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If a person from a culture that uses money was to try and introduce such a system to a tribe of people that use a barter-based system, how could they do this in the shortest amount of time? What methods are there that don't screw up the existing dynamics?

  1. The tribe can be considered to be around 500 - 1000 individuals.
  2. The person trying to introduce the system has no tradeable goods or skills, and no contact with his own people.
  3. The tribe is at stage where they are only just settling and farming rather than nomadic. (Like a lost tribe in the jungle rather than a medieval village.)
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    $\begingroup$ Welcome to the site Rhubis. $\endgroup$ – James Aug 9 '16 at 20:49
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    $\begingroup$ One question to ask is: in what way does the tribe benefit from adopting a currency? And: in what way do individuals benefit from the change? Additionally, who else benefits? Presumably the outsider stands to benefit, or they wouldn't even try; it is entirely possibly that the outsider and the tribe place very different value on certain things. This is a great basis for making a profit, but still doesn't give anyone a reason to switch to currency. $\endgroup$ – Seeds Aug 9 '16 at 22:17
  • $\begingroup$ As a related topic, do some research on Cargo Cults to find out what happens when somebody introduces a system like this then leaves... $\endgroup$ – Taegost Aug 10 '16 at 12:39
  • $\begingroup$ While not precisely applicable to your exact scenario, you might find it interesting to read "The Economic Organisation of a P.O.W Camp" by R. A. Radford, which you can find here. It details how in various POW camps in WWII cigarettes naturally developed into a traded currency. Of course, this is among people who are already familiar with money as a concept, so it's not the exact same as your question. Regardless I thought you might find it interesting. $\endgroup$ – MozerShmozer Jun 1 '17 at 18:50
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The shortest way to get people to use a currency is to create a bank.

Simply put, currency is a stand-in for other goods and services. It is an arbitrary but agreed-on standard that people can use to value different goods or services in an exchange. It does not indicate what has value or how much, simply provides a measure of that value.

So the simplest and quickest way to introduce it is to use it. The quickest way to do that is offer to hold those things that others value. "I will hold onto your sheep skins and in exchange give you a token that marks what of yours I have. Bring back the token and I'll give you your skins back."

The first such tokens would be specific to the goods being traded: essentially a 'receipt'. The only intellectual leap needed at this juncture is that the person who banked the sheep skins needs only trade that receipt to someone else, and that person can come get the skins instead.

From there, you want to generalize the receipt tokens to something that has the traits of a good currency:

  • Durable: it has to stick around in the same form a long time.
  • Divisible or Fungible: it needs to be fine-grained enough to represent most common values.
  • Convenient: a person needs to be able to easily possess and trade currency.
  • Consistent: one penny must be much like another penny.
  • Scarcity: if money grows on trees, then it becomes meaningless.
  • Acceptability: everyone has to agree on the meaning of the currency.

This is actually very hard to achieve, and for such a small tribe might be prohibitively expensive to set up. Consider that, for metal currency, you'd need access to rare metals in sufficient quantities and be able to forge them into similar shapes that everyone trusts you will accept in trade. You have to do this in a way no one else easily can (either because it's subtly difficult or because you physically interfere with others counterfeiting). You can build the trust (acceptance) over time, but finding a suitable form for your currency can be difficult, especially if you're starting with no assets.

Note that most currencies are 'fiat currencies' because to set one up, you need enough physical, military and/or legal force to be able to corner the market on currency production. If production lacks any powerful party regulating it, it is very easy to undermine the value of a currency. It's possible in your case the tribal leaders can provide this political power, but it would be very difficult for a lone person to do it without being very convincing and very lucky. (Consider the measures casinos take to control their betting chips.) Assuming they could find a currency form, though, setting up a bank (and eventually bank + market) would be the best way to go about it, simply because they are providing a service to the community: making trading easier.

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    $\begingroup$ Hmm... A bank as a storehouse who's tokens act as proof of ownership. If storing goods or trading required paying for the service then that is the start of taxes and revenue for the government. I think this is the answer I'm looking for as I believe I have a method of working through the difficulties. $\endgroup$ – Rhubis Aug 9 '16 at 22:46
  • $\begingroup$ You should consider an expanded view of scarcity. While the medium must be scarce, it can't be too scarce. Another consideration is utility. The medium must be fairly useless, or it will be used. If it is used it effectively ceases to be durable. See post WWII Germany, with cigarettes used as temporary currency. But they got smoked. $\endgroup$ – WhatRoughBeast Aug 10 '16 at 0:54
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    $\begingroup$ 'Scarce' does not mean 'very rare'. Durability covers the cigarette situation: while you can use non-durable goods as currency, you can do so only within a certain time horizon. 'Uselessness' is not as necessary an attribute as 'alternative uses are less useful than being used as currency'. $\endgroup$ – Nathaniel Ford Aug 10 '16 at 1:05
  • $\begingroup$ Another requirement for currency: it must be very difficult/nearely impossible to make for "commoners", i.e non-government/ruler parties. If anybody can make the currency in their backyard, the currency is completely meaningless. $\endgroup$ – DevilApple227 Aug 10 '16 at 12:43
  • $\begingroup$ a first form would be a seal on the receipt. The next step is to change the exact denomination (3 sheep skin) by the value in another common unit (300 whatevers). $\endgroup$ – njzk2 Aug 10 '16 at 15:18
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According to the book Debt: The First 5,000 Years, currency does not arise organically in a barter society because of a need for a common, divisible medium of exchange. (People keep track of debts in their head, because everyone is known and has a reputation.)

Instead, what happens is that a conqueror comes to town, conquers, and levies a tax, payable only in their scrip. Therefore, everyone needs to get hold of at least some of this scrip, to pay their periodic taxes, thereby giving that scrip value. After that, it becomes the de facto medium of exchange-- a currency, if you will.

So, the easiest way to introduce money into a barter society is to conquer that society and demand that taxes be paid in money that you issue.

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    $\begingroup$ This is a bit chicken-and-egg-y: If money systems don't arise organically, how does the conqueror have a currency in the first place? $\endgroup$ – Williham Totland Aug 10 '16 at 12:19
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    $\begingroup$ @WillihamTotland he doesn't need to have a currency in the first place. You simply introduce a system of taxation, most likely used to supply the troops garrisoned there. You make up some tokens, hand them out to your soldiers, and enforce a tax on the locals requiring them to hand over these tokens or die, and voila - your troops magically get all the goods and services they need, and locals have some currency. The locals are free to figure out how they'll arrange so that the tokens go from the baker who supplies the troops (and gets a lot of tokens) to everyone else who needs them for tax. $\endgroup$ – Peteris Aug 10 '16 at 12:35
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    $\begingroup$ The conquering group doesn't have to have a currency already; what if they come and invade, and then look around and see what the conquered people have that their local lands don't, which they want (e.g. spices, local animals), and require tribute of those goods. Those goods are probably not that rare, and therefore probably weren't being used in a utilitarian way by the conquered peoples, but now they become a measure of value to pay the tribute. Over time, if that becomes the "tribute currency", it also becomes a local currency as neighbors barter to acquire their tribute share. $\endgroup$ – MidnightLightning Aug 10 '16 at 13:53
  • $\begingroup$ @MidnightLightning It still seems to me as if the conquerors have a currency they impose it has to have come from somewhere; and if they don't; this is a currency arising organically out of barter. $\endgroup$ – Williham Totland Aug 10 '16 at 14:39
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    $\begingroup$ @WillihamTotland I wouldn't exactly call whatever the conquerors where doing "barter". $\endgroup$ – PyRulez Aug 10 '16 at 17:03
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Just like the first paper bills were promises to pay out a certain amount of gold, the first coins could be minted only in exchange for the promise of a certain amount of food or other resource, witnessed by some village head or elder.

Example: Farmer John needs a new hoe to till his land. Smith Paul is willing to make one for John in exchange for a share of John's harvest. John makes a coin out of... clay with a drawing of 3 sacks of grain. Paul and John then proceed to village elder Dave and repeat their agreement in front of him. To validate the coin, Dave bites lightly into it, leaving his distinctive teeth marks on the coin.

The coin can now circulate among the locals until harvest time comes around and John trades 3 sacks of grain for his coin back, which he then can destroy (it's worth nothing to himself). Later on, the coins probably wouldn't be destroyed but kept for reuse.

This way, coins only get made in roughly equal measure to resources being produced, and could even be destroyed when a holder claims the promised resource.

Note: Of course this will only work if the society already has a concept of private ownership. If all the food and such are shared by the community, this will be a VERY hard sell.

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  • $\begingroup$ IIRC the first historical money records amount to exactly this - tokens of grain handed over to Babylonian central granaries (issued/recorded by the same granaries/temples), redeemable for grain, and used to handle commerce for other goods as well. $\endgroup$ – Peteris Aug 10 '16 at 12:39
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The biggest reason for introducing money into a barter system is that not all is equal. If I have a live cow I want to trade for your two beans, we're kinda at an impasse unless we start dividing the cow or those beans are very magical.

A fiat currency (IE, this money is this value and accept that) is not easy to introduce right away...you need money to relate to something solid. So you will need something that this money represents. In our history, 'paper money' originated as this paper bill represents a portion of a brick of gold kept at this bank.

With that in mind, your easiest way to introduce a currency is to have something physical that the currency represents. Holding to the cow example above, you could create tokens where each token represents a 'steak' from said cow or equivalent piece and the bearer of said token would receive that when the cow is slaughtered. Until the cow is slaughtered, these tokens may be freely exchanged as if money. I've used cow for this example here, although it's a hard thing to use as it's a living thing that will eventually die making the token worthless unless there is a new cow to take it's place...if there was a limited resource within this tribe that this token could represent, then you have the basis of what your currency is based on and represents.

So the question becomes...whats a scarce resource for these people that doesn't die or change over time? Hard to tell from your question what these people may value.

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  • $\begingroup$ I'd considered using grain for this, set up a system where an amount of grain is equal to a coin. The issue I had with this is as you said, unlike a gold standard the grain can go bad. The other issue is that you are handing over the tokens to farmers or whoever owns the resource giving them all the money in the economy and you either have to trade the useless tokens for the resource or let them have both. $\endgroup$ – Rhubis Aug 9 '16 at 20:56
  • $\begingroup$ When you are talking farmers at this time, they normally didn't retain the wealth for themselves, they were serfs and their harvest belonged to their lord not them...in a way they were simply paid (a very tiny amount) to farm the land. In that sense...it kinda works as the lord becomes the grain keeper who gives certain amounts to his serfs (lord has a replenishing stock of grain). Look-up the Japanese fuedal system and 'koku', which was a wealth unit centered on the amount of rice one man would eat in a year. $\endgroup$ – Twelfth Aug 9 '16 at 21:02
  • $\begingroup$ I'm familiar with koku but the problem is mainly in the introduction aspect. People who don't have a concept of money would first need convincing that the tokens are worth something (easy) and a way of handing them out without making some people suddenly rich or everyone suddenly unfairly equal. $\endgroup$ – Rhubis Aug 9 '16 at 21:07
  • $\begingroup$ what political system are your people holding? A single source of power that 'owns' all (feudal/despot) would be doing the introducing....seems easiest anyway. $\endgroup$ – Twelfth Aug 9 '16 at 21:11
  • $\begingroup$ I'm was considering a tribe with an appointed chief but I run into issues with any kind of government. Even if they were a tyrant the introduction would seriously screw up the tribes dynamics. The tyrant would either be swapping the valued resource for worthless tokens, meaning that only the people with that resource would gain the money then be left trying to trade with people with no money. Or the government would have all the money themselves and be suddenly rich for no reason. $\endgroup$ – Rhubis Aug 9 '16 at 21:19
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In the beginning there was barter, and then there were cows. The system of barter to agricultural/livestock barter, and the value of a thing was counted in say, goats or cows, even if no actual goats or cows were traded. So a person for example, would say that a service or good was worth a chicken, cow or goat.

Later this became, also skins, as people just don't carry around goats or sheep as much as they should.

What causes currency to develop is an item or something that occurs naturally, is easy to carry, but is not so common that it is worthless. Like cowrie shells from the above PBS example, or something else. It would need to be something that doesn't go bad (so not grain) and would be seen as valued enough within the community.

Dead Cows is how I'd do it. The other thing that causes it to develop is the lack of a hard good AT THE TIME. If people think in terms of cows, and there's sickness which wipes out all the cows, having a representative "stand-in" in the form of currency will help the economy, as long as everyone agrees.

This is not that many people. They can just agree that tokens hold a certain value (each token is valued at say, 1/12 of a cow or something) and as long as that object is not too easy but not impossible to come by, then it's fine.

That the person introducing this has

no tradeable goods or skills, and no contact with his own people.

is going to be awkward. And it sounds as though they are an outsider, and they may not even know the language, which further ups the social difficulty of this. Therefore, they would have to convince someone with social capital and standing in the community of the idea.

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We can read from historical accounts that silver and gold—which had value in their own right—were used as a medium of exchange even before standard units of currency were developed. Instead of counting out coins, the quantity of money was calculated by weighing the metal in question.

At some point somebody in a civilized region with a formal government hit on the idea of standard weights of metal, at which point money as we now know it was born.

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Honestly, the best way to introduce money, the idea of money, into a barter economy is not with logical reasons and coaxing but with stories.

There's a children's story, or maybeso a set of stories, where the main character wants to trade for something, and has to go on a long quest to get from someone who wants the thing he has, to one who can give him the thing he wants, because of all the people between who are picky about what they want for what they have. Stories like this might catch on pretty well in a barter economy, they are familiar with the web of local favors and debts - but it will also subtly lay the groundwork that the chain of bartering is difficult and inefficient.

Then, your character may have stories or tales or anecdotes (either their own set of stories, or anecdotes about their native land) about the use of money, to circumvent this. Instead of needing to visit fifteen or twenty people to make a trade chain to get what someone needs, wouldn't it be easier to have tokens that will let you give what you have for them, and get what you need for them? The idea of using tokens to keep track of debts might or might not make immediate headway, depending on the size of the population and how good the system they already have is, but the idea will be out there for people to consider.

As a bonus, you say the tribe is at a stage where they're settling from nomadic to farming. That means their ways are changing, they're figuring out different ways of doing things that work, and letting go of ways that don't. Their population will be growing, and they might start running up against the kinds of problems that make money easier than barter, like flexibility or not having to keep track of too many people or debts. They are already changing, your person just needs to make sure the idea is out there and let them figure out if they think it will work better than what they have.

If the idea is there, even in stories, it will be on the radar and available for when the society starts looking for solutions to the problems a barter economy might have in a community becoming larger, more specialized, and less flexible. Especially if the person from the money-culture uses the stories to frame the idea as something that helps solve those problems.

This way, the society may be convinced to try and work out a system that will work for them, based on their own thinking and ways of dealing - inspired by a story, but their interpretation of it, instead of trying to impose or coax the society to adopting an system very much outside their culture. Maybe they won't adopt your person's culture's use of money directly, but with the idea that it can be done differently than plain barter in their minds, they can think about, and talk about, how to make their own system. Maybe instead of centrally backed money (like a bank's) they will pick a common trade good for "pricing" (gold, salt, cocoa beans), or they will start with individual tokens for debts and go from there. It will eventually evolve to suit their culture and needs, but the way it does so will be organic, and therefore a lot more likely to be successfully adopted.

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