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Debt and the nature of money

When I wrote that David Graeber’s book opens your eyes, that was not just a figure of speech. First, consider this:

In recent weeks, Theodoros Mavridis has bought fresh eggs, tsipourou (the local brandy: beware), fruit, olives, olive oil, jam, and soap. He has also had some legal advice, and enjoyed the services of an accountant to help fill in his tax return. None of it has cost him a euro, because he had previously done a spot of electrical work – repairing a TV, sorting out a dodgy light – for some of the 800-odd members of a fast-growing exchange network in the port town of Volos, midway between Athens and Thessaloniki.
In return for his expert labour, Mavridis received a number of Local Alternative Units (known as tems in Greek) in his online network account. In return for the eggs, olive oil, tax advice and the rest, he transferred tems into other people’s accounts.

Fascinating, but also completely understandable according to a token theory of money. Whether you call it euro, drahma, or tems doesn’t really matter. It is just a unit of exchange. For the community within which it functions, it doesn’t need the backing of the state (or a central bank) or a gold standard. Of course, the limitation is that the system can only function within a relatively small community:

“It’s also a way of showing practical solidarity – of building relationships.”

This quote directly links to Graeber’s argument about the intimate association between debt and community: the tems are nothing less than a system of keeping track of (small) debts within a circle of trust.

What is also characteristic is the Guardian’s subtitle of the mateiral: A determination to ‘move beyond anger to creativity’ is driving a strong barter economy in some places [emphasis mine]. Having read Graeber, one immediately recognizes that the ingenious Greek system of tems is the exact opposite of barter – people are not exchanging goods directly (barter) but through the medium of small debts, and the tems which keep track on the debts. The myth of the barter origin of money shows its ugly head even when one observes in vivo the origin of money as a system to count and manage debts.

And now, the second case. Normally, at the local cafeteria at my university in the Netherlands you can pay either in cash or using the cashless Chipknip system (it’s like paying with a debit card but no pin required). The latter option is much more popular since in this country one can pay almost everywhere with the Chipknip or PIN (both on the same card). A few weeks ago, the Chipknip terminal at the cafeteria broke down and one was required to search his pockets for small change to get his daily caffeine fix. During these weeks, on more than one occasion I actually didn’t have enough coins to get a coffee. Apparently, I wasn’t the only one. Once the Chipknip machine was repaired, there was a note from the cafeteria requesting all people to clear the debts they had accumulated over the period the machine was out of order. So the cashless economy didn’t revert to cash transactions (coins) but miraculously, and instantaneously, transformed itself into a system of debt! 

Geometric Currency Sculptures by Kristi Malakoff

[artwork via Colossal]

Published ineconomic policy

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