Barter Exchange Before Money and Numeracy: How All Exchanges Were a Direct Exchange of Human Empathy.

Introduction

The history of economic exchange extends far beyond the modern monetary systems we use today. Long before the advent of currency, and long before the development of widespread numeracy, human beings engaged in barter systems direct exchanges of goods and services that were fundamentally built on trust, mutual understanding, and what can be called human empathy. In a world without standardised measures of value, empathy became the currency of exchange.

This post explores the dynamics of early human trade, focusing on the role empathy played in facilitating exchange in the absence of money and widespread numeracy, and traces how this dynamic persisted until the 20th century when parity between the use of money and numeracy was finally achieved.

Barter Systems: A Historical Overview

The practice of barter dates back to early human societies, long before the first forms of money were minted around 600 BCE in the Kingdom of Lydia (modern-day Turkey). In pre-monetary societies, trade involved the direct exchange of goods and services without a common currency. The Mesopotamians and Egyptians, for example, were known to trade commodities such as grain, livestock, and tools, often using measures of weight or volume to assess value. This was a highly personal form of exchange, one that required trust between parties. Without the abstraction that money provides, the process was not only practical but also relational.

In the absence of numeracy, which would not become widespread until much later in human history, individuals relied on their ability to empathise with one another to ensure that the exchange was fair. Mutual trust was essential. The lack of any standard measure of value meant that each exchange had to be negotiated, with each party trying to understand the needs and desires of the other. This was empathy in action, where human relationships were the bedrock of the economic system.

Empathy as Currency: The Barter System

Barter systems relied on direct person-to-person negotiation. In these exchanges, empathy was paramount. For example, if one person needed grain and another needed tools, both parties would need to understand the other's needs to agree on what constituted a fair exchange. Without any formalised value system, individuals had to place themselves in the position of their trading partner to understand what they valued most. This practice was not only a form of economic exchange but also a social bond, strengthening the community as a whole.

Anthropologists have noted that in small, tightly-knit communities, where barter was common, empathy was more than just a helpful quality it was a necessity for survival. Trust was built not through the exchange of money or contracts but through personal relationships. If empathy was lacking, the community itself could fail, as distrust could lead to conflict or breakdowns in essential exchanges.

The Emergence of Money and Its Impact on Empathy

The introduction of money, beginning in Lydia around 600 BCE, began to shift the nature of human exchanges. Money acted as a standardized measure of value, abstracting the process of exchange and reducing the need for empathy in each transaction. With money, one no longer needed to deeply understand the needs of the other party to strike a deal. The impersonal nature of currency allowed for larger, more anonymous transactions, reducing the relational and empathetic elements of trade.

However, for centuries after the introduction of money, barter systems persisted, especially in rural areas or among those who did not have access to coined currency. Empathy remained an essential part of local and small-scale trade. In places like medieval Europe, where the economy was still largely agrarian, barter was often used in villages and towns, with personal relationships and trust continuing to drive economic exchanges.

Numeracy and the Role of Education in Economic Exchange

Numeracy, the ability to use numbers effectively in trade and daily life, was slow to spread across the population. While ancient civilizations like the Babylonians and Egyptians developed sophisticated mathematical systems, these skills were typically restricted to elite classes such as priests, scribes, and merchants. The common person, engaging in local barter, had little need for complex arithmetic.

It was not until the 19th and early 20th centuries that widespread numeracy began to reach the general population, thanks to the rise of public education systems in Europe and North America. This shift coincided with the Industrial Revolution, which introduced formalised labour markets and the growing importance of wages and prices. The growing numeracy among the population allowed for more complex economic transactions, diminishing the need for personal empathy in favour of standardised systems of value and exchange.

The Parity Between Money and Numeracy (1900-1950)

By the early to mid-20th century, parity was reached between the use of money and widespread numeracy. The formalisation of educational systems meant that most individuals were now equipped with basic arithmetic skills, enabling them to engage in economic transactions without relying on personal trust or empathy. This period also saw the rise of formal markets, contracts, and systems of legal recourse that further abstracted the personal elements of trade.

In the era of modern capitalism, money and numeracy became the dominant forms of exchange, marginalising the empathetic, trust-based barter systems that had sustained human communities for millennia. However, this shift also marked a loss of the deeply personal connections that had once been at the heart of human exchange.

In Summary

The history of economic exchange reveals that, before the advent of money and numeracy, empathy was the foundational element that enabled humans to trade and survive. Barter systems, far from being primitive, were sophisticated networks of trust and mutual understanding, where empathy was the key to successful exchange.

The introduction of money and the spread of numeracy transformed these systems, abstracting human exchange and reducing the need for empathy in economic transactions. While modern economies thrive on efficiency and impersonal markets, the early history of barter reminds us that at the heart of human exchange lies a deeply empathetic connection that can never be fully replaced by systems of currency and calculation.

The above defines the journey from barter to the modern economy is one that highlights the complex evolution of human interaction, where empathy played a crucial role in a world without standardised currency or widespread numeracy.

Understanding this history reminds us of the deeper connections between economic systems and human relationships.

Sources:
• Davies, Glyn. A History of Money: From Ancient Times to the Present Day. University of Wales Press, 2002.
• Graeber, David. Debt: The First 5,000 Years. Melville House, 2011.
• Kaye, Joel. A History of Balance, 1250-1375: The Emergence of a New Model of Equilibrium and Its Impact on Thought. Cambridge University Press, 2014.
• Ferguson, Niall. The Ascent of Money: A Financial History of the World. Penguin Press, 2008.

By Joe Bloggs

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