Money Before Coinage

Money long predates the use of coins, and even writing probably originated in the need to keep records of social obligations.

Archaeological research at the 10,000 BC Gobekli Tepe site in Turkey, and at later sites throughout the Middle East, suggests that ancient cities and monuments were not constructed by slave labour but as vast communal efforts. Labour on such a scale was hard to come by, and had to be attracted by extended feasts held at times judged propitious by the solar and lunar calendars. From about 2000 BC, the focus shifted from temples to palaces, and from free, community efforts to corvée labour. So grew the need for proper records, both of the calendars and social obligations of workmen, the latter generating our sense of money. {1}

Mesopotamia

Mesopotamia saw the rise of the first city-states, whose organisation has arguably set the pattern for today's ordered community life and its stress on production. Partially sedentary societies go back to 12,000 B.C., and were strengthened by the domestication of animals around 9,000 B.C., and the growth of agricultural villages around 5,000 B.C. Contrary to textbook theory, the change from egalitarian hunter-gatherer communities to Mesopotamian hierarchical city life was not in response to scarcity, however, but the opposite: the surrounding areas were rich wet-lands teeming with plants and animal life. City growth was very probably gradual, therefore, and intermittent, with many cities periodically reverting to healthier, village-based communities. Indeed the walls surrounding Mesopotamian cities may not only have kept marauding foreigners out but its toiling inhabitants in, corralling them into labour-intensive and closely-regulated agricultural work. Nor were the consequences — diversity of employment, armies, slavery and taxation — immediately beneficial. Domesticated animals and plants were inherently less healthy than wild strains; cities became breeding grounds for disease; the concentrations of wealth led to concentrations of power, and thus to embryonic social engineering, conscription, statute-based justice, wholesale bureaucracy and taxation. Nonetheless, the rise of civilisation may well have come with a growing dependence on monocultures feeding expanding populations, i.e. on grain that had to be sown, harvested, stored and fairly distributed. In that process, by domesticating their food supplies, early city dwellers also domesticated themselves. Practical needs locked city dwellers into patterns of organisation that would later become even more specialized, each in turn being justified by tradition, cultural beliefs and social inheritance. {2}

In the Mesopotamian empires of the third millennium BC, social obligations were recorded in temple archives according to a standard unit of value (generally the silver shekel) but these accounts were not transferable, and were periodically annulled when thought too onerous or unlikely to be repaid. The priesthood mediated the obligations of society to the gods, and those obligations needed to be both recorded (therefore measured and counted) and be adjusted to social standing (tokenised, so that different activities could be included under a common measure). At this juncture may have arisen the connection between such tallies of goods and services and the symbols of sovereignty and priesthood, i.e. gold and silver. Precious metal tokens are found among tomb goods from 3000 BC, and gold coins, when they eventually appeared, in Greece around 600 BC, may have been more status symbols of power and prestige than a means of payment. They were certainly stored in temples. {3-6}

Mesopotamian farmer-temple debts were personal, it should be noted, and could not be transferred to third parties. Nor did the silver circulate. Beyond what was loaned for purchases or trade (see below) it remained locked in the temple treasury. The loan was commonly paid back in various ways, not necessarily in silver, but in some twelve to twenty designated commodities, which were therefore 'monetised' — i.e. their value was assessed against the silver shekel standard. {4} A banking system also existed, at least in embryo. Commercial loans were made to merchants trading beyond the city state, which again attracted interest, and probably compound interest for late settlements. These records, tablets sealed inside clay envelopes (bullae), could be traded to third parties. Unlike personal loans to farmers in difficulty, however, these commercially loans were not periodically annulled. Nonetheless, there was no coinage as such, nor a need for one. Coins widely circulating would have weakened the bureaucracy by allowing private arrangements to evade or contest State control. {7} In general, lending was limited, operated at rates high by modern standards, and was only occasionally farmed out to powerful families. Nonetheless, it was an encroachment on the earlier patterns of 'primitive' societies, and one which, by combining with the warfare of competing Greek city states, eventually made coinage necessary.

Egypt

As in Mesopotamia, Egypt under the Pharaohs maintained state warehouses that stored excess grain and provided relief in times of emergency or hardship. By Ptolemaic times (i.e. well into the use of coinage), the earlier warehouses had been converted into a highly sophisticated system that linked both private and royal warehouses and used detailed accounts in making transfers. Grain harvests were noted, stored by year in local granaries, and records kept in Alexandria. Seed corn was under the control of the state. Grain may have served as money in a system that combined the immemorial Egyptian practices with those of the Greek private household, but the world's first giro system was exceptionally smooth-running and provided many of today's banking facilities without coins changing hands. {5}

In both countries, the earlier festivals by which the great temples and monuments were built in the Middle East, had given way to corvée labour, a voluntary, in-kind substitute for taxation based around solar or lunar calendars — again requiring writing and scribes to keep proper records. Finance enters obliquely, as citizenship, landownership and a rank in the law-enforcing army became interlinked. Only the rich, able to live off their land, had independence, and continual warfare often lay behind democracy, that battle between the landless and their creditors.{8}

Medieval Examples

Even countries supplying the great bulk of European gold before new world sources became available functioned perfectly well without minting their own coins. The west African states were rich, well-governed and for long centuries controlled a vast area of the desert and savannah lands of Saharan and sub-Saharan Africa, employing largely gold dust, foreign coinage or barter for their large trade in slaves, ivory and gold that were important to the Islamic and Christian worlds. By the earliest centuries of the Christian era there existed small kingdoms in west Africa that could smelt iron ores, fashion metal tools to improve agriculture, and create sizeable towns with an ordered administration. By 300 AD, the kingdom of Ghana had known forty kings, who ruled communities based on agriculture and the mining of gold and iron ores, so creating products that were traded with Berber people north of the Sahara. Smaller kingdoms were gradually assimilated by the 1230-1300 Mali empire of the Mande peoples, which converted to Islam in the 1500s and was then succeeded by the equally extensive Songhai empire of the 15th and 16th centuries. {9-12}

From 400 to 1500 AD, west Africa supplied much of the old world's gold from shallow veins, reefs and alluvial deposits amenable to extraction with simple techniques. The Mali empire largely controlled that gold supply, and came to rule an area comfortably larger than Europe. Indeed, the Moroccan traveller ibn Battuta descanted on its prosperity, and when its emperor Mansa Musa visited Cairo in 1324, he came with 60,000 followers and 200 camels laden with such gold, food and other goods that the gold price in Cairo remained depressed for the following twelve years. The Mali Empire flourished on trade, taxing every commodity that entered its territories. It also had three large gold mines — Bambuk, Boure and Galam — within its borders, becoming the old world's major source of gold by the early 14th century. The empire struck no coins of its own, but used gold dust and foreign coins in ways that differed between regions. Many Saharan and Sahelian towns became important staging posts: Taghaza for salt, Takedda for copper, and both for slaves. Cities of Mali became not only important trading centres, but centres of wealth, culture, and learning. {14-17}

Mali is known to us from accounts given by: Shihab al-Din ibn Fadl Allah al-'Umari, Shams al-Din Abu Abd'Allah ibn Battuta, and Abu Zayd Abd-al-Rahman ibn Khaldun. Timbuktu was adorned with libraries and Islamic universities, and many of these flourishing cities became meeting places for poets, scholars, and artists. Gold-financed armies extended territorial conquests, but the rulers also introduced agricultural reforms. Succession was often by coups and revolts, however, and when, for example, Mari Djata adopted his general's sons, those sons waged a devastating war against each other.

The succeeding Songhai settled on the middle Niger River, and under their Sonni kings unified a large part of the western Sudan. Islam was introduced into the royal court of Songhai in 1019 but most remained faithful to their tribal beliefs. At their capital at Gao, the Songhai developed a market place where kola nuts, gold, ivory, slaves, spices, palm oil and precious woods were traded for salt, cloth, arms, horses and copper. Sonni Ali equipped the empire with a fleet on the Niger River, and a large army of some 10,000 cavalry and 30,000 foot soldiers, which effected the capture of Timbuktu and Jenne. {8-11}

The Sonni were in turn driven from power by the Muslim Askiya dynasty, where kingship was accompanied by absolute and sacred power. Rulers, who could only be approached in a prostrate attitude, sat on a raised platform surrounded by hundreds of eunuchs. Taxes were paid for internal and external security. The royal court was responsible for administration and the army, but large estates also belonged to nobles, where local peoples grew agricultural products, fished, and raised animals for meat, milk and skins. Many kingdoms continued to flourish after the fall of the Songhai: the Benin in Nigeria, Ashanti in present day Ghana and Dahomey, north of Benin. The west African kingdoms relied on slaves for heavy manual work, and Askia Mohammed turned those slaves into soldiers personally loyal to the ruler. Another group of slaves, the Arbi, became potters, woodworkers, and musicians serving the palace, and slaves also worked on village farms producing food for a growing urban population. {9-12}

The Ashante kingdom of the 15th and 16th centuries also used slaves in their rich gold mines, trading for them with the Portuguese, who purchased these slaves from the kingdom of Benin. The trade continued to the early 1700s, and brought prosperity to Ashante, enabling the kingdom to shift from small to large scale agriculture. The Benin also supplied slaves to work the sugar plantations of Brazil, and the increasing power of the Ashante and Dahomey kingdoms allowed them to raid societies like the Bambara, Mende, and Fulanis for slaves. When the Benin kingdom finally abolished slavery, the Portuguese were forced to go elsewhere, and were supplanted by the Dutch and then English traders. The supplying kingdoms were initially too strong to permit colonisation, however, and the trade in slaves, ivory, rubber and gold remained under the control of Asante, Fon, and Kongo kingdoms. {14-17}

Though the British government abolished the slave trade in 1807, the measures were slow to take effect, and the west African kingdoms retained their slaves to work plantations producing palm oil, rubber, and cocoa for the growing European markets. Ironically, slavery finally ceased when these kingdoms were colonized towards the end of the 19th century by the French and British, and the former slaves became the landless lower classes. Nonetheless, it was European powers, with their genius for organization, that turned local injustice to national exploitation in their need for cheap labour in the sugar and cotton plantations of Brazil, the Caribbean and the American colonies. Portugal transported over 4.5 million Africans before 1700. Britain in the following century transported almost 2.5 million of the 6 million slaves taken from Africa. Conditions were horrendous, and many perished on the journey from the poor food, lack of medical attention and the cramped and unsanitary conditions. In time the Europeans also gained access across the Sahara and through the Senegal and Gambia Rivers, trading copper ware, cloth, tools, wine and horses and later guns, in exchange for gold, pepper, slaves, and ivory. Guns indeed became increasingly needed for west African professional armies, and the British were selling up to 100,000 muskets a year. {9-12}

African Gold and Trade Routes

Gold occurs in reefs and veins in the Precambrian basement of west Africa, and as alluvial deposits. {13} Shallow vein and reef deposits were worked as they still are in village communities today, by small pits dug into the soft, well-weathered bedrock. The veins are small, discontinuous but locally rich. Alluvial deposits derive from the vein and reef deposits, and form screes of weathered material, the gold being washed out and gravity-sorted in stream and river gravels. Small deposits were worked by panning, the larger ones by diverting river waters into sluices and washing tables. The simple technology, primitive but effective, has now been overtaken by modern mines and dredges.

Most west African gold in antiquity came from alluvial deposits in what is now Ghana (from the 8th century), Niger (in the 12th century) and Mali (thereafter). {14} The Phoenicians and Carthaginians obtained their gold by a maritime route, but the Romans and medieval Islamic states used trans-Saharan routes that also carried salt and slaves. The routes depended on the political stability of the areas passed, and on water supplies, the latter shifting with climatic changes. Berber tribes controlled the area in the 4th-8th centuries. In the 750-1150 AD period the two trade routes were firstly north to Fez and Islamic Spain, and secondly northeast to Kairouan, Tunis and Palermo. Around 850-950 AD, when the climate grew wetter, more water-holes allowed traders to use routes leading to Tripoli and Cairo. When the climate grew drier again, the route through Sijilmasa regained its importance, then being subject to tribal peoples who, unable to live off their pasture lands, resorted to raiding the caravans, which had to pay protection money. Climatic conditions again changed in the 1170-1270 period, and, when the Kingdom of Ghana descended into political turmoil, control passed to the new and larger kingdom of Mali. {15}

Tallies

Until the nineteenth century in England, when large stocks of tallies were destroyed, much business was carried out with wooden tally sticks. Millions were used, and if the system was simple, it was effective, indeed essential when the medieval ban on usury had to be evaded, and coinage was scarce. A strip of wood was notched and split in half, one half being kept by the government and the other by the recipient. Tallies were used to pay taxes, soldiers for military service, farmers for wheat and the poor for labour. A sophisticated market existed by the 13th century, allowing tallies to be bought, sold and discounted. For much of the Middle Ages, tallies may indeed have made up most of the money supply. {16}

Barter

Lest we suppose that barter is a discredited form of trade, rarely practised in western countries, it is worth noting how prevalent were bilateral trade agreements in the years following W.W.II — Russian grain for jet engines, Pepsi-Cola concentrate for Soviet vodka, Iranian oil for German steel plants, British missiles, American port facilities and Japanese desalination facilities. Some degree of barter possibly amounted to 40% of trade in the 1980s. {17} Bilateral trade agreements are even more extensive today, {18} as are counter-trade and counter-purchase. {19}