THE LOVE OF MONEY
650 BC - 450 AD
Money is a crucial part of human life, but where did it come from and what exactly is it? To help find the answer the Road to Riches travelled to one of the few remaining parts of the world where coins, notes and plastic cards have not totally taken over.
Yap, a small island in the Federated States of Micronesia, has a range of ancient currencies still in use. In common with other islands in the Pacific, people use shells and spices, but they have one kind of currency that is totally unique: large discs of limestone.
There are approximately 2,000 across the island. They can only be moved by several men who lift them by placing a pole through the hole in the centre of the stone. Because they are so heavy, most change hands without ever being moved.
Transporting the stones was often extremely dangerous. They were strapped to a bamboo raft and hauled behind boats. Lives were often lost and many stones sank, but even stones at the bottom of the sea still count as legal tender.
No one is entirely sure how long the stone business has been in existence: perhaps as long as the islands have been inhabited by the ancestors of the modern Yapese, at least 1,500 years. The stones are still used for important social purchases: buying land, for dowries and sometimes for making amends after quarrels between villagers.
The stone money tells us that money is whatever people believe it is. It has survived in Yap partly because the island's trading networks were limited. Now the US dollar is used by most Yapese for everyday transactions. It is likely that the stone money will fall into disuse, just as traditional forms of money fell away in the face of world's first standardised form of money 2,600 years ago: the coin.
The earliest coins were minted in Lydia in 650 BC. Lydia was a small kingdom in modern day Turkey, poised on a major trade route between east and west. Excavations of the Lydian capital city of Sardis, and the small stream that ran through it, the Pactolus, have revealed that there was once an abundance of natural gold in the area. The substance, known as electrum, is a mixture of gold and silver. It is likely that coinage came about when lumps of electrum were stamped to guarantee their gold content.
But it was the Greeks who developed coinage into the main form of exchange and payment across the Mediterranean and beyond.
Coins were a useful way of expressing political identity for even the smallest Greek states. They played a particular role in Athens, the first democracy, where small denomination coins were used to pay citizens to participate in government duties such as serving on a jury.
By 300 BC coined money was universal across the Greek world and it had started to permeate the way people thought about society. Comment about money appears amongst the philosophers, playwrights and politicians.
'Wealth', written in 338 BC by Aristophanes, depicts the figure of wealth as a blind old man who gives money to the wrong people.
The political supremacy of Athens and other Greek city states was short-lived. By 334BC, the region was dominated by Alexander the Great. His image appeared on the coins that he spread over hundreds of miles.
But his power was surpassed within a century by that of Rome, whose citizens were to take the love of money to new heights.
The rise and fall of Rome
Rome's initial wealth came from conquest, particularly of the rich East. Looting provided a stream of gold, silver, antiques and slaves to Rome. Once subjugated a new province would be forced to pay taxes in Roman silver, and Roman coins soon became the common currency across the Empire.
Hadrian's Wall, built in 120 AD in England, marked the empire's most northerly point. Its most easterly point was 2,500 miles away in Mesopotamia. At one point goods could be ordered, paid for in Roman currency and safely transported across the whole empire.
Unlike modern coins, ancient coins were always made of precious metals, gold, silver or bronze. But during the 2nd century, emperors started to reduce the amount of silver in each coin to make their money go further.
By 270 AD the denarius, the most common Roman silver coin, contained virtually no silver at all. Eventually, the inevitable happened and prices began to rise. By the end of the century, the emperor Diocletian attempted to restore the precious metal content of both the silver and gold coins. He followed this in 301 AD with an edict setting maximum prices which was to be inscribed on market places throughout the empire. Like the Greeks, he blamed inflation on the greed of market traders.
For a while it was possible to buy off the Barbarians, but in the end the collapse came swiftly. Rome fell in 476 AD after a progressive loss of territory. For much of the former empire, especially Europe, it meant a collapse in prosperity for many centuries.
Further reading on classical Greece and Athens:
General: see the sections on the economy in:
Ancient Greece: a political, social and cultural history. S Pomeroy, et al, Oxford University Press 1999.
The World of Rome: an introduction to Roman Culture eds Peter Jones and Keith Sidwell, Cambridge University Press 1997.
The Oxford Companion to Classical Civilization eds Simon Hornblower and Anthony Spawnforth. Oxford University Press 1998.
The Athenian Agora. Excavations in the Heart of Classical Athens, John M Camp, Thames and Hudson, 1986 (Updated 1998) Thorough and fascinating account of the excavations of ancient Greece's most famous marketplace.
After Marathon, War Society and Money in Fifth Century Greece. Ute Wartenberg Trustees of the British Museum, 1995
The Ancient Economy , Moses Finley, Penguin, 1993. Re-print of one of the most famous analyses of the Greek and Roman economy.
Courtesans and Fishcakes, The Consuming Passions of Classical Athens. James Davidson Fontana Press 1998. How they spent it.. a fascinating account of Greek attitudes towards consumption of luxuries.
Slavery and Society at Rome, Keith Bradley Cambridge University Press 1994
Roman Ostia, Russell Meiggs Oxford University Press 1973
Aristophanes' Plays, including Wealth. Trans. Patric Dickinson, Oxford University Press 1970.
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20.00 hrs 16 July 2000