The Origin of Money: Enhancing the Chartalist Perspective by

The goal of this paper is to enhance the Chartalist approach to the origin of money, by embedding it in the concrete historical and socioeconomic circumstances of ancient societies, such as Ancient Mesopotamia ca. 4000 B.C. to 2500 B.C. It will be argued, that given the absence of bureaucratic tools such as writing, census systems and formal means of personal identification to detect those with payment obligations 1 , money emerged as a practical solution to the problem of achieving the maximum possible fulfillment of the citizens " payment obligations to the State (or, what amounts to the same thing, reducing their avoidance), where these obligations (and, i.e. debt relationship of the citizens to the State) were already in place before monetization was introduced. Chartalism views the origin of money in relation to several practical solutions. One of them is the work effort inducement problem for the economy as a whole, where direct, once-and-for-all monetization of the economy is a means of coercing (though indirectly and without recourse to overt force) the local population into supplying labor services and goods to the public authority. In this account, the introduction of money places the local population into a previously non-existent debt relationship to the public authority. It will be argued in this paper that local populations of ancient societies, such as the Mesopotamian, were already forced to supply labor services as well as goods to the higher authorities without the mechanism of money (i.e. the debt relationship existed prior to the introduction of money), so that the Chartalist explanation of the emergence of money does not adequately grasp the ends of monetization, when applied to ancient Mesopotamian societies. Thus, it will be argued that the Chartalist account can be strengthened by recognizing that money was an instrument of control over the fulfillment of payment obligations that were already in effect, rather than a mechanism of forcing the population into these obligations in the first place, which is what Chartalists often argue. Whereas one of the end results coincides with that of Chartalism, i.e. all the local population is forced to contribute labor services or goods to the public authority, the means-ends relationship, and hence the evolution of money, 1 Those with payment obligations will also be referred to as " taxation units " , whereby we mean citizens, households, production units, etc. 3 differ. In establishing our mechanism of monetization, we …