Reflections on Exchange - Interdisciplinary Conversations

Source: Merchants of eatables Bona Algeria By Snapshots Of The Past  (Wikimedia Commons)

How did people exchange items of value? In one form or the other, this question has cropped up in the scholarship of historians, anthropologists and philosophers - legal or social. Discussions on this topic contribute to grappling with comprehension of social and economic change in the pre-modern or modern world.

Was Hundi a Merchant Guild? The Question of Contract Enforcement

Merchant guilds are an important subject for economic historians because of their importance in understanding merchant organisation or networks in trade. One question that particularly occupies occupies economic historians is the question of contract enforcement. How did merchants cooperate and transact with each other, and minimise the risk of defaulting? Today we tend to think of contracts as a necessary prerequisite for transactions, backed up by a legal system. In times past, promises would have formed the basis for the earliest form of contract. A promise was regarded as less risky where parties were known to each other because peer pressure and collective reprisals in the community were more likely to reduce the risk of someone reneging on a promise. As long-distance trade with foreign entities developed, the risk of defaulting would have been greater. 

What on Earth is Hundi? The foibles of 'informality' and 'indigeneity'.

It is perhaps ironic that an ancient South Asian banking system which had earned a reputation for trust should today be widely regarded as an opprobious marker of the black market economy. Also known as hawala, havala, or havale, hundi's disrepute is relected in the in the many villainous descriptions awash in the in the international press: 'illegal financial transactions market', 'black money' and 'drug money', 'system of tax evasion', illegal transfers of foreign exchange', 'illegal money laundering network' and Hindi word meaning 'providing a code'. In a similar vein, the descriptions of hawala and hundi as informal  or alternative  have developed because they are perceived as both unofficial and lacking in legal accountability. The confusion does not cease there; there is not universal agreement over whether hundi and hawala are in fact the same, and just as press descriptions have been wildly different, this uncertainty has much to do with diverging opinions of what hundi and hawala respectively are.