I can take stab at this one, though I’m going to use Early medieval period as the backdrop. I think the key to understanding honor as social currency is the theory of “peace in the feud,” which is often applied to early medieval Europe as a way of explaining why defending one’s honor was so essential at that time.

“Peace in the feud” is the idea that an armed society without a strong centralized government can mediate disputes and attain relative equilibrium through carefully administered threats and ritualistic violence.

Imagine two men, Charles and Phillip get into a brawl around the year 600 in West Francia. The fight ends with Phillip badly beaten. Charles leaves unharmed.

When Phillip comes to, he’ll want to exact retribution. Under the Salic law and in his cultural world, he is probably entitled and expected to exact retribution! (Not to mention the basic human desire for revenge.)

In early medieval Europe, retribution is typically exacted at the tip of a sword rather than through the courts. While courts did exist, much of the time their judgements amounted to what we would call court-sanctioned vigilantism. Basically, “Yes, he was in the wrong. You are free to retaliate without fear of sanctions.”

Being free to retaliate “legally” doesn’t mean anything if you can’t back up your threat with actual force. You and your cousins, brothers, and otherwise will have to band together and overcome your target’s kin-group.

Your reputation becomes everything in this context.

Back to Charles and Phillip.

When Phillip returns to his kin, they’re going to have questions like:

“Why did he do it?” “Did you insult his honor?” “Will his kin back him?”

And more. In the end they will have to decide either explicitly or implicitly (through quiet absence) to aid Phillip in his quest for justice / a public lynching.

But why does Phillip need to defend his honor? Because if he doesn’t, his community will know that he can be pushed around.

Furthermore, they might be more willing to push his kin around because they suspect Phillip lacks the stones to back them up.

This is a serious enough problem that even if Phillip personally doesn’t care to take revenge, he may be pressured into it by his family simply to preserve social capital/honor.

Remember, this is a society without law or courts as we understand them. If you lose the protection of your kin, you have a huge target painted on your back.

On Charle’s side of things, his family will be asking similar questions, and they’ll have to decide if he was justified.

Even if he wasnt justified, they may side with him for reasons of “honor” because they may need his support in the future. Of course, they could decide that his actions were unwarranted and let Phillip have his way, but they would face that same potential erosion of their social capital.

You can see how this set of social incentives could very quickly degenerate into tit-for-tat violence between kin groups (and it often did).

Both sides face a problem: honor needs to be preserved so that both kin groups can retain the social capital needed to operate safely in a violent world.

Different societies devised many ritualistic solutions to this problem of feuding kin groups, with varying degrees of success.

Some of those solutions involve ritual penance, fines paid to the victim of a perceived wrong, judicial duels (trial by combat), trial by ordeal (grasping hot irons), and plenty more.

Although these solutions reduce the necessity for raw, violent manpower, they are still achieved through the use of communal judgement and negotiation, which still requires a kin group that has your back. There isn’t any reason to “settle” for lesser vengeance if unless your target has a strong kin group that will back him up.

For them to have his back, they have to know that he has their back.

Hence, honor as social currency. This is where those “great lengths to defend honor” you asked about start to make sense.

Without honor, you stand alone.

Peace in the feud is everyone having “sufficient honor” or “social capital” that open conflict amounts to mutually assured destruction within the community. Ideally, that makes the community more open to ritualistic or judicial penance as opposed to “burning down your house and cutting off your hands” style penance.

Obviously this is a flawed system for human governance to our eyes, but it’s what they had!

I hope this helps you to understand honor as social currency! Obviously government and society had changed immensely by the early modern period which you asked about specifically. Maybe another commenter can provide more specific information, but don’t underestimate the power of tradition and culture. We are descended from these people after all.

For further reading I strongly recommend “Violence in Medieval Europe” by Warren C. Brown, where he brilliantly explains these interactions in great detail throughout the medieval period.