Socially complex societies need money: Little testimonies form the exciting period before and until the invention of money in 7th century B.C.


The Invention of Money ... since when has money been in existence? How did it develop? You will learn more about it in this short video of 8 minutes.



Hello. My name is Ursula Kampmann, and I am a numismatist. Today, I would like to tell you some facts about the invention of money.


I have brought with me a little testimony from this exciting period. It is an inconspicuous clay tablet. The inscription it bears is nothing spectacular, no elaborate poem or something like that. Rather, it is a list of people receiving grain for their work, a kind of pay roll. The grain on this list, however, is still far away from the money we know.


Since when did people need money after all? Our ancestors, who traveled the wilderness, making their living as hunters and gatherers, surely were in no need of it. Money was still dispensable when, in the Neolithic Period, the first farmers settled down. People only started to think about a universal means of barter when they intended to give goods to people they didn’t consider family. It is a socially complex society that develops the need for money.


And that happened at some point during the third millennium B.C. In Egypt as well as in the Near East, systems had evolved that are referred to as ‘centralized redistribution’ by economists. We can describe it as follows: YOU are turning in everything you generated and I will see what I am inclined to return to you. What sounds like wishful thinking of some present-day governments, was rooted in the third millennium in the belief that the community could only survive thanks to divine help.


Far too big were the dangers imminent: natural disasters, hostile raids. Without the aid of the gods, man felt stranded. The one responsible for maintaining a direct hotline right to the top was a powerful priest-king, like the pharaoh in Egypt or the Sumerian lugal. He was in control of the community’s fate. That was why HE was entitled to receive all money generated by that community. It was left to HIS mercy to redistribute so much to the people as they needed to survive.


Our pay roll dates exactly to that period of time. It states, for example, that a boatman ought to be given roughly 1,500 liters of flour for himself and his family. In order to redistribute fairly, no money was needed, just a standardized weight to make sure that everyone received exactly what he was entitled to. It could have stayed that way – but humans are only human and sometimes they do exactly what the authorities have forbidden.


Since that authority was considered sacrosanct, every violation of its law was regarded a sin that called for atonement to propitiate the gods. Serious crime resulted in a death sentence. A minor misdeed was made up with a determined weight of silver.


When reflecting upon the divine world order, the authority of those days decided to lay other aspects down by law as well. It stated how much interest had to be paid for something borrowed and at what ratio the silver was to be calculated in regard to other products. Grain was as important for the economic history back then as oil and wool. Thus, the first written criminal laws of humankind reflected a world with an already existing economic life where weighed silver was used as currency.


Egypt, too, had a brisk commercial life - albeit one that wasn’t based on silver, but on gold and copper instead. The British Museum keeps a record that is a marvelous illustration of how a sale actually looked like in the second half of the first millennium. It informs us that a keeper with the name Amunmes bought an ox for 50 deben of copper from a worker named Penamun. Of the 50 deben he actually only paid five in copper. The seller received the remaining amount in fat worth 30 deben of copper, oil valued at five deben and cloth worth 10 deben.


Hence, both Egypt and Mesopotamia operated with a currency system that was based on weights which were controlled by a superior authority. The Sumerian shekel and the accompanying mina in particular spread throughout the entire Mediterranean region. The Greeks were accustomed to it since the early first millennium B.C. Greek dealers used precious metal as means of barter because it was durable and easy to transport. Only the supply was something of a problem and this is where the Lydians come in.


The Lydians were a people that originated from central Lydia. Their capital was Sardis in the interior of the country, located 100 or so kilometer linear distance away from Ephesus. Not far from Sardis flows the River Pactolus with its rich gold deposits. Whether it was the Lydians or rather the Greeks who first came up with the idea of the coins, we don’t know for sure. At any rate, objects have been found below the foundation of the Ephesian Temple of Artemis that are the antecedents of what we know as coins today.


The objects are small chunks of electrum. Electrum is an alloy of gold and silver that was artificially created in order to ensure a stable troy weight for every specimen. It is the same uniformity we notice with the weights. Already at the beginning of coinage – which took place at some point during the second half of the 7th century in all probability – there were three different standard weight systems with a distinct difference. The stater was the basis and varied between 12.5 and 17.2 grams, according the individual standard weight system. Fractions were made, down to a 1/96 stater – and that was a tiny little coin with a weight of about 0.1 grams only!


Various images were chosen for these coins. They exhibit geometric patterns and, most of all, animals, the lion in particular which - being the heraldic animal of the Lydian kings - refers back to Lydia.


Was an authority of some kind responsible for issuing these earliest coins? We can’t say. For all we know, it could have been rulers, warlords, merchants or priests. What we don’t know either is the exact reason why these early coins were made in the first place.


Did they serve as a medium of exchange? Did the Lydians use them to pay their soldiers with which they conquered the Turkish west coast? Or were the pieces made to be used as votive for the gods? After all, the biggest treasure consisting of such coins was discovered in the Temple of the Ephesian Artemis!


These early coins raise more questions than they answer. At present, however, the best numismatists all over the world carry out research to find out more.


Anyway, one thing is for sure: while the evolution of our clay tablet to the first coin took more than one and a half millennia, it took only about one century for the coin to become an established means of exchange in the entire Mediterranean region.


That, however, is a topic I will tell you a few facts about some other time.

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