Restoration of meanings. What is money? part 2

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

Start

In the previous part, I already said that modern money has no practical value and can only be used as a means of accounting. To obtain any practical value, money in any of the modern forms, including in the form of gold coins, must first be exchanged for a real product or service. But it turns out that this was not always the case, since earlier the word "gold" was not called metal at all, but grain, and there are many confirmations of this, both in the Russian language and in historical events.

Remember Alexander Sergeevich Pushkin's line in the poem "Ruslan and Lyudmila": "There is Tsar Kashchei over gold wasting away "? So gold = gold = cereals. Cereals are those that produce gold, that is, gold. And the metal began to be called gold because it has a color very similar to the color of ripe grain. The same is true in English. One of Sting's very popular songs is called "Fields of Gold"-" Golden Fields ", where this phraseological unit means fields of ripe barley.

Now let's analyze whether it will be convenient to use grain as money in exchange?

First, unlike modern money, grain has a practical value. It can be eaten by itself or used for livestock feed.

Secondly, it is very easy to separate the grain into parts, even down to very small volumes.

Thirdly, there is a steady demand for grain, as well as for any constantly consumed food product. Especially when you have settlements or cities where there are artisans or employees who do not have the opportunity to run their own subsistence economy in order to provide the cultivation of the necessary foodstuffs themselves.

Fourthly, the grain is stored well enough, which makes it possible to store it. Moreover, from a strategic point of view, it is simply necessary to make such stocks; thus, such strategic stocks can serve as collateral for other forms of money. At the same time, unlike the same gold, such grain reserves are of very high practical value, especially in the event of a crop failure or natural disaster.

Apparently this is where the expression “give in growth” comes from when they talk about providing loans at interest. The fact is that before, when someone needed grain for seeds, it was "given in growth" on the basis of the principle: take one bag, return two. With a yield of that time of 5-6 grains from one planted grain, such a fee was, although high, but was perceived as quite fair, since in the case of a yield of 5 grains, it was necessary to return a fourth part of the increase or 25% to the owner of the seed (They took 1 part of the grain, we have grown 5 parts of grain, we return 1 part as a net debt, therefore the increase was 4 parts, of which we return 1 more part of grain or 25% for the use of seeds).

An indication that earlier grain was used as money in the Babylonian kingdom is found in the laws of the Babylonian king Hamurapi. In many articles, it is grain or silver that is mentioned as a means of payment, while gold is practically never mentioned as a means of payment. In all articles where gold is mentioned (in this case, it is metal), it denotes some value, property, and not a means of exchange or payment. But grain together with silver as a means of payment are constantly mentioned.

(§ 55) If a person opened his irrigation ditch, but was negligent, and the water flooded the field of his neighbors, then he must measure the grain in accordance with the harvest of his neighbors.

(§ 56) If a person opened the water, and the water flooded the work done in the field of his neighbor, then he must measure 10 g of grain for each drill of the area.

(§ 57) If the shepherd did not seek the consent of the owner of the field for feeding the grass to the sheep, but fed the field to the sheep without the permission of the owner of the field, then the owner of the field can squeeze his field, and the shepherd, who fed the field to the sheep without the permission of the owner of the field, in addition must give to the owner of the field 20 gur of grain for each drill of the area.

In this case, the penalty for the offense is levied in grain.

(§ 71) If he is a man gives grain, silver or other good for the house of obligation belonging to the house of his neighbor, which he bought, then everything that he gave, he loses, and he must return the house to its owner. If this is not a house of duty, then he can buy it: for this house he can give grain, silver or other good.

(§ 88) If a tamkar gave grain as an interest debt, then he can take for one gur 1/5 of the grain as interest, if he gave silver as an interest debt, then for one shekel of silver he can take 1 / b shekel and 5 shekel as interest.

(§ 89) If a person who borrowed at interest does not have silver to repay the debt, but only has grain, then, following the royal rule, tamkar must take as interest 100 ka per 1 gur with one grain.

(§ 94) If Tamkar lent grain or silver at interest, and when he lent, he gave silver in a small weight and grain in a small measure, and when he received the debt back, he took silver in a large weight and grain in a large measure, then this tamkar loses everything he has lent.

It clearly follows from these articles that only grain or silver is used as a legal tender in Babylon, since only they have fixed rates on loans and other conditions for the provision and repayment of loans are stipulated.

In some sources I have come across a mention that in Babylon silver money was backed by grain, that is, at any time, silver money could be exchanged at the established rate for grain in state depositories. But so far, unfortunately, it has not been possible to confirm this information due to the lack of links to sources. But given the fact that taxes in Babylon were collected either with the same silver or in kind, including grain, this is quite likely.

The use of grain as money, that is, the universal equivalent of exchange, or money that is provided precisely by grain, turns out to be very effective for any territories where a fairly large part of the population is engaged in agriculture and produces grain itself. But such a system actually excludes the monopoly of the elite on the emission of money in the sense that it is happening now. At the same time, it clearly follows from the code of laws of Hamurapi that the ruling elite of Babylon did not set itself the goal of obtaining a monopoly on the emission of money. Therefore, grain is one of the legal means of payment in Babylon along with silver. This fact, as well as the fact that Babylon was one of the greatest states of the past, proves that such a system is very viable and effective.

Grain was also used as a means of payment in many other places, including Europe and Russian territory. There are references to the fact that peasants paid with grain for various services, including grinding grain for flour, with blacksmiths and other artisans. But the payment of taxes was mainly carried out in metal money, with the exception of some periods when the payment was taken in grain. But this happened mainly during the wars. And far from always it was precisely the collection of grain as a tax. The same "surplus appropriation system", first introduced by the tsarist government on December 2, 1916, was not a tax, but the obligatory sale of grain at a price set by the state, although at the initial stage this extended only to a portion of the grain. The rest was sold at market prices. But due to the low supply of grain for surplus appropriation and state procurement, on March 25 (April 7), 1917, the provisional government introduced a "grain monopoly", which provided for the transfer to the state of the entire volume of grain produced minus the established norms of personal consumption.

That is, the surplus allocation was not invented and initially introduced by the Bolsheviks. Nevertheless, after the Bolsheviks came to power, the "grain monopoly" was confirmed by the decree of the Council of People's Commissars of May 9, 1918, and on May 13, 1918, the so-called "food dictatorship" was introduced, which extended this principle to many other products. This policy lasted until March 21, 1921, when, in connection with the transition to NEP, the surplus surplus was replaced by a tax in kind.

Formally, food collection during the surplus appropriation took place at prices set by the state, but since the paper money used to pay for both the Provisional Government and the Bolsheviks had a very low purchasing power, food was actually taken from the peasants for free. Weak power, or even a temporary absence of any legal power at all, led to the fact that paper money generally lost any confidence in the population. A similar situation with the loss of purchasing power and hyperinflation of local paper money is observed not only in Russia at the beginning of the 20th century during the revolution and civil war, but practically everywhere, where, for one reason or another, there is a loss of trust in power, or the legitimate power itself disappears.

I want to once again draw the attention of readers to the fact that in critical situations, money circulation is replaced by natural exchange, since the main thing is real resources, goods or services, and not money at all. The return to monetary circulation occurs only after the return of trust in the authorities.

If we consider the history of the appearance of metallic money, then there are also many blank spots and questions. Of all the versions that I have come across while studying this topic, the most plausible, in my opinion, is the version that initially metallic money was used as a means of accounting for the payment of taxes, and only then they began to be used for other functions that money performs today, including a universal medium of exchange for trading.

In general terms, this system worked as follows. The collection of taxes from subjects took place once a year, usually in the fall, after the harvest. The tax to the treasury of the local feudal lord (overseeing the territory) could be paid either in kind or in metal coins that were previously received from the same feudal lord for the fact that some goods had already been transferred to him, or one or another service was provided in between between collection of taxes. That is, in this system, it is a specific material resource that is primary, and not money as such. Therefore, the "treasury" is precisely those real resources and goods that can be disposed of by this or that feudal lord - the holder of the "treasury". And the coins themselves are provided with the right of the feudal lord to collect tribute from the territory under his control, since when it comes time to pay the tribute to the feudal lord, the subject can pay either with real resources or with coins obtained earlier. Since only the feudal lord issues coins into circulation, then if the coin is in someone's hands, it means that for this coin the feudal lord has already received some service or resource against the future payment of tribute. That is, when the circulation of coins between the rest of the inhabitants of a given territory begins, they, in fact, exchange among themselves the right not to pay tribute to the feudal lord with real resources or services, but instead return the coins received earlier from him.

In this case, it becomes clear why so many different coins were minted in medieval Europe, which have limited circulation in a relatively small area. Each feudal lord issues his own money, since it means the payment of tribute to the treasury of this particular feudal lord. In a territory controlled by another feudal lord, other people's money immediately loses its value. And the very right to mint one's own coin actually means the right to collect tribute from a certain territory controlled by this feudal lord.

In this system, another principle becomes clear, which was once formulated in school history textbooks as "the vassal of my vassal is not my vassal." But in reality, this expression is not about who can give orders to whom, but about who can collect taxes from whom. In other words, this principle reflects the prohibition of double taxation of the population. A multi-level feudal hierarchical pyramid of subordination is being built, in which each level collects tribute from a lower level and pays a corresponding share to a higher level from the collected tribute.

The system of monetary circulation is being built accordingly. Coins that are minted by a higher level of the feudal hierarchy do not circulate at the lower levels, but serve for settlements only at the level of the elite. Neither in Europe nor in Russia, gold coins practically do not circulate among the population, since their value is too high to be used for everyday settlements.

The transition to the use of a single currency and the small feudal lords of the lower level are locked up to mint their own coins also does not occur immediately, but as it becomes obvious to the ruling elite that the use of many different coins, where each of the coins circulates only in a small area, complicates the system and restrains the development of the economy.

By the way, it is very likely that this principle, when the right to issue your own money means the right to collect tribute from some controlled territory, has survived to this day, only the ruling clans have become larger, as have the territories controlled by them. But in general, the right to issue a domestic currency means the right to collect tribute from a certain territory in which this currency is circulating. The same is with the hierarchy of currencies. At the top level is the dollar, due to which the hidden collection of tribute from other states in favor of the owners of the dollar is carried out, but we will consider this mechanism in more detail in the next part.

Continuation