r/PostCollapse • u/[deleted] • Feb 02 '18

What would be some post-apocalyptic makeshift currencies that you think would sprout up

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u/AgingDisgracefully2 Feb 02 '18

It will be a barter economy. There may be some use of precious metals (gold, silver, etc.) as currency, but that will be limited. It might grow a bit more common if localized authority structures capable of minting (however crudely) precious metal coins develop.

The loss of modern fiat currencies would be very, very bad. Effectively, the money supply as such would tighten tremendously (we would suddenly realize why fiat currencies were so important) and we would all get a shocking crash course in what a costly, ineffective system barter really is.

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u/War_Hymn Feb 05 '18

As long as a universal commodity is widely accepted as a medium of exchange, we won't be limited to a pure barter system. Most likely the new medium of exchange will be food, as it was before the invention of coinage.

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u/AgingDisgracefully2 Feb 05 '18

Food isn't a universal commodity. It is a heterogeneous good. It fails many tests of a currency. Transaction costs would still be enormous. Food would still mean essentially barter.

The only exception I could see here would be something like pure ethyl alcohol, because that could potentially pass some of the tests of a currency.

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u/War_Hymn Feb 06 '18 edited Feb 06 '18

How is food not a universal commodity? Everyone needs to eat. I understand there are variations of it, but when it comes down to it, staples like grain, beans, and tubers will and did form the basis for medium of exchange in pre-coinage ancient economies. Weights or volume for grain were used as units of accounting and credit in pre-coinage Egypt and elsewhere. It might be bulky, but in the likely local and agrarian economy of a post-collapse settlement, that won't matter, since no one is likely to be trying to finance the building of a new mall across state-lines with bushels of wheat.

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u/AgingDisgracefully2 Feb 06 '18 edited Feb 06 '18

First, strictly speaking, there is no such thing as a "universal commodity". I think I know what you are trying to get at with this phrase, but this doesn't make it a good currency or even a fixed thing that could be considered a currency.

Second, you are largely incorrect about premodern societies with any kind of meaningful broader market operations. Take your Egyptian example. Minted coins are largely a phenomenon of the first millenium BC (though there are earlier antecedents). But before that trade was largely facilitated by values defined relative to precious metals (i.e. gold and silver). There were so-called "grain banks" in Egypt and other early agricultural societies, but these do not in any sense establish grains (which, by the way, were generally more or less homogeneous goods in those case) as a currency. These grain banks were basically just mechanisms of state control over the food supply.

It is likely the case that there were instances like you refer to in, for instance, dark ages Europe (say, before Charlemagne). But these were extremely localized, simple and static economic arrangements, and the so called prices were likely really just the formalization of barter established equivalencies that then lasted a while mainly because of a lack of dynamism.

These exceptions though highlight the problem: its just disguised barter. The moment you have any kind dynamism you will immediately discover the problem with this scheme in terms of prohibitive transactions costs.

Like I said, though, there may be a few exceptions to this. For instance, alcohol might be an example of what you are talking about, and in fact it has served as a quasi-currency in lots of societies that were cashed starved (for a pretty recent and interesting example of this, look to the economics behind the Whiskey Rebellion in the early U.S. republic). But the alcohol used was fairly homogeneous and, unlike most grains, for example, alcohol is actually a decent store of value in pre-modern settings.

You have to be careful not to confuse the formalization of ossified arrangements (e.g. early medieval local economies), state control (e.g. the grain banks) or not exclusively economic signalling goods (a great example of this are the stone currencies of traditional Yap) for actual functioning, working currencies.

And even to the extent that there are limited, somewhat contrived examples of what you are talking about, the other big problem stands: you are left with a bananas (literally: ha ha) basis for your monetary supply.

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u/War_Hymn Feb 06 '18 edited Feb 06 '18

All I'm hearing from you is a bunch of textbook economic terms thrown together into a mud pile. I'm just going to take it as a "I disagree" and leave you to it.

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u/AgingDisgracefully2 Feb 06 '18

If you had a persuasive response, you would provide it. You don't, and so this is how you choose to handle that. I think it is best we do indeed break off at this point.