Question

Difficulty: HardCross-Author Inference

The two texts below offer differing theoretical frameworks regarding the origins and nature of money.

Passage A
The origin of money is conventionally traced to the organic evolution of market exchange. In early human societies, economic transactions were constrained by the severe inefficiencies of direct barter, which necessitates a "double coincidence of wants"—both parties must simultaneously desire precisely what the other has to offer. To overcome this systemic friction, profit-seeking individuals spontaneously began utilizing highly marketable commodities, such as cattle, salt, or precious metals, as intermediary media of exchange. Over time, precious metals like gold and silver became the dominant form of money globally due to their durability, divisibility, and physical portability. Crucially, in this classical framework, money's purchasing power is intrinsically linked to the independent market value of the underlying commodity itself. The historical transition from weighing raw bullion to trading standardized coinage did not alter this fundamental reality; it merely represented a technological convenience. State authorities eventually stepped in to mint coins with standardized weights and purities, thereby saving merchants the transaction costs of repeatedly weighing and assaying metals during every trade. However, the state did not bestow economic value upon the money; it merely certified the intrinsic value already established by the spontaneous, decentralized order of the market.

Passage B
Traditional economic narratives routinely suggest that money emerged spontaneously from barter as a convenient medium of exchange, yet the actual historical and anthropological records reveal a radically different genesis. Money is, and historically always has been, fundamentally a creature of the state or centralized authority. The earliest unequivocally documented monetary systems in ancient Mesopotamia did not consist of autonomous merchants trading silver for grain in local markets; rather, they were sophisticated, abstract administrative accounting systems developed by palace and temple bureaucracies to track debts, exact tribute, and manage resource allocation. Money was created not to facilitate decentralized private trade, but to organize state provisioning. By imposing non-reciprocal tax or tribute obligations on its population denominated in a specific unit of account, a central authority creates an immediate, pervasive demand for whatever physical tokens it decides to issue and accept to settle those obligations. It is exactly this legal and administrative mechanism—the power to tax and the exclusive designation of what constitutes acceptable payment—that imparts value to money, strictly irrespective of the token's intrinsic material worth. Consequently, the state's role is not merely an afterthought providing the convenience of standardized minting, but the very ontological foundation of monetary value itself. A token accepted by the state for tax settlement functions perfectly well as money, even if it is recorded on a clay tablet or printed on otherwise worthless paper.

Based on the principles outlined in Passage B, how would the author of Passage B most likely explain the historical phenomenon, noted in Passage A, that precious metals like gold and silver became the dominant form of money globally?

  1. Centralized authorities and state bureaucracies in various societies must have designated those specific metals as the required tokens for settling tax or tribute obligations.Answer
  2. B
    The durability and physical portability of precious metals made them the most logical medium for palace bureaucracies attempting to facilitate decentralized local trade.
  3. C
    Both decentralized markets and centralized states ultimately recognized that the intrinsic material worth of silver and gold provided the only stable foundation for an administrative accounting system.
  4. D
    Profit-seeking individuals recognized the high market value of precious metals and adopted them to avoid the double coincidence of wants, a market practice that early states simply formalized.
  5. E
    The aesthetic appeal and global scarcity of these metals encouraged ancient rulers to hoard them, which inadvertently established them as the standard medium of exchange for citizens.

Answer

Centralized authorities and state bureaucracies in various societies must have designated those specific metals as the required tokens for settling tax or tribute obligations.
The correct answer accurately synthesizes the core argument of Passage B to explain the observation made in Passage A. Passage B argues definitively that money derives its status and value not from intrinsic worth or spontaneous market convenience, but from a central authority declaring it acceptable for the settlement of tax or tribute obligations. Therefore, if Author B were forced to explain why gold and silver became widely used as money (a fact stated in Passage A), Author B would logically have to conclude that central authorities chose to demand gold and silver for taxes.

Step-by-Step Solution

1
Identify the historical phenomenon in Passage A that needs explaining.
Passage A notes that 'precious metals like gold and silver became the dominant form of money globally.'
The question asks specifically how Author B would account for this exact phenomenon.
2
Determine Author B's core mechanism for how anything becomes money.
Author B argues that a central authority creates demand for a token by 'imposing non-reciprocal tax or tribute obligations' and designating what constitutes acceptable payment.
Author B rejects organic market evolution (Author A's explanation) and insists all money is driven by state tax mechanisms.
3
Synthesize Author B's mechanism with Passage A's phenomenon.
If gold and silver became globally dominant as money, Author B's framework dictates it could only happen because state authorities globally designated them as the acceptable tokens for settling tax obligations.
Cross-author inference requires strictly applying the logical framework of one author to the factual premises of the other.

Key Concept

Cross-Author Inference
Estimated Time:2m 30s
Rate this question