Chapter 16: Money Created Civilization

If my interpretation is correct, money is far older than believed. And money may be what made civilization possible.

The Standard Narrative

The standard story goes:

1. Agriculture creates surplus
2. Surplus enables settlement
3. Settlement enables specialization
4. Specialization creates civilization
5. Money appears as civilization matures

Money is a consequence, not a cause.

The Revised Narrative

My interpretation suggests:

1. Agriculture creates surplus
2. Money is invented to exchange surplus
3. Money enables specialization beyond barter limits
4. Specialization accelerates development
5. Development creates civilization

Money is the cause.

The Mechanism

Money enables specialization by solving the double coincidence of wants.

A potter who makes only pottery must find someone who wants pots AND has what the potter needs. Barter requires coinciding needs.

Money eliminates this requirement. The potter sells to anyone wanting pots. The potter buys from anyone selling food.

With money, people can specialize dramatically. Full-time potters develop better techniques. Full-time builders construct better structures. Everyone produces more.

The Evidence

Clay tokens appear at the very beginning of the agricultural revolution. Before pottery. Before permanent architecture. Before granaries.

"Tokens are among the earliest, if not the first, clay artifacts in the Near East."

This timing suggests money enabled the development that followed.