https://x.com/JAN3com/status/2051736766457987127  

Money didn't emerge from barter markets. It emerged from death, conflict, and marriage, centuries before markets existed. @NickSzabo4 's latest essay "The Fabric of Desires" traces Bitcoin's deepest roots. Read the full piece on the JAN3 Blog. https://jan3.com/es/blog/the-fabric-of-desires

JAN3’s recent post on Nick Szabo’s essay, The Fabric of Desires, points to a very valuable idea: the goods that preceded money did not arise solely from barter markets, but also from deeper social needs, such as compensation for damages, marriage arrangements, tribute, inheritance, prestige, and the resolution of conflicts.

This observation appears to challenge the standard account of the origin of money: first barter, then money. Szabo reminds us that, long before developed markets existed, certain scarce, durable, recognizable, and hard-to-counterfeit objects already fulfilled functions related to the transfer of value. In that sense, his analysis greatly enriches our understanding of the anthropological roots of money.

That said, it is important to make a conceptual distinction so as not to attribute to Menger a weaker thesis than the one he actually held. Menger does not start from a broad idea of money as any valuable object used to transfer wealth, confer prestige, or settle social obligations. His explanation focuses on money defined and understood as a general intermediary in exchange, or, in today’s terms, as a generally accepted medium of exchange.

From that stricter definition, Menger seeks to explain how certain goods, because they are more liquid or more easily saleable than others, gradually come to be demanded not only for their direct use, but also because they facilitate indirect exchange. That is a different question from the one Szabo raises when he studies “collectibles” as social precursors of money.

For this reason, instead of viewing Szabo’s argument as a direct refutation of Menger, it is better to see it as broadening the historical framework. Szabo sheds light on an earlier phase: the emergence of valuable, scarce, and transferable goods in contexts that were not necessarily commercial or market-based. Menger, for his part, explains a later phase: how certain goods with prior value can become generally accepted media of exchange within increasingly complex markets.

When one starts from different definitions, one can arrive at different conclusions; for that reason, it is important not to conflate the levels of analysis. Both perspectives can be compatible if we keep the definitions clear:

·         Szabo explains the origin of many proto-monetary goods.

·         Menger explains the origin of money as a general intermediary in exchange.

Applied to Bitcoin, this distinction is also helpful. Bitcoin can first be understood as a scarce, verifiable, and counterfeit-resistant digital good, with initial value for a specific community. In that sense, it resembles Szabo’s collectibles. But its possible evolution into money in the full sense also requires the process described by Menger: that a growing number of people demand it because of its saleability and because they expect it to be accepted in future exchanges.

Szabo’s essay once again reminds us of the anthropological roots of proto-money, which precede developed markets and money as a general intermediary in exchange. But this should not be set against Menger’s idea, which answers a more specific question: that of money properly understood. Szabo does not replace Menger; he complements him by showing that, before money existed as a generally accepted medium of exchange, there were goods that fulfilled partial monetary functions in human social life.

At least, that is my understanding of it.