An interesting website on the history of money cited in today's Financial Times:
<http://www.ex.ac.uk/~RDavies/arian/amser/chrono.html>.
Doug ----------
Like any version of history, it is important to note what is left out, as well as what is mentioned. Let's take the beginning of the use of money and its end in the West during ancient history. This roughly corresponds to 650 BC and 450 AD or the origin of the Athenian city state, and the Fall of Rome. The relevant texts are: JB Bury, A History of Greece, MacMillian, 1963, D Cary, A History of Rome, MacMillian, 1960, Herodotus, The Histories, (Rawlinson trans), Knopf, 1997.
I started this post originally in answer to a seriously twisted account posted here, from the WSJ, titled 'How Christianity Created Capitalism' or something to that effect. While the above chronology is less propagandistic, it still has its bright neoliberal agenda and makes it sound as if it's all been about progressive globalism since the Lydians first put stamp to electrum. Dower old Chuck says, horse shit.
Pig capitalism started with the spread of money downward into the class hierarchies (hierarchies it probably help produce in the first place), and that trickle downward started in or around 700 BC, Greece, in other words, simultaneous with the development of the Greek polis. The prior use of money by the Cretans, Greeks in Asia Minor (Lydians) and other peoples of Near East was probably restricted to exchanges between traders, merchants, nobles and between countries or kingdoms. The developments in Attica in seventh century differed in that the entire economy was monied from top to bottom.
It is interesting to note that the coins were stamped with the products a region was known for, a favored animal, noble, or god. So there are coins stamped with dolphins, turtles, goats, sheep, chickens, celery, grapes, olives, grain shafts, along with the local glitterati and gods.
Control of monetary wealth along with political and military power was in the hands of a dominate aristocratic oligarchy who simultaneously held control of agricultural production under a system of tenant and peasant farmers. As the use of money spread downward as a medium of exchange, it created a dependence on the class who controlled and held the greatest share and who used it to absorb smaller independent farmers.
The upper echelon were divided between noble families who owned land by right of birth, and a newer class who acquired it through conquest, grants, and money. The establishment of money in Attica as a medium of exchange and its value were a matter of law, set by a council and magistrate system that was also dominated by the same upper classes. It seems like a trivial exercise to me, to notice that the most likely benefactor of money was also the most likely purveyor and was probably the same newer class who promoted and enforced its use, i.e. the capitalist. Culturally this era with its shift of power from a noble landed class by right of birth, towards an equivalent class whose lands were acquired through monetary wealth, corresponds to the disappearance of the Heroic Age of Homer, the expansion of Greeks into Italy, the consolidation of Attica, and the rise of the city-states.
In Attica within a century after money was in wide use, the tenant and peasant farmer system was collapsing as the lower classes were systematically turned to poverty, then indentured servitude and finally slavery, while their lands or rights to it were confiscated. The way the system worked in the countryside was that small independent and tenant farmers sold their production for money to the dominate landed aristocracy. The money was spent for agricultural re-stocking, tools and other necessities as well as purchasing raw materials and finished goods from town and city merchants and tradesmen. Within Athens the same system created the same problem as free laborer, small tradesmen and crafts classes began to indenture themselves under debit, as the general economy began to collapse. Like the tenant and independent small farmers, the tradesmen purchased the materials and tools for their production with money. As prices rose, the system of credit evolved, in which they placed their lives, that is, their skills to produce as the collateral in exchange for monetary advances. In other words they indentured themselves against the debts incurred. Another interesting development that corresponds to this period is the transformation of Attica into an olive oil production region. This commerce seems to hint at a monoculture or the dependence of wealth on a single bulk agricultural product as yet another possible aggregating factor at work.
In any event, when debits came due and were in default, the creditor had the right to consider the money due equivalent to whatever assets the debtor possessed, and if those were insufficient, already owned by others or absent, then the body of the debtor. It was then an option to take the debtor as a slave or take some portion of his body. In the city, the free laborers were the first to go, then followed the trades and crafts, and upwards. In the countryside, the equivalent lower classes followed suit.
According to legend, the code of Draco (621 BC) decreed that small debits could be canceled with the amputation of a hand and larger ones with an arm or a leg, or measured out in years of servitude or ultimately permeant slavery. I jokingly referred to these codes as Draconian reforms in an earlier post. But, I suspect they might have been reforms, if you consider the alternatives as torture and execution. Compared to torture and death, amputation and slavery sound like reforms. Here is a hint from Herodotus:
"It was this Amasis who established the law that every Egyptian should appear once a year before the governor of his canton, and show his means of living; or, failing to do so, and to prove that he got an honest livelihood, should be put to death. Solon the Athenian borrowed this law from the Egyptians, and imposed it on his countrymen, who have observed it ever since. It is indeed an excellent custom." (218p, BII, chp177, _The Histories_, Rawlinson)
According to Bury, it was Solon who stopped this practice. In any event, Bury notes the developments leading up to Solon's constitutional reforms.
"Attica like the rest of the Greek world, was disturbed in her economic development by the invention of money. She had naturally been brought into close commercial relations with her neighbour Aegina, which at this time began to take a leading part in maritime enterprise. Accordingly we find Athens adopting the Aeginetan coinage, and using a system of weights and measure which was almost, if not quite, identical to the Aeginetan. The introduction of capital in the chests of successful speculators, was followed by a period of transition between the old system of the direct exchange of commodities and the new system of metallic medium; an this transitional period was trying to all men of small means. But the inevitable economic crisis did not come at once, though all conditions of social distress were present, and a conflict between the rich and the poor was drawing steadily near. An event happened about thirty years before the end of the century which shows that the peasants were still loyal to the existing constitution. [Conspiracy of Cylon, 632 BC] ...
...It must be remembered that money was still very scarce and that the peasants had now to purchase all their needs in coin. Even in Attica the small peasant could not cope with the larger proprietor. Thus the little farms of Attica were covered with stones, on which the mortgage bonds were written; the larger estates grew apace; the black earth, as Solon said, was enslaved ...
Thus while the wealthy few were becoming wealthier and greedier, the small proprietors were becoming landless, and the landless freemen were becoming slaves. And the evil was aggravated by unjust judgments, and the perversion of law in favor of the rich and powerful. The social disease seemed likely to culminate in a political revolution.
...To any student of contemporary politics, observing the development in other states, a tyranny would have seemed the most probable solution...The tyranny, thought it was ultimately to come, was postponed for more than thirty years. The mediator in the civil strife was Solon, ...
[Solon's archonship, 594-3, or 592-1 BC] Instead of making the usual declaration of the chief magistrate, that he would protect the property of all men undiminished, he made proclamation that all mortgages and debts by which the debtor's person was pledged were annulled, and that all those who had become slaves for debt were free. ...
After the canceling of old debts he passed a law which forbade debtors to be enslaved. He fixed a limit for the measure of land which could be owned by a single person, so as to prevent the growth of dangerously large estates. And he forbade the exportation of Attic products of the earth, except oil. For it had been found that so much corn was carried to foreign markets, where the prices were higher, that an insufficient supply remained for the population of Attica...
He would not confiscate and redistribute the estates of the wealthy, as many wished. And though he rescued the free labourer from bondage, he made no change in the Sixth-part system [harvest distribution], so that the condition of these landless freemen was improved only in so far as they could not be enslaved, and in so far as the law limiting exportation affected prices. And Solon was too discreet to attempt to interfere seriously with the conditions of the money market by artificial restrictions. He fixed no maximum rate of interest, and his monetary reforms must be kept strictly apart from his social reforms. Hitherto the Athenians did no coin money of their own. They used the Aeginetan currency. Solon inaugurated a native coinage, but he adopted the Euboic, not the Aeginetan, standard. Thus 100 of the new Attic drachmae were equivalent in value to about 70 Aeginetan drachme. The Attic coinage introduced by Solon is to be brough into connection, not with the domestic reform, but with the foreign policy of Athens, to which new prospects were opening..." (180-3p, _A History of Greece_, JB Bury)
Sounds familiar, doesn't it?
As you read towards the end of Roman history, some thousand years later, in the third and four century AD, you find the reverse process underway in Europe and the western mediterranean (see, M Cary, _A History of Rome_, 752-53p):
"The economic disasters of the third century greatly reduced the numbers of the bourgeois class which had thriven on industry and commerce in the first and second centuries, and of the free cultivators on the land, both proprietors and tenants. In the third and fourth centuries the concentrations of landed property into fewer hands, which had hitherto been held in check, made giant strides. As in the days after the Second Punic War, the favored few who still had wealth to spare embraced the opportunity of buying or leasing on easy terms, or simply appropriating, territory left derelict after devastation. The need of protection against foreign invaders or against oppressive administrators drove many of the remaining small proprietors to surrender their holdings to their wealthier neighbours, who could provide shelter against marauders in their fortified villas, and could make stand against tyrannous officials. Through this wholesale transference of property the latifundium became the prevalent type of estate in the Roman empire, and the actual cultivation of the soil was predominantly carried on by tenants."
As money disappears, the scarcity produces the same results of debts, indenture, and finally serfdom, bondage to agricultural estate economies for life that follows in perpetuity. That is serfdom is the inherited status of the children. The process of a deteriorating state bureaucracy (due to imperial wars, military coups and dictatorships followed by invasions) and collapsing civil authority moves apace with monetary and social contractions and are commingled with a loss of stable and uniform valuations, material scarcities, and extreme distributions of wealth.
But on these later rounds, no reformers arrive to save the day. In fact, civil authority and government pursue the process of indenture as a last resort to continue to collect land taxes. So, that in turn they can afford to support their military needs independent (or parasitic) of economic production. As this system breaks down, land title in lieu of money becomes the pay of imperial solders. Ironically, these lands were often the same ones that the non-latin mercenary recruits came from, and then subdued for Rome. The plight of extant free tenants was grim.
"... henceforth the coloni were required, in return for the protection and patronage received, to surrender their liberty of movement and to remain permanently attached to the latifundium. Their new status of serfdom was in some cases fastened upon them by a formal contract, and it everywhere acquired validity by the connivance of the government. In recognizing the institution of tied labour for free persons the Roman government was acting against its own tradition. But--to say nothing of the fact that not a few of the higher officials themselves possessed latifundia and went hand-in-glove with the other larger landowners--the emperors themselves capitulated to the plea of landlords, that without an assured supply of labour they could not answer for the cultivation of their estates and the payment of the land-tax due from them. Since the fast-diminishing supply of slaves was now no longer adequate to the needs of the latifundia, the Roman government had no ready answer to the arguments of the landowners. The institution of serfdom accordingly acquired a legal title through unchallenged usage; by the time of Constantine it was being expressly recognized in imperial legislation."
To maintain some viable industry and commerce in cities, a similar oppressive system is followed:
"By a parallel process industrial and commercial serfdom were introduced into the Roman empire at the government's own initiative. With the view to better provisionment of Rome, Alexander Severus had converted all the services which supplied the capital into monopolies (p. 716). But amid the growing disintegration of manufactures and trade even these privileged associations began to fall to pieces. Later emperors therefore made an attempt to keep up their membership by converting them to hereditary castes. In the fourth century a miller or a shipper was obliged by law to remain at his business for his lifetime and to train his sons to the same occupation."
Subsequent to Constantine, in the West, imperial bureaucracy is passed to religious authorities, were prelates and magistrates become bishops who are appointed by estate holding oligarchs. These appointments are often taken from the oligarchy itself to remove the appointees from inheritance and stop the partitioning of estates between male heirs. As the estates become larger and self sustaining independent units, economic ties to cities and towns amount to extra ordinary and ancillary commerce.
And so the curtain falls in the western empire, waiting for Augustine to add the insults of original sin and free will to the injuries of civil collapse and mass serfdom.
Chuck Grimes