Cambridge Univ. Press, Cambridge, U. K., 2010, 237 pgs., Index,
References, Appendices, footnotes, maps, figures, tables
Reviewer Comment - This is an extremely important scholarly study of
'money' in ancient Greece and Rome, with some attention also to Egypt. For us
today the chapter 4 on Cash and Credit is the most important. In this the
author demolishes the typical presumption that money equals currency. The money
supply has always included exchangeable (transferable) credit. And Dr. von
Reden also shows that payments in kind do not mean barter. Her introduction
also contains important corrections to current opinion about money. Money in
its various forms (and she shows that it has many forms) is the key tool that
enables convenient exchange of goods. So her descriptions of the forms and uses
of money naturally includes much of interest about economic activity in
different social -cultural conditions. Since the title indicates focus on
Classical Antiquity it is likely that students of economics today will overlook
it, thinking it is only a scholarly description of some ancient era. But this
is exactly the era in which currency was invented in the West and its use
expanded. It is also the time in which philosophers such as Aristotle and Plato
were already commenting on the effect currency was having on society and its
ethics. It should be in the required reading list of everyone interested in
Introduction - There is so much critical information packed already
into the introduction that it really cannot be summarized. Here are a few
selected examples. "Money is more easily lost than gained; it requires a
host of laws, regulations and controls to work and have value; in the form of
coinage it costs something to be produced; and- above all - it makes people
dependent on anonymous authorities such as governments, federal institutions
and central banks." "Money destabilizes wealth and social
relationships, and transforms tangible, useful property into mere options for
the future." The author understands that credit=debt is a component of the
total money supply and, indeed, was the basis of money prior to the development
of coinage, yet in the text she jumps back and forth between using the word
'money' to mean coinage (currency) or to mean all money in general. She uses
the term 'monetization' to refer to the expansion of use of coinage, but also,
sometimes, uses the term in a more general sense to mean a developing process
of using 'money' as the basis for establishing 'value.'
She notes that Aristotle, living practically at the time of origin of coinage,
nevertheless had an 'imagined' concept of how economic exchange was transacted
prior to this origin. She refers to J. S. Mill's concept of 'money' and its
origin, in which he considered 'money' to be synonymous with currency. She
poses several very interesting questions related to the impact on society of
the introduction of coinage - such as 'to whose benefit was it' - what were its
rules - "what political, social and cultural systems made certain forms of
money acceptable and other monetary systems collapse?" Here she is
recognizing that coinage (currency) was not the only form of money.
She then get to the root of the confusion. "Money, in contrast to coinage,
has never been deliberately invented (either by traders, citizens or states),
but comes into being as regular transactions are made by means of the same
medium. She gives examples. When many individuals use the same process for
conducting exchanges then that form is money. She then gives the standard basic
functions that in theory define money - but note her critical terms.
"Money can be defined by four basic, but interdependent, functions. It is
a means of exchange IF people make payments for goods and services; it
is a means of payment, IF people pay taxes, rents and penalties; it is
a store of value, IF people keep it in a treasure box, display it at
home, or put it in a bank account, and it is a unit of account, IF
people compare the value of different goods on the basis of that medium, or
account for debts, future payments, and so on. Note the big IF that I have
stressed. Money is money IF it performs ONE of these functions, not all of
them. In the following chapters Dr. von Reden gives examples of different types
of money performing different of these functions simultaneously. For instance,
coins are used as means of exchange, while grain is used as means of
payment, while weight in metal is used as unit of account, and
value is stored in yet other, tangible, assets. In this case the money
supply is composed of ALL of these things. And the exchange conducted by means
of coinage need not be limited to physical goods, - for instance coins are
exchanged for forgiveness of sin. Money can be exchanged for sex but not for
The author continues with yet more examples of the varieties of 'money',
including rather different concepts prevalent in China. She concludes from this
that, "The fact that certain questions arose in one rather than another
monetary culture shows that precious metal coinage, too, is not a natural
consequence of monetary evolution, but a specific historical development."
"There were other forms of money than coinage in antiquity." She
notes a result in the problem created by new coinage "a conceptual
challenge as the later (coinage) destabilized the value of money that so far
had been linked to what was assumed to have universal value.".
This brings up a different problem, not discussed, what is the meaning of
But she notes that monetary value then could be based on political decision
rather than universal or super-natural qualities."
"In antiquity, however, the concept of money was closely linked to
valuable objects. And so monetary value, too, was considered to be the price of
objects that were purchasable. Since both Aristotle and the Roman jurists were
well acquainted with price variation, monetary value was clearly perceived as a
SOCIAL rather than INTRINSIC factor of objects."
Well, they were far ahead of our modern economists (quants) who spend time and
money trying to model mathematically the "intrinsic' value of stocks and
things. There is no such thing as 'intrinsic' value since value is not an
attribute that can be ascribed to an object of service. Bravo for the Greeks
Dr. von Reden continues with much more important discussion of money with more
specifics. She writes: "Rather, different forms of economic and political
organization, conditions of transaction, monetary institutions and forms of law
suggested a narrower and at the same time broader notion of money than is
current today." "While functions and meanings of money are dependent
on a wide range of social and cultural conditions, it is most strongly
associated with markets and the economy." She continues by pointing out
that the 'economy' of classical societies was different from the 'economy' of
modern times. She then discusses the ideological and polemical content of
discussions about money today, and indicates how these current beliefs
translate back into pre-conceptions (unhistorical) about what money must have
been and done in ancient societies.
Dr. von Reden shifts the subject. "I shall argue throughout this book that
money was a dynamic that under changing political and social circumstances
increased the complexity of transactions and reduced costs ." She
continues with this concept applied to classical society. But one wishes today
that our economists applied the same kind of analysis.
Here is another significant concept. The collective property of the polis in
classical Greece, for example, was a category economically and legally distinct
from that of the private property of individual citizens and their
oikoi. In Rome, the emperor Augustus made a point of distinguishing his
own property from the imperial treasury, the fiscus, and the (republican)
public treasury." The concept is much different from economic theory
Chapter 1 - Monetization issues - Dr. von Reden shows that both
'monetization' and the concept of 'money' were more complex than is generally
understood by economists today. "But when we consider that valuable
objects and metal bullion, too, were tendered by custom or public approval, we
find that monetization was not a process involving solely the establishment of
coinage by governmental act." She discusses the continuing arguments about
the origins of 'money' and creation of coinage. She describes much interesting
historical evidence. She notes that in ancient Babylonia economic transactions
were accounted for in silver bullion (that means not coins but weights). They
were not barter. There were loans and of course debts with interest accounted
for in silver bullion. But after the invention of coinage that form for money
rapidly expanded although exchange continued to include transfer of 'valuable'
objects, but so long as these objects then could be given a 'value' in the
monetary units. Thus, lack of cash (coins) on hand was compensated for by
exchange of other things including credit=debt.
Chapter 2 - Monetization cases - In this chapter the author focuses on
specific known cases of the use of money. She begins with references to
Aristotle's views on the social impact of the introduction of coinage. She
believes he had no knowledge of the real historical antecedents of coinage or
the reasons for its invention. But he did accurately describe its function in
contemporary Athens. She turns to Naukratis, Samos and Egypt for more examples.
For Egypt, she notes: "Until the Greco-Macedonian conquest in 332 BC Egypt
had no regular coinage." "Pharonic Egypt, however, is a particularly
good example of a society that had money without using coinage. "Baskets
of grain, vessels of oil, weighed bronze and foreign silver in total fulfilled
most monetary functions. Over the long period of ancient Egyptian history some
were used as measures of value, others as stores of wealth, and all of them
were in particular contexts accepted as a means of payment." "Coinage
was introduced into Egypt by Alexander in 332 BC."
She describes the subsequent history of coinage and money into the Roman era.
Then she turns to a lengthy discussion of coinage and money in Rome. "The
most important conclusion to be drawn from the numismatic evidence is that
coinage was a subordinate phenomenon of monetization; for by any reasonable
calculation the amount of money earned and spent by the Roman state in the
first half of the third century BC was much greater than the small amount of
coinage and aes bars recknoned to have been produced could have covered."
Next, she turns to Celtic Gaul and Britain.
In conclusion she comments about the whole process of monetization; "There
was an increasing demand for money that was not always met by an adequate
supply of coinage. This led to a thriving culture of credit, and any increase
in the supply of coinage had a high chance of being absorbed into economies
insufficiently supplied with it."
Chapter 3 - Monetary networks - In this chapter Dr. von Reden describes
the rapid but fragmented expansion of coinage throughout the Mediterranean
region. An amazing number of mints were established, each producing coins of
weights based on the corresponding local weight systems. Then political power
led to the supremacy in use of the coins of a dominant city, such as Athens.
"Every precious metal monetary system is based on a principal unit of
weight (normally slightly lighter than the unit of metal weight itself). She
describes the process, noting that payment of military forces was a significant
cause for spread of various coins. With the political expansion of Roman power
the use of the silver denarius also spread. But even so, there were bronze
coins of small value minted locally for local use.
Chapter 4 - Cash and Credit - In this chapter we reach a topic of great
significance today - the role of credit in a monetary system. The author
reports on the records of very sizable loans and the role of major bankers.
"Not only had the ancient economy expanded over the 600 years between the
classical Greek and Roman imperial periods, but the financial resources that
supported such expansion had also grown. In this chapter we will investigate
the changing financial capacity of the ancient monetary economy, looking in
particular at credit and other strategies that were adopted to increase the
There you have it. In ancient Rome credit was used to expand the size of the
money supply just as it is today. Of course for years establishment economists
have refused to believe this, because it disrupts their conceptions of the role
of credit created by governments and instead they conjure up the notion of
'velocity' of money.
But Dr. von Reden has the facts. "The orthodoxy has now been challenged.
In contrast to earlier arguments, scholars have brought together many
indications that the circulation of money was not just based on coinage."
"There were, first of all, forms of cash-less payments, ranging from a
simple setting off of obligations against each other to the use of written debt
claims that could be transferred to third parties. There was, furthermore, a
flourishing credit economy that made payments possible when cash was not in
hand. The importance of credit for cash exchange had already been emphasized by
Friedrich Pringsheim, ..." "But credit was not just a legal tool to
overcome the complications of cash exchange but a ubiquitous practice that
could increase the money supply, if there were proper procedures to recover
loans. In fact the law of debt was among the most advanced in ancient private
law, and the great range of formal and informal credit institutions that
developed in classical antiquity, suggest that the ancient monetary economy was
highly dependent on credit."
"Once a cash economy was fully established in classical Athens, money was
among the most important things lent and borrowed."
The chapter continues with an extensive description of the role of banks and
banking. And all of this should be studied today by those who claim knowledge
of banking, money, and economics in general.
In conclusion the author writes: "A deeply rooted culture of credit, by
which the social imperative of helping one's friends, neighbors and
fellow-citizens was transmitted, formed the background of an extensive monetary
credit economy throughout classical antiquity. Already before money developed
into coinage, there was some notion of shared responsibility for the economic
status of individuals as members of a community, while the resolution of debt
crises and settlement of interpersonal disputes remained a political issue from
the archaic Greek to the Roman imperial period."
Chapter 5 - Prices and price formation; issues - Dr. von Reden proposes
many of the usual questions being asked today about the role of money and the
causes and effects of changes in money in relation to the concepts of the
supply and demand curves. First, she describes the actual amount of primary
source information available and indicates that it is rather spotty. She
summarizes some of the standard current theories including the famous 'quantity
theory of money' and 'velocity' of circulation. In conclusion she believes the
amount of information is not adequate to support a full explanation for such
issues is trhe cause of inflation or its lack.
Chapter 6 - Prices and price formations: a case study - To support her
opinion in the previous chapter she uses the case of Egypt, an economy she has
studied in detail. For this she has the prices of grain for some years between
275 and 80 B.C. She describes the nature of the data and its limitations very
clearly. She constructs graphs and tables of prices over time and in locations.
She compares data on price of grain with worker wages. The result is that not
much can be definitively established.
Chapter 7 - Sacred finance - This is a special topic. The role of
temples in ancient society, in the economy, and hence in the use of money was
very significant. Dr. von Reden notes that the subject has not been much
studied since WWII. She describes the role of the temples, of religious cults,
of public worship and the importance of religious belief in classical
societies. She believes that monetization had important effects. "Other
illustrations of the interdependence of monetization and cult finance were the
transformations of dedications into monetary fees, or the transformation of
cult utensils into monetary means of payment." She also describes the role
of temples as sources of credit. Temples also charged fees and taxes that paid
for their services and upkeep. They charged rent on agricultural land from
their tenants. These were paid in cash or in grain.
Epilogue: monetary culture - Dr. von Reden opens with this: "In
this book I have concentrated on the economic consequences of money and coinage
in classical antiquity. But it is well known that money does not just affect
economies but is a collective signifier through which individuals and societies
construe their identities and lives."
Well, It may be 'well known' to the relative academic community, but I do not
think the general public has any such idea, although it should. She devotes
most of this discussion to comment on Aristotle's and Pliny's views of money
and its impact on Athenian or Roman culture..