Money (9 page)

The effects of these new technologies on Greek culture were momentous.
⁴
The century after 650
BC
witnessed an unprecedented intellectual revolution—an emancipation of thought by the new ability to quantify, to record, to reflect, and to criticise what was written.
⁵
The revolution began in the East, in the city of Miletus, the commercial capital of the Ionian seaboard of Asia Minor. There, in 585
BC
the philosopher Thales correctly predicted a solar eclipse—a feat which astonished the Greek world. What was truly remarkable about it, however, was not the prediction itself; the astronomy required for such analysis had been understood in Egypt and Mesopotamia for centuries. It was the new, scientific method by which Thales arrived at it—and the new worldview on which it rested. Thales rejected the idea of a subjective world ruled by the whims of anthropomorphic gods who needed to be personally appeased with ritual or magic. In its place he installed for the first time the idea of a universe governed by impersonal, natural laws, and its equally revolutionary corollary—the idea of the individual observer separate from the objective, physical phenomena under scrutiny.

The power of this new perspective resonated throughout the subsequent century. Under the old worldview, the universe consisted simply of what one could see: even gods and goddesses, it was believed, resided in the physical world. Under the new dispensation, there was a metaphysical realm too: the realm of the natural laws that govern the visible world—an ultimate reality, beyond appearance. It was a revolution in man’s understanding of the physical universe: nothing less than “the emergence of abstract rational thought, of philosophy and scientific theory in a form still recognizable to modern practitioners.”
⁶
Precisely because of its extreme backwardness relative to the ancient civilisations of Mesopotamia and Egypt, it was in the Greek
Aegean, and within only decades of the transition from an entirely illiterate culture, that the modern scientific worldview was invented.

But it was not only man’s understanding of the physical universe that the fertile encounter between the sophisticated East and the primitive West revolutionised: it profoundly changed his understanding of the social world as well. The organisation of society on earth was traditionally conceived of as the mirror image of the divine household in the heavens above. But if the idea of a subjective universe ruled by capricious gods had been displaced by the scientific notion of an objective reality governed by impersonal laws, then must not the old understanding of society be superseded too? Must not the principle of analogy carry through: was there not such a thing as society, separate from the self—an objective social reality, the counterpart of the objective physical reality, and one also governed by impersonal laws?

The idea was irresistible—and remains so today. But it begged a question. The new perspective on the physical universe postulated some fundamental substance of which the physical universe was really made and in terms of which its laws were formulated. Whether it was Heraclitus’ fire or Pythagoras’ number, there had to be something of which the reality behind the appearance was constituted—the ancient equivalent of the concept of energy that is the basic building block of today’s theoretical physics. The new vision of society required some analogous concept in terms of which the basic structure of the objective social reality could be described and understood by the scientific mind. But what could it be? And why, in posing this question, was the primitive culture of the Greeks breaking ground which the supremely advanced civilisations of Mesopotamia had not explored?

The answer is that in this new understanding of society and the economy, as in the new science of the natural world, the ironies of historical progress were again strongly in evidence. It was because, rather than in spite, of its relative backwardness that Greek civilisation stood on the brink of a fundamental intellectual revolution. For Greece had one idea that Mesopotamia lacked: a concept that could
answer the requirement of the new understanding of society for a single, universal, abstract substance in terms of which the objective social reality could be understood. It had, hidden amidst its barbarous and primitive cultural forms, one glittering prize: a nascent idea of universally applicable value.

The sophisticated Mesopotamian apparatus of accounting and forward planning did not operate without notions of value, of course. Though in the early stages of their evolution it had operated with plans expressed only in physical units, the temple bureaucracies later developed units of abstract value with which to allocate resources between different classes of inputs and outputs. But these units were designed for deployment only in specific sectors and as part of the planning process: because of the sophistication of the system of bureaucratic control itself, there was no need for a universal unit of value which could be applied more generally and outside of the administrative hierarchy. As the medieval peasant had limited-purpose units of length, each ideally suited to its particular task—his ells, fathoms, and feet—so the temple bureaucrats had limited-purpose concepts of value and corresponding accounting units: “[d]epending on the economic sector, the means of comparison or the measure of standardized norms and duties could be silver, barley, or fish, or ‘laborer-days,’ that is, the product of the number of workers multiplied by the number of days that they worked.”
⁷

When the ancient Mesopotamian technologies of literacy, numeracy, and accounting came into contact with the primitive, tribal institutions of Greece, they were transplanted into a wholly different environment. And one of those institutions—the ritual of sacrificial distribution—contained the germ of a quite different concept of value. The ritual of the sacrificial feast consisted of the ceremonial killing of the victim, the burning of its entrails as an offering to the gods, and the roasting and distribution of its meat to the congregation. All male members of the tribe participated, and the shares distributed were equal—for this was an ancient ritual, the purpose of which was to express, to rehearse, and to ensure understanding of, the communality of the tribe. Like gift exchange, it was a ritual based on reciprocity—but the reciprocity here was
between the individual and the tribe: the individual was reaffirmed as an equal member of the tribe and as having an equal obligation to ensure its survival. The most basic ideas at work are so fundamental, and so familiar to us today, that they are easy to miss. But they were ideas completely alien to the hierarchical cosmology and caste society of Mesopotamia. They were the concept of social value—the property that every male member of the tribe enjoyed by virtue of being part of the community—and the notion that on this measure, every member counted equally.

For as long as these ideas remained in their original context of the tribal ritual of sacrificial distribution, they remained nothing more than a relic of barbarism. But when mixed with the new technologies from the East and the new perspective on the world which they provoked, the catalysis was volcanic. For the notion of social value was an atomic concept in terms of which an objective social reality could be construed. And the idea of the equal worth of every member of the tribe was a social constant: a standard against which social value could be measured. At the heart of Greek society, in other words, was nothing other than a nascent concept of universal value and a standard against which to measure it, prêt-à-porter. Here was an answer to the question begged by the new perspective on society and the economy. Where the new understanding of physical reality had man, the observer of an objective universe, the new understanding of the social reality had the idea of the self, separate from society—an objective entity consisting of relationships measurable in a standard unit on the universal scale of economic value. It was a critical conceptual development—the missing link, on the intellectual level, in the invention of money.
⁸

Mesopotamia had for millennia possessed one of the three components of money—a system of accounting, based upon its discoveries of writing and numeracy. But the immense sophistication of Mesopotamia’s bureaucratic, command economy had no need of any universal concept of economic value. It required and had perfected a variety of limited-purpose concepts of value, each with its respective standard. It therefore did not develop the first component of money: a unit of abstract, universally applicable,
economic value. Dark Age Greece, on the other hand, had a primitive concept of universal value and a standard by which to measure it. But the Greek Dark Ages knew neither literacy nor numeracy—let alone a system of accounting. They had, in nascent form, the first component of money, but lacked the second. Neither civilisation had all the ingredients for money on its own. But when the ultra-modern technologies of the East—literacy, numeracy, and accounting—were combined with the idea of a universal scale of value incubated in the barbaric West, the conceptual preconditions for money were at last in place.

Athenian youths leading bulls to sacrifice, from the North frieze of the Parthenon: the most famous of all representations of one of Greek civilisation’s central rituals.

(
illustration credit 3.1
)

It did not take long for these preconditions to produce practical results. The notion of a single, universally applicable concept of
value evolved in the context of a political institution—the ritual of the sacrificial distribution—and it was in other social, religious, and legal contexts that it first began to be applied more widely. What had since time immemorial been ritual obligations, the relative worth of which it would not have crossed anyone’s mind to compare, began to be assessed in terms of the new measure of value—the monetary unit. Already in the early sixth century
BC
, inscriptions recording religious dedications at the temple of Hera on the island of Samos—the greatest Greek religious foundation of its day—had begun to proclaim their monetary value.
⁹
At Athens at around the same time, the rewards granted by the state to victors at the pan-Hellenic athletic competitions began to be prescribed in monetary terms—100 drachmas for a champion at the Isthmian Games; 500 drachmas for a champion at the Olympics.
¹⁰
Nor was the ingenious new concept of universal economic value colonising only official estimations of worth—it was catching on with private individuals as well. A quaint inscription on a metal belt from around 500
BC
boasts that the fee its owner was paid for a contract as a public scribe was the tidy sum of 20 drachmas.
¹¹

This spread of money’s first two components—the idea of a universally applicable unit of value and the practice of keeping accounts in it—reinforced the development of the third: the principle of decentralised negotiability. The new idea of universal economic value made possible the offsetting of obligations without reference to a centralised authority. And the new idea of an objective economic space created the confidence that this possibility would exist indefinitely. Markets require people to be able to negotiate a sale or agree a wage on their own, instead of feeding their preferences into a central authority in order to receive back a directive on how to act. But successful negotiation requires a common language—a shared idea of what words mean. For markets to function there needs to be a shared concept of value and standardised units in which to measure it. Not a shared idea of what particular goods or services are worth—that is where the haggling comes in—but a shared unit of economic value so that the haggling can take place at all. Without general agreement on what a dollar is, we could no more haggle in
the marketplace over prices in dollars than we can talk to the birds and the bees.

Now money was opening up a still more radical horizon: traditional social obligations could not only be valued on a universal scale, but transferred from one person to another. The miracle of money had an equally miraculous twin—the miracle of the market.
¹²
And with the invention of coinage, a dream technology for recording and transferring monetary obligations from one person to another was born. The earliest known coins were minted in Lydia and Ionia, in present-day Turkey, in the early sixth century
BC.
But it was the city states of the Greek Aegean that seized upon coinage as the ideal means of representing the new concept of economic value, starting in the late sixth century
BC.
Its spread throughout the Greek world thereafter was rapid and pervasive: by around 480
BC
, there were nearly a hundred mints operating in the Greek world.
¹³

The result was a further acceleration in the pace of monetisation. Everywhere, traditional social obligations were transformed into financial relationships. In Athens, traditional agricultural sharecroppers were converted into contractual tenants paying money rents. The so-called “liturgies”—the ancient, civic obligations of the thousand wealthiest inhabitants of the city to provide public services ranging from choruses for the theatre to ships for the navy—were now assessed in financial terms. By the last quarter of the fifth century
BC
, “not only military stipends, public and private wages, rents and commodity prices, but also social payments such as dowries … regularly appear as sums of cash.”
¹⁴
The city states of classical Greece had become the first monetary societies.