The advent of Money

How did money come to Greece? We have already seen in the previous chapters on the Minoans how the economics of primitive societies were very different. Some of this is reflected in Homer’s Iliad, though this is set in an army camp, where gift exchange tends to be a form of boasting. There is the interesting occasion when Glaucus is about to fight Diomedes but realises they are related, so instead of fighting each other they exchange armour, but he exchanges gold armour worth 100 oxen for bronze armour worth only nine oxen : is this gift exchange boasting or the glimmering of a monetary sense of value?

 Then there is the occasion when Agamemnon is trying to appease his greatest warrior Achilles, and offers him lavish gifts – seven tripods, ten talents of gold, twenty cauldrons, twelve horses who could win races, and seven Lesbian ladies – already the ladies of Lesbos were recognised as being the most beautiful of all. And when Troy was sacked, he could take the 20 prettiest Trojan women – and one of his own daughters without having to pay bride price. It was a lavish attempt at gift giving,  but it is interesting to note what is valued – tripods, cauldrons – and girls.

In the 8^th century, all this began to change. Silver began to be used as a medium of exchange and was weighed out exactly. Chopped-up pieces of silver are also found, used for their bullion value. Eventually some of the silver begins to be stamped as a sign of its purity and its weight.

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 a 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 the iron spits were her treasure!

Money was in fact invented, or at least first used, not in Greece itself but in Lydia, a 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 their 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 volume. 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-6^th century with the help of Croesus. (It is a mile away from the classical Ephesus, which was a new foundation of 292 BC). 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 electrum 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 it was an early advertisement, promoting the local wine.

But what is very surprising is how rapidly money spread once it had been introduced. Robin Osborne has calculated that by 485 BC over 100 cities were issuing coinage. At first, they were lumps of electrum, but during the 6^th century, electrum is replaced by silver. The coins are issued in a variety of weight standards,  some belonging to a regional standard, but some to a very local standard, which suggests that they were not so much for foreign trade but for internal use within the city.

Coins were also minted in fractions of the standard value,  the fractions varying from half a standard value, to an eighth, to a twenty fourth, and even down to a ninety-sixth of the standard value (= stater).  In other words, the coins really were for market transactions  within the local city – just as Aristophanes implies in his comedies. Once money was introduced, its advantage was obvious, and it was taken up very rapidly

On to The Rise of Athens