A community without a medium of exchange or a unit of value has … never been found.

The fairy tale of the origin of money set out in Box 1.1 saw money as emerging from the market-like exchange of goods between individuals through barter. According to the story, the invention of money created a true market that was able to flexibly exchange goods. All goods and services could be accessed as commodities – that is, at a price expressed by money. The value of each commodity could be represented by the equivalent value in money. The value of money itself derived from its status as a commodity. Precious metal was chosen because it was rare and desired. It was also portable, durable, malleable and divisible. The use of money was defined by its main market functions as a yardstick to set and compare prices (unit of account) and as a means of exchange (which in the last chapter was redefined as a means of transfer).

The main problem for the fairy story is the lack of historical evidence. The core assertion that economies were originally based on moneyless barter cannot be substantiated. Equally, the link between the origin of money and the development of markets is not supported by the evidence. Money as coinage, the form of money associated with the story, is much older than market-dominated societies. Even if the fairy tale were true, modern money is fiat and fiduciary (from the Latin fidere, to trust), with no link to precious metal or anything else except the capacity of the whole economy embraced by the particular money system. This is not to say that money in market economies does not have specific features and functions, but this does not reflect the origin or universality of money itself.

If money is not to be defined by its market form, how is it to be understood? As Alison Hingston Quiggin observes in the quote at the beginning of this chapter, something that can be described as money exists in most, if not all, human communities. It is therefore helpful to an understanding of money to look at its nature and usage before the domination of markets and states. Evidence from pre-market, pre-state societies collected by anthropologists reveals an intriguing range of forms of money.