Wednesday, December 7, 2016

Bartering without ledgers, how can that happen?

The debate about the natural origination of money usually start with the bartering arrangement. Not always, some theories start with dictatorships. Look at tyhe development of money from bartering here.

Bartering without a ledger is very difficult,  nearly impossible to take an arbitrary inventory and march to the market place, especially since these would be seasonal markets. I suspect most agrarian businesses kept a simple ledger, what product was going to what party in  exchange for past or future exchange. Neighbors would certainly have known about upcoming new horses, sheep, bumper crops, and the rest.  They would have put in their 'reservation', gotten their name on the ledger, for delivery in the spring.

And the ledger entry would be then origination of money, under this theory. An interesting speculation, and it comes to ind obviously because of distributed ledger.  It would have been important that each member of the bartering community agreed on actually seeing each others, honest, ledger.  Otherwise, they could not price risk, what if the farmer promised more than a single rain could produce? Then governments would want a peek.

Churches would have started the ledger idea, counting the overall flock, and that master ledger subdivides by farm and shop. The church, naturally, wants a tithing, but a tithing is entry into the church and food on a cold blizzard night.

Ledgers are like short block chain

In real time, poerson X wants the new horse, but it is promised to person Y, its in the ledger.  Person X and Y van swap the ledger position.  Cross out tyhe current entry,and add a new entry.  Do this under witness, or have the local friar verify both parties.  By changing entries, implicit price is set, and side arrangements handle 'bit error'./ But he exchange may ripple through a second layer of ledgers, at the level of the trading parties.  Hence risk becomes priced over the agrarian season, then in spring it is mostly surplus that goes to the barter market.

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