A Brief History of Ancient Money

     One of the most valued things in our human existence is money in its various forms.  In order to better understand how we came to exchange paper for houses and cars,a closer look must be taken at the beginnings of this form of trade, which will give us a better perspective of how the current monetary system came about.  As we take a brief walk through the history of money, you be intrigued as to how different civilizations valued different objects, and how those object were in fact traded.  

     One of the first areas of the globe we will look at is the ancient Lydians of Greece, who Herodotus credits in the eighth century B.C. the following, "...The manners and customs of the Lydians do not essentially vary from those of Greece, except in this prostitution of young women.  They are the first people on record who coined gold and silver into money, and traded in retail."  It seems fitting that since prostitution is said to be the oldest profession that money would be recorded first in such a transaction.  While Herodotus is one of the more widely accepted ancient historians, in Jack Weatherford's The History of Money he shed light on a more ancient claim to the beginning of money when he writes, "As early as the end of the third millennium B.C., the people of Mesopotamia began using ingots of precious metals in exchange for goods.  Mesopotamian clay tablets inscribed in cuneiform in 2500 B.C. mention the use of silver as a form of payment."  The first use of precious metals for currency may never  be known, but it is important to look at the best sources of information on the subject that we have to date. 
     The problem many of the early money makers had though was developing a uniformed and standard weight and values for the different precious metals.  According to John Kenneth Galbraith in Money: Whence It Came, Where It Went, "After Alexander the Great the custom was established of depicting the head of the sovereign on the coin, less, it has been suggested, as a guarantee of the weight and fineness of the metal than as a thoughtful gesture by the ruler himself."  This form of currency remained largely unchanged in this part of the world until the 17th and 18th century when bank notes began to appear and be accepted as 'good as gold'.  The next part of the globe we are going to visit was for more primitive in its exchange of goods and its form of currency.

      The ancient Aztec culture was far more brutal and controlling of its currency than other surrounding nations.  Cocoa beans were the coins of this empire and they were sacredly valued and meticulously counted.  What is amazing and disturbing about this economic system is not in the trade of the beans, but in fact what they were traded for.  600 cocoa beans could be traded for a human in which to sacrifice to the God's (which occurred daily with the ripping out of the live victims heart).  According to Jack Weatherford in  The History of Money, "Although the sacrifices sponsored by the merchants ended up on the dining table of a special banquet, most sacrificial victims had a more mercantile end....They disemboweled the corpse and sent the choicest cuts of meat to the tianquiztli, the city market, where they would be sold for chocolate."  So much for the ancient Americans 'painting with the colors of the wind' and being harmony with every living thing.

     Although the Aztec and early American Indian trading and religious system was brutal and archaic, it still was monitored very closely by its government.  Some of the more daring traders would attempt to fill cocoa beans with mud and then pawn them of as real beans, but if the perpetrator was caught it would most likely cost him his life.

     By the time of Christ, many nations had begun to steer away from trading farming goods for services and had adopted the metal form of currency.  This has lasted to a certain extent up to this day, but it has not been without its drawbacks.  In The Wealth of Nations, one of the greatest economic works of all time, Adam Smith wrote about the common custom of merchants and buyers chipping off small pieces of the coins thus damaging their value.  In an effort to stop this practice Kings went to the furthest extent and issued that proclamation that anyone found defacing the currency would be executed, and this largely curtailed the practice.

     Moving into more modern time, the Bank of England charter of 1694 helped promote and spread the use of a new form of currency, paper.  Although its use had been around since the late 13th and early 14th century, people were still widely skeptical of its use.  As we have now entered into the period of modern currency and trade I feel that this is a good place to leave off.  Next we will deal with modern forms of currency such as; credit/debit cards, stocks, greenbacks, and gold etc.



By Jeffrey Brandon Lee