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David Graeber on debt in the medieval period, when coinage largely disappeared sparking multi-credit arrangements. From March 2015.

Anthropologist David Graeber examines the medieval period when coinage largely disappeared and money become virtual once again.

During this period, the great popular religious movements of the Ancient world - Christianity, Islam in the West, Buddhism in Asia - became the dominant force in society. Religious authorities took over the management of the new credit systems because, during the Middle Ages, the economy did not, as text-books have long assumed, "revert to barter." What the Middle Ages really saw was the rise of an endless variety of credit arrangements.

In the West, tally sticks were commonly used to facilitate credit based transactions. These were short pieces of hazel wood which served as a receipt for payment. The stick would be notched in order to indicate the amount that had been paid, then the stick would be split lengthways and both the payer and the receiver would receive one half. This was quite a convenient sophisticated system as they were easy to store and they were very hard to forge. A tally stick could act as a receipt for money advanced, as a receipt for a loan, or as evidence of a debt and could later be proffered in court if there was a dispute.

With transactions carried out on credit, the religious authorities had to act in order to prevent those with the means to create credit from enslaving entire populations. Their response was to ban the charging of interest.

David Graeber pays particular attention to Islamic attitudes towards interest and finance, revealing the surprising fact that Adam Smith's free market ideology was heavily influenced by the work of medieval Islamic scholars.

Producer: Max O'Brien
A Juniper production for BBC Radio 4.

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15 minutes