Bruce Johnsen has posted “The Potlatch as Fractional Reserve Banking” on SSRN, forthcoming in Unlocking the Wealth of Indian Nations, edited by Terry L. Anderson. Here is the quick description:
This chapter focuses on the Northwest Coast Tribes’ early capital markets and specifically on how their potlatch system served as a system of fractional reserve banking to expand their money supply and finance wealth enhancing investments.
From the NYTs:
Now that hard times have arrived, now that we’re being punished for our great credit binge, what are we supposed to do for the holidays? The logical answer is to cut out the useless and the lavish, but I have it on the highest authority that it’s just not that simple.
The authority is Bill Cranmer, whom I consulted for holiday tips because he is a hereditary chief and elected leader of the Kwakwaka’wakw Indians, the world’s most experienced gift-givers. They’ve learned that exchanging presents is too important to be discontinued in any kind of economy.
These Indians on the Pacific coast of British Columbia are famous for their potlatches, which are feasts and gift-giving ceremonies that serve a variety of functions: creating alliances, promoting altruism, redistributing wealth, vanquishing rivals and, not least, showing off. The events, particularly at their most extreme in the 19th century, became a staple of anthropology textbooks (which referred to the Indians as the Kwakiutl) and helped inspire Thorstein Veblen’s theory of conspicuous consumption.