To Conrad Arensberg (5 July 1953)

[99]The Dear Connie,

let me put some order into my thoughts on Project No.1. 'Food transcations in tribal and archaic type society'. (Some precisions on what I mean here by tribal and archaic will be given later.) I am looking at the question backwards, a sit appears from the later stage, and will set out first, briefly some six points that are clearly distinguishable; then list a few points of evidence in regard to each of them; eventually indicating in a more or less sketchy way kind of anthropological material I have come across in regard to each of them.

The following points strike me in the archaic material: (1) … […]

Ad. 1: […] The use of measures (large and small) …

[100] Ad. 2. Prohibition of gain made on exchange and on transactions in general. With an Aristotelian term, 'gain' means here 'gain made off the other man' (ap' allélōn). In my terms it means gain made in bargaining or higgling haggling exchange, or - put still in another way - on exchanges as a form of integration. The gain made in an exchange as set prices is not made off the other man, it is an another name for the interest which induces the partners to exchange at the set price. Bargaining exchange involves a different behavior, namely one through which the partners hope to influence the terms of the exchange in their favor.

Transactions means any voluntary vice-versa movements of goods (or services) between the partners. The main forms are sale - purchase, loaning-borrowing, renting - hiring. Since in early society the free alienation of land, cattle and slaves is exceptional (only in their use is alienated. In other words renting, hiring and borrowing antedate sale-purchase. The prohibition of gain on exchange, is therefore, primarily the prohibition of gain made on renting, hiring and loaning (the so called usury laws). Old Testament strictly prohibited gain on transactions; the Mishnah even more rigidly extended this prohibition to all transactions such as the Old Testament had not yet envisaged; the Talmud, on the contrary, maintains the semblance of law enforcement while actually making gainfulness possible (within reasonable limits). The Mishnah is dominated by the spirit of the Law; while the Talmud is an enforcement of this letter. The study of the Mishnah repays the student of economic institutions antiquity manyfold. It was the law book of the religious community of a non-commercial character yet having occasional dealings sub as are unavoidable even under primitive pastoral and peasant conditions. It does therefore not vise at commercial laws, but at moral laws, including those regulating occasional transactions. The dominant concern is the exclusion of gain. All this was developed out of one or two references in the O.T. to equivalency exchange as the result of tribal reciprocity behavior. The so called prohibition of usury was a universal prohibition of gainfulness in transactions. Since the spirit of the Talmud was contrary to the Mishnah, on which was based, the enormously informative material contained in the Jewish law books have not until now received any scientific attention on the {pat} of the economic historian. Especially in regard to the institution of interest, the Babylonian law and practice is most confusing and obscure, which explains why the discovery of the cuneiform business practices have not contributed at all to the clarification of the vexed question of the prohibition of usury. In the Mishnah even the use of money as a 'standard' is employed to ensure the avoidance of gain; a woman bread is enjoined to note its silver price and to accept only bread to the same value in repayment otherwise he might fall in the sin of 'usury'. This principle, as we will see underlay Babylonian legislation and can be shown to have survived in Aristotle's notions on money which he describes as a device for keeping exchange equivalent; in the affirmative sense of banning all notion of gain from trade as a 'natural' means of maintaining self-sufficiency.

Ad 3. Equivalencies … […] […]

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KPA: 49/01, 99-100