The Human Action Podcast

Menger's Barter Theory of the Origin of Money Is Still Standing

11 snips
Sep 30, 2025
Georgy Ganev, a monetary economist and author, joins Bob to delve into the origins of money, arguing that the barter theory remains relevant against critiques by David Graeber. They discuss how anthropological evidence supports this theory and outline Mises' regression theorem as a solid explanation for money's value. Ganev critiques claims against barter, suggesting that even rare examples, like Radford's POW camp cigarettes, demonstrate the transition to money. The conversation emphasizes that once surplus trade starts, money quickly emerges.
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INSIGHT

Regression Theorem Explains Money's Value

  • The Mises regression theorem remains the only coherent explanation for why money has value.
  • Therefore any historical account must allow for some marketable good existing before it became money.
INSIGHT

Money Can Emerge Spontaneously

  • Menger's explanation shows money can emerge spontaneously from ordinary exchange without central design.
  • Markets, surplus production, and the most saleable good naturally lead to a commonly accepted medium.
INSIGHT

Selective Ethnography Doesn't Disprove Barter

  • Many anti-barter claims rest on selective or narrow ethnographic cases, not broad evidence.
  • Caroline Humphrey's Himalayan case shows demonetization, not a universal absence of barter origins.
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