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August 30, 2009
David Warsh, Proprietor

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When Money Was New

In the ongoing reconstruction of twenty-first century finance, ancient Greece may seem an unlikely place to turn to for guidance. Then again, why not? For it was in the little city-states around the Aegean Sea that coined money first appeared in the seventh century B.C., and, in the sixth century, came into widespread use.

The emergence of this first thoroughly-monetized society in history precipitated two further developments for which the Greeks are much better known – “philosophy,” meaning the conception of the cosmos as an impersonal system, and tragedy, or the self divided against kin, nature, the gods themselves.

That’s the story according to Richard Seaford, professor of Greek Literature at the University of Exeter, in England. In Money and the Early Greek Mind: Homer, Philosophy, Tragedy, he argued that the invention of money thus sent shockwaves through Greek culture and down the ages to the present day.

When it appeared in 2004, Seaford’s book was startling and controversial. Specialists had long supposed that alphabetic literacy, not currency, was the great breakthrough in classical Greece – that, everywhere and always, the text was the thing. But Seaford has since won many of his points. Money clearly mattered to the Greeks, in deep and troubling ways.

World Without Limits, an abridgement of Seaford’s presidential address to the Classical Association, in Glasgow, in April, appeared in the Times Literary Supplement in June and brought the argument to a wider audience. He wrote, “What makes the Greeks worth studying is that they are sufficiently like us to be comprehensible but sufficiently unlike us to be worth making the effort to understand.”

And that brought him within hailing distance, at least on this last summer weekend, of the current debate about such arcane matters as clearing houses for derivatives and Tobin taxes on financial transactions.

The world of myth contained talismans, according to Seaford – the Golden Fleece, the bow of Odysseus – but no cash. There is no precious metal money in Homer, and very little reference to trade, except for barter. The main economic transactions are the exchange of gifts and sacrifices to the gods. There is treasure, naturally – gold, iron, bronze – but it is stored, or given away. When Homer needs a measure of value, ordinarily it is cattle.

But surely the Babylonians had money? Silver was plentiful enough in Mesopotamia as bullion, but nothing that could be called currency developed there. The Greek historian Herodotus gave credit (or blame) for the invention of coins to the Lydians. Walter Burkert renewed an old debate about the debt that Greek civilization owed to the older cultures of Middle East with The Orientalizing Revolution: Near Eastern Influence on Greek Culture in the Early Archaic Age. And of course, no important topic would be complete without a major argument over a completely unexpected interpretation: that would be Black Athena: The Afroasiatic Roots of Classical Civilization, by Martin Bernal. And there remains the “difficult question” of whether or not there was money in China, and, if so, whether knowledge of it made its way to the West.

Yet the story of the “Greek miracle,” as it has come down to us through the ages, like the story of the much more recent Industrial Revolution,” seems likely to withstand the efforts of revisionists to smooth it away. Seaford’s aim is to unpack it. And the chapters on the emergence of coinage, most likely from spits used to roast sacrificed animals (which were portable, countable, durable, largely standardized and widely used) make fascinating reading.

Once the basic technological problems were solved, the use of coins spread rapidly. The whys and wherefores of how this happened are intricate and imperfectly understood. But the key to the transition from the use of relatively few coins made of the naturally-occurring but highly-variable gold/silver alloy of electrum to large numbers of coins of refined metal seems to have been the discovery stamped by governments to guarantee their value. Virtually always minted by the state, the new coins were counted, not weighed.

What’s really interesting is what happened next, as the Greeks began to grapple with the system they had invented. Money was homogeneous and impersonal, they discovered, abstract and concrete, an end in itself and a means to universal aims, different from everything else. The most unsettling thing about it was the recognition that its possessor could buy his way out of all other (pre-monetary) forms of social relationship, at least in principle: violence, reciprocity, redistribution, kinship, ritual, and so on. No wonder some people would do anything for money!

The recognition that money could dissolve these bonds worried the Greeks. “Hence the focus of much Athenian tragedy on the extreme isolation of the individual – from the gods and even (through killing) from his closest kin,” writes Seaford. “I know of no precedent for this in literature, certainly not in the pre-monetary society depicted in Homer.” The figure of the tyrant preoccupied Athenian society, he writes: absorbed by money as the means to power, violating the sacred and murdering his kin, never more memorably than in the dénouement of the Oedipus saga in Aeschylus’ Seven Against Thebes, in which the king’s sons kill each other battling over their inheritance. The words “hero” barely appears in Athenian tragedy, but “tyrant” (turranos) occurs more than 170 times.

The most peculiar novelty of money, Seaford says, was that it was unlimited. As a case in point, he cites Aristophanes’ last play, Wealth, almost certainly the earliest surviving text on economics. The whole play revolves the leveling powers of money, but Seaford describes the key exchange: “whereas one can have enough sex, or loaves or music, or honor, cakes or manliness and so on – money is different: if somebody obtains thirteen talents (a lot of money), he is eager for sixteen, and if he obtains sixteen he swears that life is unbearable unless he obtains forty.”

Hence the impact of the invention of money on pre-Socratic philosophy. The usual accounts of the emergence of philosophy and science that began in the sixth century B.C. center on politics, and the new-found conviction that that citizens in Greek city-states ought to be ruled, not by monarchy, but by impersonal law before which all were equal. That is part of the story of an intricate and mysterious change, Seaford acknowledges. But the appearance of a strange new technology facilitating the universal exchange of one thing for another – that is, money – may have supplied an even more fundamental metaphor to guide the philosophical cosmology. And in a series of highly-technical chapters on Anaximander and Xenophanes, Heraclitus and Parmenides, Pythagorus, Philolaus and Protagoras, he seeks to show how the early experience with the world’s first cash economy led to the “privileging of limit over the unlimited” that is so familiar a feature of the metaphysical and ethical writing of Plato and Aristotle.

A matter for specialists, clearly. Those ancient preoccupations with order seem so strange to us today – Aristotle’s conviction that the use of money to make money is wrong, Plato’s obsession with civil order, down to his war on music. But then we have only recently performed a massive deregulation of our own. Seaford describes the elimination round that began in the 1970s:

limits on the movement of capital (once controlled by nation-states); limits articulating cultural space, with the result that a Holiday Inn in Minneapolis is now exactly the same as a Holiday Inn in Mombasa (money homogenizes); limits on the salaries-cum-bonuses that money-controllers pay themselves; limits on the gap between rich and poor (an unlimitedness that makes common purpose impossible). It has also destroyed the limitation of speculative price by any internal relation to its financial or artistic product (investing in junk bonds is essentially the same as investing in junk art, and done by some of the same people.)

We have become blasé. Social science has replaced metaphysics. Instead of Aristophanes we have David Mamet, who gave a wonderful line to Danny DeVito when he played a crooked fence in the film Heist – “Of course you need money. Everybody needs money. That’s why they call it money – in which the very sound of the word has become its meaning. Yet many of us, perhaps most of us, haven’t given up thinking about how some degree of limitation might be re-imposed on what Seaford calls “our hyper-monetized, atomized and self-destructive culture of the unlimited.”

Seaford has one set of ideas about what needs be done. He is especially worried about global warming. (As usual, the Greeks had a myth for it, in this case the story of Erysichthon who cut down a sacred wood to make himself a banquet hall, a profoundly bad idea whose consequences are spelled out briefly in Seaford’s TLS piece.) I am, at least at the moment, more intrigued by another set of concerns.

The chairman of Great Britain’s Financial Services Authority, Lord Adair Turner, last week raised the possibility of levying a tiny tax on financial transactions. I am not sure that this should be thought of as “sand in the wheels” of markets, as did the late James Tobin, of Yale University, when in 1972 he proposed the measure that immediately became known as the “Tobin tax.” But, for all the reasons advanced by former banker Avinash Persaud in the Financial Times last week, I think it is almost certainly a good idea.

It seems like a step in the right direction, away from of what, reflected in the distant mirror of the early Greek world, Richard Seaford sees as “the oddness, the historical contingency of the lethally limiting limitlessness” of our times, a step towards a new world in which binding limits are arrived at democratically.

In any event, it is time to read the Odyssey again – next summer.

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