The advent of Money
In compiling this history of the world, one of the main themes is money. Money gives you choice and choice is something that transforms not only economics in the world, but also, more importantly, in our everyday lives. Money enables us to live independently: money gives us freedom – or perhaps rather an enhanced degree of freedom. In saying that money gives us freedom I am not dealing with absolutes – freedom is a relative term. I like to say that the difference is between being one third free and two thirds free. The most miserable serf is at least one third free in choosing how to live his life. On the other hand even the most free person, is constrained by laws and customs, by his friends and neighbours and by the society in which he lives; but it is money that gives an enhanced choice, so we can to a large extent decide where to live, how to earn one’s living, how to arrange one’s life, and how to enjoy oneself. And this enhanced degree of choice also provides a new way of thinking.
In particular, money leads to democracy. Money provides an enormous increase in choice economically, and this desire for more choice spreads over into politics. Modern politicians often make the mistake when dealing with third world countries of thinking that if democracy is introduced, then the rest will follow. This is rarely true. If democracy is imposed when the social and economic substructure does not exist, all too often a dictator, or single ruling party succeeds in grabbing power. And if the dictator or the governing party also owns the commanding heights of the economy – if that is what I call the palace economy still subsists – if the dictator and his brothers and his cousins and his aunts still own the oil and the electricity and the industry – then they will be most reluctant to give it up. And what is more, the economy will operate by taking their instructions from the top rather than seeking to follow the dictates of the marketplace and the choices made by their customers. Democracy will never work unless you first get the infrastructure right: get the market established, where the customer is king; get the rule of law firmly established, and then it is possible to establish a firm democracy (though see China)
In Greece that we can see this happen, both where the infrastructure is right, as in Athens, and where the infrastructure is wrong, as in Sparta. In Athens the social structure and the economics were ripe for the introduction of money, and democracy followed rapidly within 20 or 30 years. In Sparta as we shall see the social structure was all wrong so money was rejected and so was democracy. If we follow the pattern of what happened in ancient Greece, we may perhaps begin to understand better what is happening and what should happen in the world today.
When I first began putting these ideas together, I felt very much a voice crying in the wilderness, but over the last twenty years money, has become a matter of discussion, and it has become more widely accepted that Greece and Rome were indeed money societies and functioning market economies. The revolution was begun by Moses Finley who pointed out that Homer depicted a society that had many of the features of the barbarian societies being revealed by anthropologists, though he never really accepted the changes that took place in 6th and 5th centuries with the adoption of money. Since then other scholars have taken up an interest in money notably David Schaps, Walter Scheidel, and Sitta von Reden, while Richard Seaford has gone furthest of all in claiming that the early pre-Socratic philosophers depended for their advances on the new world of money. None of them, it is true, appear to have immersed themselves in the works of the recent monetarists/economists – the study by Milton Friedman of the Monetary History of America, or Friedrich Hayek on the Constitution of Liberty; the names of Friedman and Hayek do not appear in their bibliographies. But a new wind is blowing through the groves of Academy.
The pre-money economies
But how was money was first invented? Inevitably we must begin with Homer, that is Greece before money, but the first point to make is that the economics of Homer are very different from the economics of Mycenaean Greece. The economics revealed by the Minoan Linear B tablets show a palace economy similar to that prevalent in the palace economies of the Near East, based on redistribution. Admittedly, in the tablets there is little evidence of actual redistribution – it is a one-way traffic with records of goods – sheep and olive oil going in, but no records as to how the wealth was spent. Presumably there was a mixture where some may have been recycled to the people who produced it, a lot went on the palace and temple expenditures, and a lot went on the wealthy goods for display, some of which survive in the fabulous grave goods discovered in some of the great chamber tombs.
Homer displays a very different world, with no evidence for the gathering in of tribute – after all, the Iliad is set in the camp of an army besieging Troy. But there is a lot of evidence for the lavish display and exchange of goods – and hints of the valuation of goods. In a famous occasion, two warriors Glaucus and Diomedes, instead of fighting each other, realise that they are old pals and so exchange armour. But Glaucus did not have his wits about him and exchanged golden armour worth 100 oxen for bronze armour worth only nine oxen: and it is interesting that oxen are used as a statement of value. Similarly when King Agamemnon was trying to appease his greatest warrior Achilles, he offered him lavish gifts – 7 tripods never touched by the flames, 10 talents of gold, 20 cauldrons, and 12 horses who could win races and therefore bring him in lots of gold: in addition 7 Lesbian ladies – already the ladies of Lesbos were recognised as being the most beautiful of all – and also when Troy was finally sacked, he could take the 20 prettiest Trojan women, one of his own daughters without having to pay bride price, and 7 well-appointed cities. It was a lavish attempt at gift giving, but it is interesting to note what is valued – tripods, cauldrons – and girls.
Silver as exchange
In the 8th century, all this began to change. Silver began to be used as a medium of exchange and it was weighed out exactly. Hints of this can be seen in the laws introduced by Solon in as much as these can be reconstructed. Thus a fine of 100 drachma was imposed on the archons (ruling councillors) who failed to turn up to the assembly, while the naval officials were required to pay out given sums of naval silver. However the earliest Athenian money does not come in until a generation after Solon, so this must refer to the weighing out of silver.
Chopped up pieces of silver are also found, known as Hacksilber which is a Viking term because in Viking hoards, silver, often Roman bowls, are found chopped up and used for their bullion value; similar lumps of silver are found in archaic Greece. Eventually some of this silver begins to be stamped as a sign of its purity and its weight. Money begins.
Another interesting form of proto-money consisted in the use of iron currency bars or spits. These were comparatively small and a handful of them was known as the drachma – the Greek for a handful, or so the etymology has been thought to suggest. But these iron spits soon went out of use. Herodotus (2,135) records the nice story of the courtesan Rhodopis who went to Egypt and plied her trade so successfully that she became rich, and on her return to Greece she vowed to dedicate a tenth of her wealth to the temple at Delphi, where, said Herodotus it can still be seen – in the form of iron spits. Herodotus is clearly puzzled, for already by his time the knowledge of iron spits had vanished and he could not understand why she had converted her treasure into iron spits. But her treasure was in the form of iron spits!
Money invented in Lydia
Money was in fact invented, or at least first used, not in Greece itself but in Lydia, a small kingdom in Anatolia (Turkey) which was one of the outposts of the Greek world until it was swallowed up by the Persian Empire. The great king of Lydia was Croesus who was reckoned to be very wealthy – the phrase ‘rich as Croesus’ is still in use today, at least among those who wish to show off our classical learning. Croesus is one of the great characters in Herodotus, who tells the story of how Solon the Athenian visited the court of Croesus who asked him who was the happiest man on earth. Solon produced three names, all of them dead, so Croesus asked, “Why am I not included?” and Solon replied with his immortal words “Call no man happy until he is dead”.
Money in the form of stamping a glob of silver with an image – in the case of Lydia a lion’s head – may have been invented by Croesus’ father Alyattes (619 – 560 BC) who established the Kingdom of Lydia, but it was Croesus who increased the amount. This earliest money is not made of gold or silver but of electrum which is an alloy of gold and silver which occurs naturally in the mountains of Lydia. This electrum coinage really got going under Croesus who reigned from 560-546 BC when he was defeated by Cyrus and the Persians, and Lydia became part of the Persian Empire. According to Herodotus, Croesus was put on a pyre and was about to be burned when Cyrus had second thoughts and pardoned him. Croesus then saw the truth of Solon’s words “Call no man happy until he is dead”.
The crucial dating for the earliest coin is found in the excavations carried out from 1904-05 on the Great Temple of Ephesus, which had burned down and was rebuilt in the mid-6th century with the help of Croesus. In the foundations under the new temple, 93 coins were found which must all be dated to the time of Croesus or a little before. The start of coinage is therefore dated to just before the reign of Croesus, say 560 – 550 BC. Thereafter coinage, or the habit of stamping lumps of gold or silver, spread rapidly around the Greek world. At first the various cities did not know how to stamp their coins – the island of Thasos produced a series showing a satyr raping a nymph: it has been suggested that the intention was to promote the local wine.
Athens soon joined in. The earliest coins were the Wappenmunze stamped with a heraldic sign, but they soon adopted what became the great Athenian symbol of the owl, the bird of wisdom and also the bird associated with their patron goddess Athene. The Athenian coinage was also helped by the discovery of a new vein of silver in the mines at Laurion, a hillside not far from Athens, which meant that throughout the first half of the fifth century Athenian coins increased so much in number that they became the dominant coinage of the Greek world. The one town that did not adopt coins was Sparta which must have done so quite deliberately – but that is another story.
But – and say this very quietly – coinage was not introduced by a democratic Athens but when it was under the control of a tyrant, Peisistratos. Peisistratos had a chequered career. He established himself as a tyrant on three successive occasions beginning in 561 BC and was twice driven out, but on each occasion, things went badly, so he was able to make his return as a tyrant. But Peisistatos was generally a good thing: according to Herodotus he ruled fairly and well. He was a populist whose support came from the poorest section of the community as against the aristocrats. He beautified Athens and established the great Panathenaic Games, and more usefully he laid down the sewers for Athens. (I always remember visiting Athens and going on their new Metro system and seeing a display of some of the objects that had been excavated while building the metro stations; and there in the centre was a large pipe bearing the name of Peisistatos). He died in 528/7 BC but his sons Hippias and Hippocrates were less successful. A plot to assassinate them was only half efficacious, as only Hippocrates was killed, though the assassins Harmodios and Aristogeiton were later honoured as tyrant slayers. Hippias limped on, ruling by himself and becoming ever more unpopular until in 510 BC he was ousted with the help of the Spartans. His expulsion led the way to the introduction of Athenian democracy under Cleisthenes.
The concept of democracy had been around for some time – but it is under Cleisthenes that it received its best known form and we need to consider it in some detail. As any anthropologist will tell you, one of the big differences with primitive societies is that they are kinship based, and one of the key reforms of Cleisthenes was to break-up the kinship basis of Athenian society. Hitherto the great families had considerable power and influence. If someone wanted to make himself a tyrant he could always rely on family support. Cleisthenes himself came from the poshest family of all – the Alcmaeonids, but he was determined to break the power of the old families and he reorganised the social structure which previously had been based on four tribes with a family basis.
He reorganised the state into ten new tribes on a geographical basis, depending on where you lived and your name was given as being a member of your new tribe rather than being the son of your father. In practice the new naming system went off at half cock and people never quite gave up their patronymic. Thus the great historian Thucydides who should have become Thucydides of Halimous, tended to be called Thucydides son of Alorus. But the new tribes were given the names of mythical heroes, whose statues were carved on a prominent base in the marketplace. The new system successfully broke up the influence of the great families.
The new constitution
In the new constitution, major decisions were made in the general assembly which met once a month on a low hill, known as the pnyx, where 5 or 6,000 people could assemble. There were probably at least 20,000 and maybe as many as 50,000 citizens, and all had the right to vote in the assembly. However not all could attend – they had their farms to look after – but when the assembly met, a quorum of 6,000 was called for.
In practice however much of the work was done by the boule, or council. The council was chosen annually by lot – and the Greeks believed that choosing people by lot was the basis of democracy. This somehow is an anathema to modern political theorists but was considered to be one of the hallmarks of democracy, as indeed it was in Venice where the Doge was chosen in a long procedure which included the lottery in several stages.
The council was made up of 500 citizens, 50 chosen by lot from each of the 10 tribes who then served for a year. Within the council there was a steering committee known as a prytany of 50 members, again chosen by lot, who served for 36 days at a time when they were housed and fed in the tholos – the prominent circular building in the agora or market place. One of them was chosen each day to be the president and if you happened to be president on one of the days on which the assembly met, you might find yourself as president of the assembly.
It has been estimated that the average Athenian would expect to serve on the council once or twice in his lifetime and there was one chance in ten that when he was on the council he would serve as the president. This was real democracy in practice. Of course some things are too important to be left to the chance of the lot: generals were elected, ten at a time, one from each tribe. War is too important to be left to chance.
The law courts were also organised on a similar basis. By our standards, the juries were huge: juries in private law suits numbered 200 and for public law suits 501. Again they were elected by lot and later, payment would be introduced of a day’s wages – and all lawsuits had to be settled within a single day. In practice the activities of the law courts and the assemblies tended to overlap and the law court acted as a sort of upper house where the decisions of the assembly could be revised.
Perhaps the biggest oddity was the system of ostracism. The paramount fear of the legislators was the fear of tyranny, and ostracism was invented to avoid this. Once a year, the assembly would vote on whether an ostracism should be held – a quorum of 6,000 was needed. Then two months later the voting took place and you had to write on a potsherd the name of the person you wanted ostracised. The votes were then counted, and whoever had the most votes was banished from Athens for ten years so he could not make himself a tyrant. His property was left intact, there was no other penalty involved and after ten years he could return. The pot sherds were the rough writing paper of the ancient world, they were called ostraca, hence ostracism, and they have occasionally been found in excavations. In one famous hoard found down a well next to the Acropolis, 190 ostraca were found written in fourteen different hands, and all with the name of Themistocles, who was in fact ostracised in 471 BC. Clearly his opponents had prepared a stack of votes for illiterate citizens to vote against him – not unlike the use of postal voting today.
There is a story of Aristides the Just who was asked by an illiterate citizen to scratch his ostracon for him. ‘Whose name shall I put on?’ he asked, ‘ Aristides’ was the reply. ‘Why is that?’ he said, ‘because I am fed up with him being called ‘the Just’. Aristides being a just man, dutifully scratched his own name on the potsherd.
The system was not altogether a success: the first ostracism was not held until 487 BC and the last recorded one was in 416 BC, and between those dates twelve people are recorded to have been ostracised, though of course there may have been others who do not appear in the literature. It was an experiment that was tried and found wanting.
What is democracy?
It is interesting to try to draw up an assessment of Athenian democracy because the assessment of today is very different from the contemporary assessment. Left-wing historians always hold up their hands in horror at the narrow basis for democracy in Athens. Slaves, who may have made up half the population, were of course excluded, and so were foreigners: no immigrants were allowed to vote, and of course there were no women, which removes another half of the remaining population. Still there were probably at least 20,000 people left, which was a much larger electorate than the one-man rule of a tyrant, or perhaps a council of 30 ‘elders’.
Ancient criticism ran on entirely different lines, complaining against the demagogues, the orators who led the common people astray. The classical example was the death of Socrates, mandated by popular vote, – and how stupid can you get if you chose to put to death your greatest philosopher? Indeed over time the Athenians even narrowed the electorate by insisting that the citizens should have Athenian parents on both sides – a restriction that would have removed Cleisthenes whose mother came from Sicyon where her father had been the tyrant. An Athenian might point out that the great achievement of Britain was the Industrial Revolution in 18th and 19th centuries, when Britain was ruled by a very narrow electorate – and very successfully. As Gilbert and Sullivan sang:
“When Wellington thrashed Bonaparte as every child can tell,
The House of Lords throughout the war
Did nothing in particular
And did it very well”.
Indeed, since the adoption of Universal Suffrage the 1920s, it could be said that Britain has gone steadily downhill. America is just as bad as they only abolished slavery in the 1860s after an exceptionally bloody war. One of the purposes of the study of history is to ask the awkward questions as to whether our contemporary practices are out of step, when practices in the past say something very different. Who is right: the classical Athenians, or us?
The interesting thing – to me – is that democracy comes so soon after the introduction of money. At Athens money was introduced in two stages. The first stage, the wappenmunze, appears to have been introduced during the reign of Peisistratus, and the images stamped on the coins may be the crests of the leading families. The second stage was the introduction of the owl cottage which came later – it would be nice to say that it was the coinage of the new democracy – though the dating of this is controversial. But certainly the introduction of coinage was followed almost immediately by the advent of democracy. But in the ensuing century, democracy and money marched side-by-side: Athens became a fully market-based economy and a fully democratic society, and the spirit that animated the one also animated the other. We must now look at the miracle that took place in Athens in the fifth century. But before that, let me strengthen my argument by looking at the city that rejected money and democracy and even more, culture. That city was Sparta.
On to Sparta