Slaves, Trade, and Taxes: The Material Basis of
Political Power in Precolonial West Africa," Research in Economic
Anthropology, Volume 1, pp. 37-52.


Law, Robin, 1977, The Oyo Empire, c. 1600-c. 1836: A West African
Imperialism in the Era of the Atlantic Slave Trade, Oxford: Clarendon
Press.

I am not saying that this means that all examples are like this. But it
is possible that many more are than we thought. It is important to
remember that the term "state money" is a little misleading. The issuing
authority does not have to be a "state."  It could be a church, palace,
actually any political authority.  The only requirements are the power
to impose obligations of some kind, whether called 'tax' or anything
else, and the power to name that which will settle the obligation.  As
Lerner says in his entry on "Money" in Encyclopedia Britannica, 1946:

"Any particular seller will accept as money what he can use for buying
things himself or for settling his own obligations.  This seems to say
that a means of payment will be generally acceptable if it is already
generally acceptable, and it looks like a circular argument.  But it
only means that general acceptability is not easily established.
General acceptability may come about gradually.  If a growing number of
people are willing to accept payment in a particular form, this makes
others willing to accept that kind of payment.  General acceptability
may be established rapidly if very important sellers or creditors are
willing to accept payment in a particular form of money.  For example if
the government announces its readiness to accept a certain means of
payment in settlement of taxes, taxpayers will be willing to accept this
means of payment because they can use it to pay taxes.  Everyone else
will then be willing to accept it because they can use it to buy things
from the taxpayers, or to pay debts to them, or to make payments to
others who have to make payments to the taxpayers, and so on."  (p. 693)

best,

Mat