Curated Tumblr

Governments accepted crops. Long after the invention of currency, governments still took their cut in wheat. What kind of money is a peasant going to have? All the king’s horses eat grain. This obsession with tax is a weirdly libertarian lens on a history that’s mostly anthropology.

States are the reason everyone uses currency. States are fundamentally an army that wields its power to pay itself, and currency is a huge force multiplier for projecting power (and therefore paying itself).

The problem with crops is that they're hard to transport, so if you and your army try to go conquer some other land, and if the army still insists on being paid upfront (it does), then you have to haul the food, using people/animals that eat some of the food they're hauling. Now you're facing sharp logistical limitations analogous to the 'tyranny of the rocket' equation, where carrying food requires more food to feed the mules, and carrying that extra mule food requires more mules which requires more mule food.

Currency solves that whole issue. The state forces the farmers to pay tax via currency, and so the farmers need to sell their crops for currency that they can pay tax with, and so now the soldiers can buy food from the farmers with the currency the state pays them. Carrying currency along with the army during a march is a relatively simple problem.

And sure, farmers could trade with currency even if the state didn't exist, but ultimately farmers don't actually want to trade with others - they want to be self-sufficient (within their local community), and what few trades they do actually require (e.g. buying salt, if they live inland), can still be done with crops. And do note that salt is incredibly value-dense.

Also, currency is mostly useless for farmers - what they'd mostly want to buy is food, during a famine. But if there's a famine, everyone is hoarding food instead of selling it. So the currency is useless to buy food. Which means other farmers would be even less willing to sell the food they're hoarding. It's like the opposite of "don't look down".