Abstract
The exchanges made between peasants in marketplaces are predominantly one-time, on-the-spot transactions. That is why, all across the world, a large quantity of currency whose value is divisible enough to accommodate such transactions, which are significantly seasonal, is necessary to meet demand. If money is not provided exogenously, locals create money themselves. Importantly, however, creating an endogenous currency does not exclude materials for that currency, such as cowries, being brought in from outside. Local transactions in Africa were open enough to attract a variety of items from outside to serve as a means of exchange. Increases in the prices of peasant products such as palm oil in Africa and seed oils in Asia under the international gold standard regime gave colonial authorities a good chance to introduce colonial currencies that were convertible with currencies in the home countries and, in the process, demonetize pre-existing currencies in Africa and Asia. The substantial fall in the price of peasant products during the Great Depression diverted peasants both in Africa and Asia from market transactions for export. It was difficult for existing colonial currencies in Africa to accommodate rural transactions in lower denominations, and this caused commodity currencies such as cowries to survive or partly revive at the ground level. Free from a state-oriented teleology justifying top-down reformation, the transformation of monetary usage in Africa and Asia reveals that endogenous means substantially determined how money was made for locals.
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Notes
- 1.
Conveniently some scholars interpreted inconvertible currencies in Africa as special-purpose money. For example, Bohannan and Dalton characterized the separation of the unit of account and the actual means of exchange as an example of special-purpose money which revealed the peripheral role of the market principle, in contrast with a single all-purpose money which is necessary for the market principle to fully function (Bohannan and Dalton 1962, p. 12). They located the disconnection outside market activities without considering the reason why a unit of account was detached from a means of exchange. Thus, unfortunately, they could not resist a teleological framework that did not reflect history.
- 2.
Karl Polanyi distinguished the “internal market” created by state intervention from both local and distant markets. By “state”, he actually meant European mercantile states. He thought that, unlike the combination of local market and long-distance trade, the internal market developed through competition. Not delving into the difference in exchanges between local markets and interregional markets, he assumed the existence of political or social factors permanently separating proximate and distant exchanges. Unfortunately, he did not try to find any coherent reason why local currencies independent of interregional currencies so commonly existed (Polanyi 1957, pp. 56–67).
- 3.
Citing that gold and cowries made a set of currency in most parts of West Africa, Hopkins was doubtful about applying the concept of special-purpose money to Africa. He could have made clearer his objection to the idea of a “market principle” that ignored the variety in exchanges if he found that complementarity among monies was universal beyond Africa (Hopkins 1973, pp. 69–70).
- 4.
Akinobu Kuroda, “Old Chinese Coins Standard in Medieval Japan: Demonetized and Imitation Coinages Mediating Exchanges beyond the Sea” (Unpublished).
- 5.
To take an example from outside Africa and Asia, in early twentieth-century Mexico, fractional currency was required so much that 1 copper centavo, the smallest coin, was cut in half and used as currency in marketplaces. Shortages of coin caused wood and salt to be used as currency in the highlands (Maliknowski and de la Fuente 1982, pp. 144–145, 200).
- 6.
The king of Buganda tried to fix the price of ten small fish at one cowrie in the late nineteenth century (Pallaver 2015, p. 478). Depending on the situation, even the value of a cowrie might not have been sufficiently fractional.
- 7.
Basden observed that prices had increased in the villages of the Igbos after 1900 (Basden 1921, p. 198).
- 8.
The introduction of new export crops, such as cotton in Uganda, also encouraged colonial coins to circulate (Pallaver 2015, p. 498).
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Kuroda, A. (2022). Another History of Money Viewed from Africa and Asia. In: Pallaver, K. (eds) Monetary Transitions. Palgrave Studies in Economic History. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-83461-6_11
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