Barter and beat the bust

PUBLISHED : Saturday, 15 August, 1998, 12:00am
UPDATED : Saturday, 15 August, 1998, 12:00am

It is no good blaming the Government. And there is really not much point in blaming George Soros. Just like the American banks speculating against the Hong Kong dollar this week, all the money market hoodlums have been doing is work within the system.

You cannot blame them for the system, any more than you can blame American children who shoot their classmates. It is the way the world they live in works. There are heavy-hitters making sure it stays that way, too. What the National Rifle Association is to guns, what the World Trade Organisation is to trade, the International Monetary Fund (IMF) is to free-floating exchange rates and collapsing economies.

Do not blame the IMF, either. It is just part of the system - and at least it believes it is doing the right thing. In fact, the real culprits were the ancient Lydians. The ancient Chinese had a hand in it, too, but we will come back to them.

Week Ending's research and analysis department has been leafing through the archives. After months of painstaking sifting of facts, we are convinced Asia could have avoided its present difficulties if only the ancient world had not made that fateful decision to give up barter and move to a money economy.

It was the King of Lydia's fault. It was round about 600BC. He was sitting on the balcony of the Spanish-style villa, built for him by Kong, Lo and Au-yeung of Sha Tin architects, in exchange for a junk-load of marble from his quarries in Asia Minor. In the cool of the air-conditioning (a Hittite slave waving a palm frond) he sat, dreamily watching his people exchange pigs for brides and Turkish Delight for the rhubarb powder.

Suddenly, it came to him. Why not use coins instead? After all, was it not insulting to measure a valuable load of pigs by their weight in mere virgins? And what if you happened to want to buy a bolt of Chinese silk from some passing caravan and the camel driver did not fancy the thermostatically controlled kebab grill you were offering in return? But what if you could strike thousands of round metal disks, all of exactly the same silver and gold mixture, all with your own kingly head on them and all considered to be worth one pig, for example, or one kebab fork? Then you could buy one pig's worth of virgins or 2,000 kebab forks worth of silk, without actually having to part with your pig or foist two thousand kebab forks on some unwilling travelling silk-salesman. Your royal fame would be spread far and wide. Foreigners would tremble.

It is possible his scheme might have succeeded in the East, just as it did in the West, but for the fact that the ancient Chinese had already hit on a parallel scheme which seemed to work just as well. They had been using cutesy, miniaturised bronze hoes and spades for hundreds of years to pay for goods they could not barter.

However, by 600AD, China was using paper money to perform the same function. That was when things started to go wrong. The money was worth far more than the paper it was written on. A pig, sir? No problem. That will be half a tatty, old sheet, sir.

Finally, in the 20th century, someone came up with the idea of bits of plastic. These were not only worth more than the material they were written on, they were worth whatever you wanted them to be worth. You could borrow against them and sometimes you could even win free gifts by using them.

By now, even IMF officials must see where all this is leading. The fact is that money has lost its value as more and more people spend more and more of it more and more quickly.

But a pig is still worth a pig, even though rarity value may have pushed up the price of chaste maidens. Were we to do what unpaid Siberian coal-miners have begun to do recently, that is to exchange bags of coal for vodka or other necessities, we could give up this money business for a while and concentrate on a little barter. Hong Kong real estate agents could swap unfinished apartments for garments from bankrupt clothing stores. Stockbrokers could accept payment in egg tarts.

Of course, we would soon find ourselves unable to exchange our birthrights for a mess of potage, or our kingdoms for a horse. You do have to have something worthwhile to offer. But by that time, perhaps, we would have restored everyone's faith in money and put the region on the road to recovery.