Why didn't two people just swap what they had?

Often, they couldn't. Picture a farmer who has grain and wants shoes, while the cobbler wants fish, not grain. A direct swap only works if each side holds exactly what the other wants, at the same moment. Economists call this the double coincidence of wants.

For a long time, economists told a tidy story about it. Since Adam Smith in 1776, they have pictured early villages swapping goods, until barter got so clumsy that people settled on one thing everyone accepted: money.

Anthropologists push back. No study has found a society, past or present, that ran purely on barter. David Graeber argued that real barter happened almost always between strangers. People who knew each other relied on credit instead: favours and debts they remembered.

Yet the economists' problem is real, as one odd episode shows. In 1945, R. A. Radford described how prisoners in a prisoner-of-war camp ended up with their own money. In the camp shop, every item had a fixed price in cigarettes. Only cigarettes were accepted: no barter. This cigarette money even went through inflation and deflation, like real money.

So both sides hold part of the truth. Money may not have grown out of village barter. But when strangers must trade without trust or credit, a shared money can appear remarkably fast.