Our conversation with Robert Rosenswig was prompted by an article he published last year in the Journal of Economic Issues, “Ancient Tally Sticks Explain the Nature of Modern Government Money.” The journal prioritizes “contributions that examine the political economy of food, healthcare, energy, telecommunications, transportation, education, or recreation provisioning.” One of the fascinating things about Robert’s work is how it connects his professional contributions as a respected scholar of Mesoamerican cultures (the Maya being one of the tally stick examples his article explores) to political and economic questions that feel very relevant today. In that spirit, we had to ask him how his argument for the origins of money — that its value is intrinsically tied to demand created by government tax debts — intersects with the rise in the last 15 years of cryptocurrencies, which are often celebrated as means of private exchange free from government intervention. The answer, he said, has a lot to do with what gives people trust that money has any value at all. Here is what he had to say. OK, you're invited to explain your findings at a crypto conference. Is that ending with standing ovation or are you getting heckled off the stage? Folks who have adopted the ethos of crypto, of how and why it came to be, do you think they would be excited about your argument or…? RR: Carl Menger, who is the father of Austrian economics, has quite a famous paper where he basically says money is a big Ponzi scheme, essentially, and that everyone's just passing off the money until someone figures it out. Crypto is money in the sense that frequent flyer miles are money. I mean, if you take your frequent flyer mile catalog, you probably wouldn't have a very healthy diet, but you probably could live from everything in that catalog and get clothing and food and everything. But you probably wouldn't want your retirement to be denominated in frequent flyer miles, right? I’d get heckled off the stage at the crypto conference because their idea of money is the Carl Menger view: It's all a big Ponzi scheme and the only reason it has value is because people keep using it. And if they stop, it'd be like a game of musical chairs, and some people are going to be out lots of money. So they would argue, I think, that government money is the same. And what I'm saying is that private money like crypto is very different than government money. Government money is backed by taxation, which creates a demand for it. Private money is not. In the ancient world, many of the trading organizations were based on religious and ethnic groups, partly because there was an internal trust within those groups of people and a social ramification for violating that kind of trust. Now blockchain in the crypto case is a good accounting measure, an independent accounting measure, and blockchain technology is quite impressive. But there's no inherent value to cryptocurrencies. And so it is an alternative source or an alternative means of exchange or creation of value that is not based on anything. It's based on aspiration or on hope that it will be worthwhile or it will be valuable in the future. So crypto folks wouldn't like this. Go deeper Read more about Robert’s work as an anthropologist, including the Soconusco Archaeological Project, which examines the development of agriculture and social stratification in Mexico’s Chiapas state and neighboring Guatemala. Also check out UAlbany’s Institute for Mesoamerican Studies. Episode credits Research and writing by Michael Parker Audio editing and production by Scott Freedman Photos by Patrick Dodson Written and hosted by Jordan Carleo-Evangelist The Short Version is produced by the Office of Communications and Marketing at the University at Albany, which is part of the State University of New York. Comments, ideas, suggestions? Send them to mediarelations@albany.edu and be sure to put The Short Version in the subject line.
