The Origin of Money and Today's Mackarel and Animal Farm Currencies

Contrary to common perception money originated not from governments but from free markets,

According to Murray N. Rothbard in What Has Government Done to Our Money?, `` Now just as in nature there is a great variety of skills and resources, so there is a variety in the marketability of goods. Some goods are more widely demanded than others, some are more divisible into smaller units without loss of value, some more durable over long periods of time, some more transportable over large distances. All of these advantages make for greater marketability. It is clear that in every society, the most marketable goods will be gradually selected as the media for exchange. As they are more and more selected as media, the demand for them increases because of this use, and so they become even more marketable. The result is a reinforcing spiral: more marketability causes wider use as a medium which causes more marketability, etc. Eventually, one or two commodities are used as general media--in almost all exchanges--and these are called money.”

What ideal place to demonstrate this than in the ultimate government controlled living place-Prison Facilities!

In the US, a Californian prison where the US dollar has been banned to circulate within its premises, inmates have elected by implicit virtue of the above dynamics as their alternative currency of choice-cans of Mackarels!

Wall Street Journal

This interesting article from Wall Street Journal (emphasis mine),

``When Larry Levine helped prepare divorce papers for a client a few years ago, he got paid in mackerel. Once the case ended, he says, "I had a stack of macks."

``Mr. Levine and his client were prisoners in California's Lompoc Federal Correctional Complex. Like other federal inmates around the country, they found a can of mackerel -- the "mack" in prison lingo -- was the standard currency.

``"It's the coin of the realm," says Mark Bailey, who paid Mr. Levine in fish. Mr. Bailey was serving a two-year tax-fraud sentence in connection with a chain of strip clubs he owned. Mr. Levine was serving a nine-year term for drug dealing. Mr. Levine says he used his macks to get his beard trimmed, his clothes pressed and his shoes shined by other prisoners. "A haircut is two macks," he says, as an expected tip for inmates who work in the prison barber shop.

``There's been a mackerel economy in federal prisons since about 2004, former inmates and some prison consultants say. That's when federal prisons prohibited smoking and, by default, the cigarette pack, which was the earlier gold standard.

``Prisoners need a proxy for the dollar because they're not allowed to possess cash. Money they get from prison jobs (which pay a maximum of 40 cents an hour, according to the Federal Bureau of Prisons) or family members goes into commissary accounts that let them buy things such as food and toiletries. After the smokes disappeared, inmates turned to other items on the commissary menu to use as currency.”

Oh well, this is definitely a lot better than for society to utterly eschew government’s mandated legal tender similar to that in Zimbabwe where its 531 BILLION PERCENT hyperinflation (Voanews.com) rate has virtually ravaged or evaporated the purchasing power of its currency, enough for the people to reject it and find an alternative...

Courtesy of Zimbabwean

From “The Zimbabwean” Thomas Ncube, 58, who also lives in Dongamuzi, told IRIN he had exchanged all his goats and had nothing left to barter with. "The people who are selling maize are refusing cash, saying the Zimbabwean dollar loses value fast and they only exchange the grain with livestock, and most villagers have become poor from exchanging their livestock for grain." (highlight mine).

Welcome to the Barter economy!

Lesson: When governments take away or devalue money, people will always find an alternative.