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Non-monetary Exchange: Barter and Gift

2010-11-08T07:27:00.000-08:00

Contrary to popular conception, there is no evidence of a society or economy that relied primarily on barter. Instead, non-monetary societies operated largely along the principles of gift economics. When barter did in fact occur, it was usually between either complete strangers or would-be enemies.

With barter, an individual possessing a material object of value, such as a measure of grain, could directly exchange that object for another object perceived to have equivalent value, such as a small animal, a clay pot or a tool. The capacity to carry out transactions is severely limited since it depends on a coincidence of wants. The seller of food grain has to find a buyer who wants to buy grain and who also could offer in return something the seller wants to buy. There is no common medium of exchange into which both seller and buyer could convert their tradable commodities. There is no standard which could be applied to measure the relative value of various goods and services.

In a gift economy, valuable goods and services are regularly given without any explicit agreement for immediate or future rewards (i.e. there is no formal quid pro quo). Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community.

There are various social theories concerning gift economies. Some consider the gifts to be a form of reciprocal altruism. Another interpretation is that social status is awarded in return for the 'Gifts'. Consider for example, the sharing of food in some hunter-gatherer societies, where food-sharing is a safeguard against the failure of any individual's daily foraging. This custom may reflect altruism, it may be a form of informal insurance, or may bring with it social status or other benefits.

The History of Money

2010-11-08T07:24:00.000-08:00

The history of money spans thousands of years. Numismatics is the scientific study of money and its history in all its varied forms.

Many items have been used as commodity money such as naturally scarce precious metals, cowry shells, barley, beads etc., as well as many other things that are thought of as having value.

Modern money and most ancient money is essentially a token — in other words, an abstraction. Paper currency is perhaps the most common type of physical money today. However, objects of gold or silver present many of money's essential properties.

James Wilson Marshall - Gold discovery in California

2010-11-07T02:20:00.000-08:00

James Wilson Marshall (October 8, 1810 - August 10, 1885) was an American carpenter and sawmill operator, whose discovery of gold in the American River in California on January 24, 1848 set the stage for the California Gold Rush. The mill property was owned by Johan (John) Sutter who employed Marshall to build his mill. The wave of gold seekers turned everyone's attention away from the mill which eventually fell into disrepair and was never used as intended. Neither Marshall nor Sutter ever profited from the gold discovery.

Gold discovery

The actual spot where Marshall first discovered the gold that started the California Gold Rush.

On the morning of January 24, Marshall was examining the channel below the mill when he noticed some shiny flecks in the channel bed. As later recounted by Marshall:

“ I picked up one or two pieces and examined them attentively; and having some general knowledge of minerals, I could not call to mind more than two which in any way resembled this, very bright and brittle; and gold, bright, yet malleable. I then tried it between two rocks, and found that it could be beaten into a different shape, but not broken. I then collected four or five pieces and went up to Mr. Scott (who was working at the carpenters bench making the mill wheel) with the pieces in my hand and said, "I have found it."
"What is it?" inquired Scott.
"Gold," I answered.
"Oh! no," replied Scott, "That can't be."
I said,--"I know it to be nothing else."
”
The metal was confirmed to be gold after members of Marshall's crew performed tests on the metal—boiling it in a lye solution and hammering it to test its malleability. Marshall, still primarily concerned with the completion of the sawmill, permitted his crew to search for gold during their free time.

By the time Marshall returned to Sutter's Fort, four days later, the war had ended and California was about to become an American possession. Marshall shared his discovery with Sutter, who performed further tests on the gold and told Marshall that it was "of the finest quality, of at least 23 carats [96%]."

News of the discovery soon reached around the world. The immediate impact for Marshall was negative. His sawmill failed when the all able-bodied men in the area abandoned everything to search for gold. Before long, arriving hordes of prospectors forced him off his land. Marshall soon left the area.

Marshall returned to Coloma in 1857 and found some success in the 1860s with a vineyard he started. That venture ended in failure towards the end of the decade, due mostly to higher taxes and increased competition. He returned to prospecting in the hopes of finding success.

He became a partner in a gold mine near Kelsey, California but the mine yielded nothing and left Marshall practically bankrupt. The California State Legislature awarded him a two-year pension in 1872 in recognition of his role in an important era in California history. It was renewed in 1874 and 1876 but lapsed in 1878. Marshall, penniless, eventually ended up in a small cabin, earning money from a small subsistence garden.

Marshall died in Kelsey on August 10, 1885. His body was brought to Coloma and buried on the property where he had owned his vineyard. The grave was in a hill that overlooked the south fork of the American River. In May 1890, a monument was erected over his grave site. A statue of Marshall stands on top of the monument, pointing to the spot where he made his discovery in 1848.

California Gold Rush

2010-11-07T01:45:00.000-07:00

The California Gold Rush (1848–1855) began on January 24, 1848, when gold was found by James W. Marshall at Sutter's Mill, in Coloma, California. News of the discovery brought some 300,000 people to California from the rest of the United States and abroad. Of the 300,000, approximately half arrived by sea and half walked overland.

The gold-seekers, called "Forty-niners" (as a reference to 1849), often faced substantial hardships on the trip. While most of the newly arrived were Americans, the Gold Rush attracted tens of thousands from Latin America, Europe, Australia, and China. At first, the prospectors retrieved the gold from streams and riverbeds using simple techniques, such as panning. More sophisticated methods of gold recovery developed which were later adopted around the world. At its peak, technological advances reached a point where significant financing was required, increasing the proportion of gold companies to individual miners. Gold worth billions of today's dollars was recovered, which led to great wealth for a few. However, many returned home with little more than they had started with.

The effects of the Gold Rush were substantial. San Francisco grew from a small settlement to a boomtown, and roads, churches, schools and other towns were built throughout California. A state constitution was written and California became a state in 1850 as part of the Compromise of 1850.